San Diego’s Gloomy Budget Outlook

San Diego’s Gloomy Budget Outlook


>>>>PEGGY: LOCAL AGENCIES COULD CONTINUE
TO FUND PROJECTS ALREADY UNDERWAY WITH STATE APPROVAL.
THIS WEEK, THE STATE DENIED MOST OF WHAT SAN DIEGO ASKED FOR.
NOW THE CITY CANNOT SPEND MORE THAN $24ÊMILLION OF EAR MARKED FUNDS FOR HOUSING AND HOMELESS
PROJECTS. MY GUEST JAY GOLDSTONE, SAN DIEGO’S CHIEF
OPERATING OFFICER IS HERE TO EXPLAIN THAT’S NOT THE ONLY BLOW TO THE CITY BUDGET THIS
WEEK. THANKS FOR COMING BACK.
LET’S TALK ON THE PENSION REFORM. THIS WEEK THE DIRECTER OF STH VOTER APPROVAL
PENSION SYSTEM REFORM PUT 27ÊMILLION DOLLARS UP FRONT FOR THE FISCAL BUDGET COMING UP.
WHAT IS THAT FOR?>>>>JAY GOLDSTONE: WELL, BECAUSE O OF THE
NEW PENSION REFORM, THE PENSION SYSTEM HAS MADE A DETERMINATION BASED ON THEIR ACTUARIES
ADVICE
IMPACT TO OUR NEXT YEAR’S BUDGET.>>>>PEGGY: WILL THAT HELP US IN THE LONG
RUN?>>>>JAY GOLDSTONE: IN THE LONG RUN IT WILL
ABSOLUTELY SAVE US SOME MONEY. OVER THE NEXT THREE OR FOUR YEARS IT’S GOING.
>>>>PEGGY: DID ANYBODY PLAN FOR THAT? DID ANYBODY LOOK SAY THAT MIGHT BE ONE OF THE
POSSIBLES?>>>>JAY GOLDSTONE: WE REPORTED THAT AND IT
WAS ALSO DISCLOSED IN THE VOTER INFORMATION AND IN PART OF THE FISCAL ANALYSIS.
>>>>PEGGY: LET’S GET TO THE REDEVELOPMENT PORTION OF THIS.
I WANT TO JUST LET PEOPLE KNOW WHAT’S HAPPENING HERE.
SO THE STATE SAID THAT THEY’RE NOT GOING TO ALLOW THE CITY TO SPEND REDEVELOPMENT FUNDS
SPECIFICALLY 20ÊMILLION DOLLARS IN AFFORDABLE HOUSING, 4ÊMILLION IN PERMANENT HOMELESS
SHELTER, AND 5ÊBILLION IN THE CHARGERS STADIUM AND OTHER PROJECTS.
LET’S GET TO THE PERMANENT HOMELESS SHELTER FIRST.
ISN’T THE PROJECT DOWNTOWN ALMOST COMPLETE?>>>>JAY GOLDSTONE: IT SUPPOSED TO BE COMPLETE
IN THE NEXT COUPLE OF WEEKS. THIS ST REALLY RIDICULOUS AND WE’RE REALLY
CONCERNED ABOUT THE STATE DEPARTMENT OF FINANCE’S INTERPRETATION.
THE CITY MADE AN AMENDMENT TO THE AGREEMENT WITH THE DEVELOPER, AND THAT AMENDMENT WAS
BECAUSE THE COST OF THE PROJECT WAS ABOVE THE ORIGINAL ESTIMATES.
THE DEVELOPER WENT OUT AND FOUND THIRD PARTY FUNDING, IT’S NOT REDEVELOPMENT DOLLARS WE
HAD TO AMEND THE AGREEMENT AND RECOGNIZE THIS ADDITIONAL FUNDING.
BECAUSE THAT AMENDMENT CAME AFTER THE LEGISLATION EVEN THOUGH AGAIN IT HAS NO BEARING ON THE
TAX INCREMENT, THE STATE’S DISALLOWING THAT.>>>>PEGGY: ARE YOU GOING TO FIGHT THAT LEGALLY?
>>>>JAY GOLDSTONE: ABSOLUTELY.>>>>PEGGY: WE’LL COME BACK TO THAT A LITTLE
BIT MORE TO WHAT ELSE YOUR ARE GORING TO FIGHT FOR.
LET’S TALK ABOUT THAT 5ÊBILLION DOLLAR NUMBER T.
THAT WAS QUITE SURPRISING WHEN I SAW IT. PART OF IT WAS ABOUT A POTENTIAL SITE FOR
THE CHARGERS.>>>>JAY GOLDSTONE: THAT’S U MUNT OF EXPH
INTO THE CITY OVER A 20 OR 30 YEAR TIME HORIZON. SO IT WASN’T IMMEDIATE, AND IT WASN’T TWO
OR THREE YEARS. BUT IT WAS TO FUND A WHOLE HOST OF PROJECTS
THAT WERE ON THE PLANNING STAGES BUT THEY WEREN’TÊ WE DIDN’T HAVE CONTRACTS IN PLACE,
THEY WERE MAYBE PROJECTS THAT WEREN’T GOING TO START FOR FIVE, TEN YEARS OUT.
>>>>PEGGY: BUT SOME OF THAT WAS TO MAKE SURE TO TRY TO GET IT IN UNDER THIS GUIDELINE THAT
IF YOU HAD ALREADY START AD PROJECT YOU MIGHT BE ABLE TO CONTINUE FUNDING IT.
>>>>JAY GOLDSTONE: THERE WAS THE CONCEPT THAT IF WE HAD A COOPERATION AGREEMENT BETWEEN
THE CITY AND THE REDEVELOPMENT AGENCY THAT CONTRACT MAY BE BINDING AND THEN THE STATE
WOULD ALLOW IT. WE KNEW THAT WAS A LONG SHOT.
SO WE WEREN’T REALLY SURPRISED THAT THE STATE DENIED THAT AGREEMENT.
BUT THEY WERE PROJECTS THAT WERE ALREADY BEING PLANNED BY DOWNTOWN PROJECT AREA YOU, AND
OTHER PARTS OF THE CITY.>>>>PEGGY: IT WASN’T ALL BAD NEWS. THE STATE
DID APPROVE THE 21ÊMILLION FOR EMBARCADERO PROJECT.
WHAT KIND OF DEFICIT, AS IT STANDS NOW, ARE WE LOOKING AT TO THE BUDGET, WITH THE REDEVELOPMENT
AND THE PENSION PLAN.>>>>JAY GOLDSTONE: WE’RE LOOKING AT ABOUT
A 37ÊMILLION DOLLAR PROJECTED DEFICIT FOR THE CITY’S GENERAL FUND BUDGET FOR THE NEXT
FISCAL YEAR. MOST OF THAT’S THE CAUSE OF THE PENSION PAYMENT,
BUT BECAUSE OF THE REDEVELOPMENT DECISION THERE’S ABOUT 14ÊMILLION DOLLARS IN BOND
PAYMENTS, DEBT SERVICE FOR PETCO PARK AND A PORTION THE CONVENTION CENTER EXPANSION
THAT WILL NOW HAVE TO GO BACK TO THE CITY’S GENERAL FUND TO PAY FOR INSTEAD OF RELYING
ON REDEVELOPMENT DOLLARS.>>>>PEGGY: JUST TO FINISH THIS, 37ÊMILLION
TO 41ÊMILLION SOUNDS LIKE A WHOLE LOT OF MONEY.
WHAT PERCENTAGE OF THAT IS SAN DIEGO’S BUDGET?>>>>JAY GOLDSTONE: IT’S ABOUT THREE TO THREE
AND A HALF PERCENT OF OUR GENERAL FUND BUDGET.>>>>PEGGY: WE ARE OUT OF TIME SO JAY GOLDSTONE
THANKS SO MUCH FOR THIS UPDATE.>>>>JAY GOLDSTONE: MY PLEASURE, THANK YOU.

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