Mayor Reveals Patchwork Plan to Balance the Budget

Mayor Maureen O’Connor, during an unusual City Council workshop session Thursday, outlined a series of fee increases, new fees and one-time payments that, if adopted by the full council, would balance the city’s estimated $40-million budget shortage.

O’Connor’s proposed $40-million revenue package was pieced together with help from Councilwoman Linda Bernhardt, the only other council member still remaining in council chambers at the end of Thursday’s lengthy budget workshop.

“This (package) shows that you can balance the budget” without increasing taxes that have not been previously approved by the voters, O’Connor said after Thursday’s lengthy meeting.

It was unclear Thursday night, however, if a majority of council members would accept the makeshift revenue package that is designed to balance the city’s $460-million general fund budget.

The mayor’s proposed new revenue sources included several items that seem likely to win support when the council discusses new revenue during next Thursday’s budget session. Council members have indicated that they hope to have a balanced budget in place by the end of that meeting.

O’Connor’s suggested revenue package includes an estimated $6 million generated by increasing the business license fee. O’Connor also directed City Hall staff members to find an additional $6 million through a series of increases that would affect an unspecified number of existing city fees.

O’Connor also is counting upon $3 million from a previously untapped water and sewer department fund that city officials now believe can be used to pay litigation costs generated by the city’s continuing attempt to halt San Diego Gas & Electric’s proposed merger with Southern California Edison.

But the proposed revenue package also includes at least one highly speculative item, a $13-million payment from the San Diego Unified Port District. Although the Port District has agreed to pay the city for police and maintenance services provided on port property, commissioners won’t determine the payment total until Tuesday.

The rest of O’Connor’s proposed revenue package would come from a variety of sources, including increased planning department fees, a delay in capital improvement projects at Balboa Park and a reduction in revenue used to fund special promotions,

Some of O’Connor’s proposed revenue increases mirrored recommendations made earlier in the day by two private-sector groups.

For example, the Greater San Diego Chamber of Commerce and the San Diego County Taxpayers Assn. recommended that the council increase license fees paid by businesses.

However, unlike O’Connor, the two groups recommended that the city reconsider a $20-million property tax increase that would be used to fund the employee retirement fund.

The council approved the $20-million property tax in January by a 5-4 majority, but members subsequently reversed field and dropped consideration of increasing property taxes by $44 per $100,000 of assessed valuation--or $66 for an average $150,000 home.

The council has the power to approve the additional property tax without a vote by the public, but O’Connor and other council members have remained steadfast against raising property taxes without placing the issue on the ballot.

Using property tax revenue for the employee retirement fund obligation would free up $20 million in the $456-million general fund, which pays for many basic municipal services, including public safety, recreation and the libraries.

Increasing the business license fees “is prudent and appropriate,” chamber President Lee Grissom said during council’s Thursday budget workshop session.

Council members generally agree that a business license fee increase would occur. Still undecided, however, is how big that increase will be. However, O’Connor on Thursday suggested that the council might consider increasing the licenses that now cost $30 to as much as $125.

The council hopes to use the increased business license fee revenue to pay for increased costs of a number of City Hall operations, including the treasurer’s office and the auditor.

Although the chamber and the taxpayer’s group recommended several revenue increases, they also are urging council to cut to cut at least $10 million from existing programs. The taxpayer association also has suggested that the council drop the proposed $13-million housing trust fund, which is designed to make housing available to lower-income residents, according to taxpayer’s association executive director Jim Ryan.