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Sanders releases proposed $2.85B city budget

By JOE BRITTON

City News Service

Mayor Jerry Sanders on Thursday released a $2.85 billion proposed budget for San Diego in the coming fiscal year that overcomes a $28.2 million shortfall without layoffs or cuts to city services.

Sanders described the spending plan, which would take effect July 1, as “uneventful.”

“The good news is we will be able to close this gap without cutting services to the public,” Sanders said. “Instead, the solutions we are proposing are more structural in nature.”

The general fund portion of the proposed budget, which pays for most city services such as police, fire, parks and libraries, is $1.1 billion, down $37 million from last year.

To overcome the deficit, the proposed budget relies on vehicle fleet savings, less spending on supplies and equipment, reduced retiree health care costs and the restructuring of a legal settlement related to the past underfunding of San Diego’s pension fund.

It is essentially a revision to an 18-month spending plan the City Council passed in December to address an earlier $179 million spending gap, which led to the elimination of about 500 city positions; rolling “brownouts” for fire engine companies; cuts to the Police Department’s civilian workforce; and reduced library hours.

The mayor’s office was forced to revise down the budget, this time to the tune of $28.2 million, due to the ongoing erosion of tax and other revenues coming into the city.

The fiscal news doesn’t appear much better a year from now.

Sanders said Monday he plans to release an updated five-year financial forecast for San Diego that pegs the city’s deficit for fiscal year 2012 at close to $75 million, while acknowledging “that figure will fluctuate as we get the final numbers in.”

Despite the persistent grim fiscal situation, Jay Goldstone, the city’s chief operating officer, said the decline in property, sales and hotel tax revenues appears to have “bottomed out.”

“We believe we have perhaps bottomed out from the economic downturn, but we are not projecting a rapid return to where we were back in 2008,” Goldstone said.

Sanders’ proposed fiscal year 2011 budget will be presented to the City Council on Wednesday.

“I think because the council and mayor got together early in December to make the tough decisions, we are here today in much better shape than had the city not acted last year,” Councilman Kevin Faulconer said.

Faulconer said the City Council will move in the coming weeks to close the latest budget gap.

Earlier Thursday, the Independent Budget Analyst’s Office released a survey of San Diego residents that found most thought the city was doing a good or fair job of delivering services. Only 10 percent of those who responded to the survey thought San Diego was doing a poor job of delivering services.

Respondents indicated that the condition of city streets was their top priority, followed by police and fire, efforts to address homelessness and the maintenance of parks.