San Diego City Council prepares for budget fight

SAN DIEGO (KUSI) – San Diego’s city budget is projecting surpluses in the coming years and several fights are brewing between the city council and the mayor’s office over where to spend that money.

Despite surpluses, this week city taxpayers were hit with a 40 percent increase in water bills and next year the hits will keep on coming.

Two of several coming battles will be over infrastructure and creating a reserve fund to cover pension payments that eat up a large part of the city budget.

Mayor Kevin Faulconer would prefer to get the pension issue out of the way before taxpayers will be asked to approve at least one of the three bond measures for infrastructure next year, that total is in the billions of dollars.

The city’s next pension payment could increase to $260 million because the pension systems investments are below normal.

"This means the city’s pension payment next year could escalate by millions of dollars," Mayor Faulconer said.

$12 million, according to Chief Financial Officer Mary Lewis. The mayor wants to create a $15 million reserve fund to cover the losses.

"This reserve fund will help protect against future budget cuts when pension costs rise unexpectedly," the mayor said.

The funding would come from a projected $80 million surplus in the current budget.

Last month, the Democrat majority on the budget committee voted down the mayor’s request. 

"It also doesn’t speak to what is the truth which is we paid our pension bill in full, on time for 11 years in a row, we are not having difficulty in meeting our pension bill goal, what we haven’t been paying in full is our infrastructure bill," said Budget Chair Todd Gloria.

Gloria said the city faces several challenges, the pure water program, infrastructure, the drought, climate change, El Nino, all of which carry financial challenges. 

He’d rather replenish the city’s general reserve fund, giving council the discretion to cover whatever catastrophe may arise.

"There are a number of challenges facing the city, the mayor’s idea to sequester these funds for pensions," Gloria said.

He also said the mayor’s plan could put the city’s credit rating in jeopardy.

"Our credit agencies have suggested the proposal I’m proposing is the fiscally responsible thing to do," he said.

A vote hasn’t been scheduled on either proposal before the full council, which will not be in session for the next couple of weeks.