“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”—Ogden NashSan Diego City Councilmember-elect Carl DeMaio may piss off a lot of people—particularly his lame-duck counterparts—but don't suggest that he can't be funny.
While discussing the looming city budget deficit that soon will be smacking the city in the schnozz, DeMaio announced deadpan that he had fired off one of his prolific memos to the Federal Reserve, a major player in the planned $700 billion bailout of the country's woebegone financial market.
“Dear Sirs,” he opened. “It has come to my attention that you are in the market for financially beleaguered institutions. Allow me to introduce you to the San Diego City Employees Retirement System, which is $2 billion in the hole and counting.
“We are hopeful,” he continued, “that our past sins have been corrected, but we need an immediate infusion of $2 billion cash to make our system whole and to provide for the pension benefits of 11,500 individuals. Here's our bank number and routing number. On second thought, we'd prefer a cashier's check alone, please, because we understand that perhaps you may not have much money for very long.”
You really sent this? Spin Cycle bit.
“Nooo,” DeMaio said, “but I think it's basically very similar to what the hell is going on. I think we should just print money.”
Love him (as Donna Frye does) or hate him (he thinks Toni Atkins falls in that category), DeMaio seems ready to bring a new dimension of—what should we call it?—taunting certitude to the revamped City Council come December.
And what he's certain of at this juncture is that San Diego's about to discover that the Sacramento Stooges have given a two-fingered poke in the eye to every city in budget-strained California. In case you've been living in a super-collider tunnel in recent months, the state government just approved a budget that relies heavily on legerdemain and hocus-pocus, twine and chewing gum. Yes, it took Gov. Terminator and the state Legislature 85 days to do so, but we have a financial road map for the coming year. Problem is, this map comes complete with cigarette burns in crucial places and those irritating folds that eviscerate important intersections and turnoffs.
In other words, it stinks.
Tucked in amongst all the budgetary sleight of hand lurks one big turd ball for San Diego: The California Redevelopment Association estimates that the state government, in order to patch together its budget, will withhold nearly $12 million in redevelopment funds that won't be returning to San Diego's financial bottom line. Cities throughout California will be losing redevelopment dough—to the tune of a whopping $350 million. The League of California Cities said in a strongly worded statement that the maneuver “effectively steals $350 million of local redevelopment funds that are so essential to the vital community infrastructure investments that generate both high-paying construction jobs and substantial state and local revenue.”
Couple the local $12 million hit with anticipated drops in hotel-, property- and sales-tax revenues, and DeMaio pins the coming mid-year city budget deficit at roughly $15 million. His figure doesn't reach the Henny Penny level of $25 million predicted by Union-Tribune editorial writers because he's convinced Mayor Jerry Sanders “has been trying to be aggressive” in shaving mid-year expenditures.
“Which means that we'll hopefully have $7 million to $10 million less spending in the budget than we thought,” DeMaio said, adding that Sanders will likely be forced to admit, “Oh, and by the way, we still have a $15 million deficit.”
In a memo he and City Councilmember Kevin Faulconer issued late last month, the duo urged the mayor and City Council to come up with a “spending reduction plan” in anticipation of cuts to balance the budget, DeMaio conceding that at mid-year, “there's very little that you can actually do.” (The city operates on a fiscal-year calendar, meaning mid-year comes Jan. 1.)
The Mayor's office has agreed to assess “how far off we are, particularly in light of the state budget being resolved,” DeMaio said, but he added that some council offices weren't so pleased with his memo. “The departing council members were downright chilly about the prospect that they would have to confront a deficit and make decisions on spending reductions.”
One hint of that hesitation? An exchange Spin Cycle had this week with DeMaio and Atkins. Considering the current dismal economic climate, DeMaio wondered why the city is operating in “business as usual” mode when it comes to reporting the city's expected revenue drops to the council's Budget and Finance Committee, now scheduled for mid-November rather than, say, this week's committee meeting.
“You see how this keeps getting pushed back?” DeMaio snorted. “So, it's unlikely that anything is going to hit this council in terms of a package to rein in spending to get us to where we need to be.”
In a statement, Atkins said, “It is my request that we get a complete update along with the budget recommendations from the Mayor. That is what I've docketed. … I expect a full discussion.”
But DeMaio noted that the committee agenda for the Sept. 24 meeting seems to indicate that last year's revenues will be the topic du jour. “I hope they talk about this year's revenues,” he said. “We need to know.”
In response, an Atkins spokesperson confirmed that discussion is set for Nov. 12—post election—but put the onus on the Mayor's office for the delay. Snapped DeMaio, “Why wait? We know the economy is tanking. This seems like business as usual.”
Mayoral spokesman Darren Pudgil did not respond to repeated requests for comment on the city's pending budget deficit nor on rumors that the mayor has imposed a hiring freeze post-DeMaio / Faulconer memo—save, apparently, for the recent acquisition of former U-T columnist Gerry Braun as the mayor's new $140,000-a-year director of special projects, whatever that will entail.
So, where are spending cuts likely to occur? DeMaio, not a seated council member until December, said teasingly, “I've got my laundry list of items.”
First on the list, he said, is getting the investigation-rattled Centre City Development Corp. to pony up the Full Monty on the Petco Park bonds rather than the current 50/50 split. “I would very much to go to CCDC automatically and say, ‘Alright, you guys picked up half the ballpark bonds. Now you have to do 100 percent this year.' That's $7 million extra in our pocket,” DeMaio explained.
But that's chump change compared with what state “leaders” have in store for next year. Because part of the chewing gum holding together this year's state budget is revenues anticipated from next year, DeMaio sees even bigger deficits ahead.
“Next year's budget is going to be a bloodbath,” he said.
Oh yeah, right up DeMaio's alley. Got a tip? Spill it like blood to johnl@sdcity beat.com.