SAN FRANCISCO — The San Diego City Council closed a projected $179 million budget deficit with layoffs of city employees and other measures.
Mayor Jerry Sanders proposed the actions last month to address the entire budget deficit for the remainder of fiscal 2009-10 and all of 2010-11, rather than waiting for the usual budget cycle to begin in the spring.
“By making this decision now and putting this plan into effect Jan. 1, we begin to address the structural budget problem six months early, and by making these decisions now, you won’t have to cut an additional $24 million from city services in June,” Sanders told the City Council in testimony Wednesday.
San Diego, which suffered a municipal bond disclosure scandal related to underfunding its pensions earlier in the decade, has taken especially aggressive action to cut its budget and, unlike most big California cities, has so far refused to spend its rainy-day fund to preserve services.
The budget plan includes $82.6 million of ongoing structural budget cuts, according to Sanders’ office. Those cuts are primarily the result of cutting 530 positions. About 200 of the positions are currently filled, meaning layoffs for city workers. The others are empty positions that managers will not be allowed to fill.
The proposal includes $96.5 million of one-time savings and adjustments, Sanders said. The temporary savings include suspension of contributions to the city’s reserve fund in 2011, securitizing a $39 million lawsuit settlement, and delaying installation of fire sprinklers at the city administration building.
The city currently has reserves of about 7% of the $1.1 billion general fund and plans to resume payments to the reserve fund after the recession.
Sanders, a Republican, said he had five goals in balancing the budget: avoiding police officer or firefighter layoffs, maintaining current reserve balances, continuing to make full pension payments, avoiding a decimation of city services, and spreading cuts equitably.
But the plan does eat into services.
“There will be service impacts in every community,” the mayor told the council.
Among other things, the budget reduces the number of police canine units, eliminates an equestrian unit, reduces library hours, and eliminates Sunday hours at neighborhood branches. It halts maintenance on 91 medians across the city and reduces lifeguard coverage at the city’s beaches.
The City Council approved the cuts by a 7-to-1 vote, passing the vast majority of the mayor’s proposed cuts and fund transfers with just a few small tweaks. The sole dissenter wanted deeper permanent spending reductions.
“The concerns I have relate to the structural reforms that the city must engage in to really fix our financial problems,” said Councilman Carl DeMaio, who was the lone hold-out against the budget-balancing measures. “More than half of our fixes are one-time fixes.”
He said the structural deficit for fiscal 2012 will approach $130 million, and that should be addressed now.
Sanders said closing the entire gap with permanent spending cuts would require cutting discretionary spending by more than 25%, the closure of 20 fire stations, the firing of hundreds of police officers and firefighters, and the shuttering of 11 libraries, among other cuts. He said that would decimate city services over a problem that is largely the result of cyclical economic forces.
“This is a recession-driven problem,” he said.