DeMaio releases financial recovery plan for San Diego

By Joe Britton

City News Service

Councilman Carl DeMaio on Friday released a financial recovery plan for the city he claimed would save San Diego $1 billion over the next five years and overcome a projected $72 million budget shortfall in the coming fiscal year without major service reductions.

The plan relies on significant pension cuts, eliminating retiree health care for current city employees, a 2 percent pay reduction for non-public safety workers and a salary freeze.

It calls for selling the Miramar Landfill and putting 11 services out to bid under the managed competition program, which allows private companies to compete for jobs now performed city workers.

DeMaio’s plan calls for cuts to arts and culture programs, streamlining management and trimming the budgets for the mayor and City Council by 10 percent.

“Make no mistake about it, fixing the city’s financial problems will require several tough, but necessary adjustments in how the city operates, in how the city compensates employees and how our elected leaders interact with each other,” DeMaio said at a morning news conference to outline his 80-page plan.

Mayor Jerry Sanders, who met with DeMaio on the plan this morning, said he welcomes “all good ideas” to help the city address its budget challenges.

“Some of the suggestions presented today are interesting and should be examined,” Sanders said. “To that end, I will forward them to the Citizens’ Fiscal Sustainability Task Force and ask that they be looked at to determine their practicality, legality and effectiveness in tackling our financial challenges.”

If implemented, DeMaio said his plan would achieve $87.3 million in savings in the fiscal year that begins July 1. It would eliminate the budget deficit and provide $3 million to restore “browned out” fire engines, he said.

DeMaio’s plan was released only days after San Diego voters overwhelmingly rejected Proposition D, which would have raised the city’s sales tax by a half-cent.

He said voters were offered a “false choice” of having to make drastic cuts to municipal services or approving a new tax.

To help close the anticipated spending shortfall, city departments have proposed laying off firefighters, instituting more “brownouts” of fire engine companies, the loss of 169 sworn police officers, closing libraries or trimming hours of operation, shuttering recreation centers and pools and less park maintenance.

One of the benchmarks of DeMaio’s plan is changing the “pensionable pay” for city employees by eliminating added salary for employees who earn certain degrees or certifications, such as what is given to firefighters who hold an emergency medical technician certification.

To sweeten the deal for city employees, DeMaio has proposed a profit-sharing program. His plan envisions that a portion of any surplus would go into a pool that would be used to give employees a 4-6 percent pay increase.

DeMaio also proposed three ballot measures to cap spending and labor costs for five years, mandate pension reform and create a “lock box” for surplus revenues.

Many of the proposals outlined in DeMaio’s plan require negotiation with the city’s labor unions.

If the unions are unwilling to accept the changes, DeMaio urged the City Council to impose them. That, however, is uncertain as a majority on the City Council are backed by labor.