Is There a Better Way to Handle the City Budget? : Crunch: Marathon City Hall juggling act to balance the San Diego budget leaves many disillusioned with the way the system works.

The San Diego City Council’s mad dash on Thursday night to balance the upcoming budget seemed to leave most council members and City Hall observers convinced that there has to be a better, or at least less painful, way to get the job done.

For many, the light at the end of the budgeting tunnel seems to be a long-range business plan that would place limits on the seemingly never-ending attempt to make scarce revenue keep pace with an ever-increasing list of proposed expenditures.

That juggling act reached what some observers described as new lows during the recently completed budget review that culminated in Thursday’s seven-hour meeting, when council members used tax and fee increases and service cuts to balance a $470-million general fund budget.

The just-completed process “raises concerns about the posturing early on on just how serious this budget crunch was,” said Jim Ryan, executive director of the San Diego County Taxpayers Assn. “This (budget process) has been played out at such a high level for so many months that it got many people riled up and upset.”

Emotions ran high Thursday, as more than 300 San Diegans jammed City Hall elevators on the way up to the council’s 12th-floor chambers. Most came to protest the council’s earlier decision to reduce funding to four organizations that promote the city as a tourist and business mecca.

During the first half of the meeting, the overflow crowd watched as council members patched together a $25.9-million package of budget cuts and tax and fee increases that eliminated most of the $38-million general fund shortfall.

Shortly after 8:30 p.m., when the council seemed to be at a loss for further cuts and revenue increases, City Manager John Lockwood recommended that the council balance the budget by trimming $12.1 million more from various programs and capital improvement projects.

Lockwood identified some of those cuts--including the elimination of $4 million that had been earmarked to buy land for a new police substation in District 4.

But the council directed Lockwood to use his discretion when it comes to making about $10 million in cuts, a directive that left some council members wondering if the budget was indeed balanced.

“I honestly don’t know where some of those cuts will occur,” Councilman Ron Roberts said Friday. “I’m still puzzled and, quite frankly, I’m a little disappointed that something like that could happen in the budget process.”

Roberts was insistent that Lockwood not make the cuts from the police and fire budgets that he fought hard to protect during the lengthy budget process. Roberts pledged to protect those departments when the budget ordinance returns to the council July 18.

Similarly, Councilwoman Abbe Wolfsheimer on Friday made it clear that she would not stand idly by if Lockwood attempted to balance the budget on the backs of the city’s “people programs” such as parks, recreation and libraries.

And, Councilwoman Linda Bernhardt on Friday maintained that the people programs “are taken care of in this budget. . . . For the first time in history they have a fair share of the pie.” Bernhardt echoed Wolfsheimer’s belief that “people programs” are not to be touched by the upcoming round of cuts.

Councilman Bruce Henderson suggested attrition as an obvious way to cut the budget. City employment, which now stands at about 9,000, will “still grow during the coming year, but just not as fast,” Henderson said. Bernhardt suggested Lockwood could find $4.5 million in needed cuts simply by limiting the employees who are hired next year to replace workers who retire or resign.

Mayor Maureen O’Connor, who fought hard in recent weeks for a budget that would freeze most city departments at their current annual levels, believes the $10 million in cuts should be spread across the board, mayoral spokesman Paul Downey said Friday. “Everybody may be hurt a little bit,” Downey said.

When it came time Thursday to increase revenue, council members carefully crafted a package of tax and fee increases that was designed to insulate most San Diegans from direct contact with those taxes.

As a result, most of the taxes will be felt by San Diego businesses.

For example, the council increased the business license fee to $125, up from $30. And, the City Council instituted a fee on landlords who rent residential properties. Tourists will pay a 3% tax on rental cars hired in the city limits, and the 9% hotel and motel occupancy tax was extended to recreational vehicle parks.

But council members on Thursday rejected a utility user tax on business and commercial customers of gas, electric, cable and telephone companies.

That cautious approach to raising taxes was part of the council’s strategy to seek support in November for tax increases that would fund specific programs. Council members on Thursday directed the city manager to report back on five possible tax increases that could be placed before voters in November. The five proposals being considered are:

* A $20-million property tax that would be used to finance the employee retirement fund, which is now financed through the general fund, the same fund that provides for public safety, recreation and library services.

* A $24.5-million property tax designed to increase the number of police officers in San Diego. The ballot issue, if successful, would increase the police ratio to two officers for every 1,000 city residents.

* A ballot issue that would repeal a 1919 ordinance that provided free refuse collection for all city residents. The ballot issue would allow the city to charge about $90 a year for refuse pickup.

* A bond issue that would raise $100 million for the purchase of new open space, as well as for maintenance of existing parks and open spaces.

* A $140-million library bond issue that would fund construction of a new, downtown central library and the rehabilitation or construction of nearly a dozen branch facilities.

Those proposed ballot initiatives would play an integral role in the five-year plan O’Connor hopes to fashion with the help of a committee that soon will be appointed, Downey said.

Although council members seem to agree with O’Connor on the need for a five-year plan, there is disagreement on what that plan should include.

“I’m puzzled by the mayor’s talk of putting a five-year plan on the ballot,” Roberts said. “We started out talking about a five-year plan that we could use as a planning tool. I don’t know how that got switched into a ballot issue.”

Henderson questioned the wisdom of attempting to place so many ballot initiatives on the ballot in November. “You can have all of them go down,” said Henderson, who recommended that the council consider placing a single bond issue--the open space initiative--on the ballot in November.