Port District to Rescue S.D. Budget : Government: Labor unions join bailout by agreeing to pay cuts so jobs can be saved. Port District takes over some city obligations.

Through a patchwork of emergency funding from the Port District and voluntary salary trims by city employees, the city on Tuesday avoided massive layoffs scheduled to go into effect Nov. 1.

Based on a $5.7-million emergency allocation from the San Diego Unified Port District and at least $3.6 million in salary cuts, the City Council approved a partial city budget, and gave assurances that no employees would be dropped from the payroll.

The layoffs proposed by the city manager’s office in September were in response to a $12-million loss in revenue from the state budget and a predicted $6-million shortfall in city revenue because of the sluggish economy.

Originally, a report by City Manager Jack McGrory called for 231 positions to be slashed, affecting 178 employees and 51 unfilled positions. Last Wednesday, notices of termination were sent to 90 city employees, pending the outcome of Tuesday’s negotiations with the Port District. Further notices had been expected.

Many of the original 231 targeted positions that were not filled and have already been eliminated by department heads as expenditures have been trimmed, McGrory said. Positions vacated during the past year have not been filled, and in a few cases, such as the city attorney’s office, employees were terminated after the manager’s budget report in September.

By approving shifts in general fund allocations, the City Council was able to avoid some cuts in programs and services.

A proposed 15% cut in city funding for arts programs will be reduced to 7.5%. The manager’s office will seek to make up the difference through a special promotional programs fund.

The council voted to maintain playground staffing and after-school recreational programs costing $338,000. The council also approved saving a $20,000 program to make streets accessible to the handicapped, and an $85,000 Crime Victims’ Assistance Program. The victims’ assistance will be paid from assets forfeited by criminals, McGrory said.

Funding for dozens of programs is still undecided. The council instructed McGrory to consider making fewer cuts in light of the newfound port money, and to report back to the council in two weeks.

Also on Tuesday, the largest labor union representing city employees announced that its members had approved a voluntary five-day, unpaid work furlough, a move that would reduce city salary payments next year by $1.5 million.

Over the weekend, the city firefighters’ union also voted to accept a 5% salary decrease that will save $1.1 million. The Police Officers Assn. voted in August to accept a 1% salary cut, saving an additional $1 million.

The city positions spared Tuesday include:

* 26 firefighters.

* 18 police community service officers.

* 8 branch librarians and staff members.

* 7 lifeguards.

* 16 Planning Department staff members.

* 3 positions in the city clerk’s office.

The remaining employees who were given notice will be handled through “lateral transfers” and demotions, some with slight salary decreases, McGrory said.

City Atty. John Witt said Tuesday that seven deputy city attorneys were terminated and an additional six positions are scheduled to be cut. The remaining attorneys have agreed to a 10-day unpaid work furlough, and to assume Bar Assn. dues that were covered in the past by the city.

The council instructed the city attorney’s office and other city department heads whose staff numbers are still in question to meet with McGrory over the next two weeks, to negotiate cuts.

The Port District funding was approved at the commissioners’ meeting Tuesday afternoon after McGrory and Mayor Maureen O’Connor presented a 10-point proposal for “a one-time, last-ditch, emergency” agreement between the city and the district to transfer financial obligation for four properties and programs in the San Diego Bay tidelands area, which is served by the port.

At the meeting, O’Connor, at turns, implored the Board of Port Commissioners for their support, then threatened to oust a commissioner appointed to represent San Diego.

Several commissioners, including San Diego appointee Dan Larsen, raised concern over the legality of the port temporarily assuming the city’s financial burden.

O’Connor lashed out: “I’m going to go back to the council, Mr. Larsen, and have you removed.”

Larsen’s response: “I don’t think threats are appropriate at this meeting, Mayor.”

Larsen, whose term expires in January and who said he has no intention of seeking reappointment, voted to support all four proposals passed by the commissioners.

The port will assume $4.5 million in maintenance and operating costs at the Convention Center, which is owned by the district.

It will also assume $1.06 million, or 15%, of the $7 million the city pays to fund the Convention & Visitors Bureau. The 15% figure was derived through the number of hotel rooms within the district’s tideland area, which benefit from the promotional work done by the bureau. The port agreed to assume the $111,000 operating cost of the San Diego Maritime Museum and the Sportfishing Council.