San Diego City Council Final Budget Review Committee Hearing - May 21, 2015
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San Diego City Council Final Budget Review Committee Hearing - May 21, 2015
The San Diego City Council Final Budget Review Committee, chaired by Councilmember Todd Gloria, met on May 21, 2015, to review the Fiscal Year 2015 Year-End Budget Monitoring Report and the Mayor's Fiscal Year 2016 Proposed May Revise. The meeting was informational, with final decisions scheduled for June 8, 2015. The committee heard public testimony, received presentations from the Financial Management Department, and discussed key budget priorities, including a proposed pension stabilization reserve, infrastructure funding, and the restoration of a film office.
Public Comments & Testimony
- Non-Agenda Public Comment (Chargers Stadium): David London, representing the Balboa Park Heritage Association, opposed the stadium proposal, citing present value miscalculations, unpaid Qualcomm debt, and maintenance costs. Andrew Dyer argued the public contribution is closer to $1 billion, criticized the lack of a public vote, and called the plan "corporate welfare." Martha Welch made tangential remarks about sewer and water issues.
- Item 2 – FY2016 May Revise: Multiple speakers supported the re-establishment of a San Diego Film Office, including Alex Schiller (San Diego Film Consortium), Francine Filzinger (San Diego Filmmakers), Ed Batterack, Mark Allen, Carl Backus (San Diego Film Commission Foundation), Nancy Washburn, Sidney Franklin, Steve Froelich, Larry Poole, Jody Silly, Carlos Cota, Larry Baza (Commission for Arts and Culture), Welton Jones, and Jim Morrison. They emphasized the economic impact of film production, urging full funding rather than a study. Betty Peabody thanked the council for Balboa Park investments.
Discussion Items
- FY2015 Year-End Budget Monitoring Report: Tracy McCraner, Vanessa Montenegro, and Matt Vespey of Financial Management presented the report. The general fund is projected to end the year with a $14.4 million budgetary surplus ($6 million in additional revenues, $8.4 million in expenditure savings). Projected excess equity stands at $20.8 million, up $9.5 million from mid-year. Key drivers: increased SDG&E franchise fees, TOT (6% growth rate), and sales tax, partially offset by underperformance in property tax. Expenditure savings come from vacancies in public safety and water conservation. The report also noted a $1.9 million deficit in the Engineering and Capital Projects Fund and a $2.3 million deficit in water utilities.
- FY2016 May Revise Presentation: Chief Financial Officer Mary Lewis, Julio Conizal, and Tracy McCraner presented the revise. The general fund budget is $1.3 billion, with a net increase of $28.9 million in appropriations. Funding sources include $5.8 million in major revenue growth (property tax revised to 5%, TOT to 6%) and $0.9 million in user fees, plus $21.8 million in projected excess equity allocated to the public liability reserve (target 47% by 2018) and $15 million to establish a new pension payment stabilization reserve trust. The revise adds 525 positions citywide, $42.8 million in new infrastructure spending, and $7.9 million in ongoing resources for expanded rec center hours, library materials, personnel, and a film office study. The five-year outlook shows a $41.2 million surplus in FY2017, down from $48.1 million due to increased staffing and police union costs.
- IBA Comments: Independent Budget Analyst Andrea Tevlin raised concerns about the proposed $15 million pension stabilization reserve trust, noting it is a major policy decision without prior council discussion or established parameters. She suggested referring the matter to the Budget and Government Efficiency Committee for vetting outside the budget process.
- Councilmember Discussion:
- Council President Sherri Lightner: Thanked staff, noted positive additions (library materials, rec center hours, open data), but expressed concern about the tight timeline (36 hours between May Revise release and hearing) and the pension reserve being included without council policy discussion. Requested a future committee hearing on the pension stabilization policy.
- Councilmember Lorie Zapf: Praised the budget but reiterated concerns about the pension reserve and lack of infrastructure focus.
- Councilmember Myrtle Cole: Supported extended rec center hours and library materials, but echoed concerns about the pension reserve, advocating instead for an infrastructure stabilization reserve. Stressed need for more community policing officers and faster hiring.
- Councilmember David Alvarez: Questioned the film office allocation ($125,000 for a study vs. action), noted TOT increases not flowing to the arts, and asked for details on park/library facility improvements. Expressed concern about the timeline and lack of briefings.
- Councilmember Scott Sherman: Supported the pension reserve as a hedge against market downturns and the IT auditor position. Asked about the sunset of drought enforcement officers.
- Councilmember Chris Cate: Supported the film office and the pension reserve concept, noting the need to save for potential pension offset bills. Asked about the list of facility improvements.
- Chair Todd Gloria: Praised the budget as a recovery achievement, but stressed infrastructure as the city's biggest challenge. Questioned the recommendation to lockbox pension funds rather than address urgent needs. Supported the film office and urged a clear funding plan. Noted the need to fully fund PERF report recommendations for police.
Key Outcomes
- No votes taken – the meeting was informational.
- Next steps: Councilmembers' final budget modification priority memos are due May 22, 2015, to the Independent Budget Analyst (IBA). The IBA will issue its final report on June 3, 2015. The City Council will make final decisions on June 8, 2015.
- Referral: The pension stabilization reserve trust discussion will be docketed for a future meeting of the Budget and Government Efficiency Committee (requested by President Lightner and supported by Chair Gloria).
- Film Office: The Mayor's office clarified that the proposed budget includes one full-time position and $125,000 in seed money for a film office, with potential county and private matching. Councilmembers expressed interest in increasing the appropriation; further discussions will occur in budget memos.
- Substandard Housing: A tentative agreement was reached to add one deputy city attorney position for substandard housing enforcement, funded short-term.
- Balboa Park/Mission Bay Program Manager: Chair Gloria noted the position should also cover coastal parks, but operational details will be determined by staff.
Meeting Transcript
All right, good morning, ladies and gentlemen. I will call the final budget review committee hearing of the San Diego City Council to order. I want to get started right away because we have uh obviously a lot of folks here are here. We have a number of public speakers on each of the items. Uh so we will dive right in if we can. I want to just uh load for the record uh that uh Councilmembers Cole, Sherman, Kate, and myself are present along with Council President Leitner. I see Mr. Kirsey walking in. I think that's Mr. Alvarez. I'll put on my glasses, I can tell you for sure. Um and uh so we'll get started right away. I do want to uh start by thanking uh my council colleagues, the IBA, the mayor's office, and of course the public for all of your contributions uh in the budget development process to date. As a reminder, today we are reviewing the fiscal year 2015 year end budget monitoring report and the fiscal year 2016 proposed may be revise. Both of these reports will come back to the City Council for any final modifications and review on possible approval on June 8th. Today we are just taking uh informational items. So this is just to put it out in the public. Uh reminder to my colleagues and again also to the public uh that uh we have a couple more dates remaining uh in our budget process. Your final budget modification priority memos are due to our independent budget analyst this Friday, May 22nd. So that's for the council members. The IBA will then uh issue their final report on Wednesday, June 3rd, and as noted, we'll make our final decision uh on our current schedule uh on Monday, June 8th. Uh so with those uh ground rules, uh I will take the non-agenda public comment. I want to warn you that on item number two, we have enough speakers now that we're we're gonna be reducing time, so not everyone will have three minutes, so start start adjusting. I think if we're at where we're at now, two is probably good. If we get a bunch more, we'll probably take down to one. So you know, tell your neighbor not to necessarily submit a slip if you have more than two minutes of comments. We'll work with you. Uh so jumping with non-agenda public comment, we'll start with David London, followed by Martha Welch and then Andrew Dyer. Uh if each of you can come forward and be ready behind the podium, I would appreciate it. And uh non-agenda public comment, so it's two minutes each. Mr. London, floor is yours. Uh good morning, Mr. Chairman, members of the committee. Um I'm here to talk about uh an item that will affect your budget process potentially for the next 20 years. Uh the Charger Stadium proposal put forward now by the mayor. Uh quite simply, it's monk. It's a work of fiction, it's silly. Um you shouldn't waste any more time or money or nervous energy on it. It's probably dead on arrival, and hopefully the chargers will tell you that in a week or two. But I wanted to quickly address some specific issues that the press has not mentioned at all for some strange reason. The local cheerleaders tend to ignore reality. Um they talk about income streams of ten million dollars a year for 20 years, and they say that gives us 200 million dollars. Well, it doesn't. If you calculate the present value of that income stream and the net after doing a bond issue, it's a whole lot less than 200 million dollars. Nobody talks about that. They never even mention the words present value. They need to. There's no mention of the $57 million in existing debt still unpaid for Qualcomm. Who's gonna pay for that?
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