Budget surpluses projected for City of San Diego

SAN DIEGO (CNS) – The city of San Diego is projecting budget surpluses throughout the next five fiscal years, according to a financial outlook released by Mayor Kevin Faulconer Friday.

Simply accounting for basic city functions, San Diego would be $58.5 million in the black for the next fiscal year, with the surplus steadily growing until it reaches $164.1 million in Fiscal Year 2020.

However, city officials are grappling with an inability to retain experienced police officers, an infrastructure deficit estimated to be around $2 billion, and a need to comply with state water quality requirements.

With those spending priorities added in, the first-year surplus is reduced to $2.9 million, with growth projected to $61.8 million in FY 2020.

“The good news is we can continue my focus on neighborhood improvements because our economy is growing again and the days of budget cuts appear to be in our rearview mirror,” said Mayor Kevin Faulconer. “With a modest surplus projected, the city must continue with a fiscally responsible and results-driven approach in order for more tax dollars to be invested in roads, parks and other neighborhood amenities.”

Faulconer said he will try to create more economic opportunities in San Diego to further expand revenue.

The city is expecting steady increases in its major income areas of property taxes, sales taxes and hotel room night taxes — all of which are dependent on a stable or growing economy.

While personnel expenses in most areas are expected to remain flat, or growing in order to accommodate existing agreements with the city’s labor unions, the financial outlook projects large increases in pay for police officers. A recent study found that San Diego’s police officers are among the lowest-paid in the state, and other agencies have been luring employees away with promises of higher compensation.

City officials have reopened contract negotiations with the San Diego Police Officers Association, and the outlook includes the impact of the city’s initial offer — a cumulative pay increase of $1.7 million in each of the next two years, which grows to $13 million by 2020.

Changes to holiday and vacation pay policies would add another $3.2 million annually.

Faulconer also wants the city to open six fire stations over the five years in high priority areas, including the east side of Mission Valley, the downtown bayfront, Skyline Hills, Home Avenue in the Mid-City Area, Paradise Hills and College Avenue.

Other infrastructure expenses would be to improve streets, sidewalks and stormwater facilities, among other items.