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    Council Adopts FY 07 Budget; Restoring Library Hours, No Add'l Budgeted Neighborhood Cops...And Inquiry By Councilwoman Schipske Re City Hall "Pipeline Fee" Paid By LB Water Dept. Customers

    (Sept. 12, 2006) -- The City Council voted 9-0 on Sept. 12 to adopt a FY 07 budget basically as proposed in August by city management along with recommendations offered to the Council in August by Mayor Bob Foster.

    Tonight's action restores library hours that the Council cut last year doesn't increase budgeted neighborhood police officers for taxpayers beyond FY 06 levels.

    The budget sets aside roughly $2.1 million for a "public safety retention and recruitment fund" as part of a process for addressing "the scope, root cause and service impact" of a "negative trend in public safety retention and recruitment" [money for possible PD raises and/or benefits that might reverse an upturn in officers retiring or leaving].

    The $2.1 million will come from funds expected from settlement of a City Hall lawsuit against Sempra Energy. Instead of reimbursing consumers who paid the oppressive energy bills, City Hall will spend the lawsuit proceeds for additional pay or benefits to LBPD officers.

    At tonight's Council meeting, Mayor Foster also recommended that a projected structural surplus in FY 08 and 09 "not be committed to non-public safety ongoing commitments until this retention issue is resolved. Setting aside potential surpluses is the prudent action, especially with the potential costs associated with the possible solutions."

    In 2005, the LB Police Officers Ass'n agreed to a contract negotiated with City Hall that included sizable raises after LBPD went without raises for several years. During the 2006 election cycle, Mayoral candidate Foster pledged to provide the public with 100 more police officers over the next four years...and the Police Officers Ass'n endorsed Foster.

    The issue of possibly providing LB police officers with increased pay and benefits beyond what was previously negotiated and accepted began being seriously discussed after the election...when it became known that even with the pay raises in the new contract, large numbers of LB officers were departing for jobs with other police agencies...or retiring.

    Mayor Foster strongly recommended that city staff "develop a framework related to construction, financing, siting and development of our public safety facilities...[M]y intent is to move forward expeditiously to build better facilities that will accommodate our future public safety needs and site those in the most advantageous locations."

    The Mayor said he supports a Budget Oversight Committee recommendation for a "multi-year financial strategy to address to address critical public safety needs" calling it a "very prudent recommendation."

    Newly-elected 5th district Councilwoman Gerrie Schipske dropped a potential bombshell when publicly asked city management about a "pipeline fee" imposed by City Hall on the city's Water Dept...meaning the fee is paid by LB consumers without City Hall getting a 2/3 vote of the public under Prop 218.

    Assistant City Manager Christine Shippey replied, "In our Municipal Code, we are allowed to charge permit fees to pipeline companies and we do it for any company that has a pipeline underneath our street. You may recall a few years ago, we applied that particular fee to our water lines and now we are going to be applying that fee to our sewer lines as well."

    Councilwoman Schipske replied, "What I'm wondering, and we don't have to do it today, but if the City Manager could come back to the City Council at some time understanding is that the taxpayers' association in San Diego are actually making noises and movements to go after the city of San Diego for these same fees. So it would be very helpful if we could get some kind memo indicating that we're standing on very firm ground here."

    The San Diego Citizens' Budget Project website says in pertinent part:

    By transferring monies out of the Enterprise and Special Funds, the City [of San Diego] can "balance" the General Fundís budget...Each of these Enterprise and Special Funds have clearly defined purposes and are protected under Proposition 218ís amendments to the State Constitution. Pursuant to Proposition 218, fees collected by the City for the support of these funds (such as the water and sewer fees paid by San Diego homeowners each month) are to be used solely for expenses related to the specific services for which the fee was assessed. Proposition 218 is designed to protect California taxpayers from "hidden taxes" in the form of fees assessed in excess of the cost of service being provided. In other words, if the City were transferring monies out of the water and sewer funds for other uses, it would inflate the "cost of service" in water and sewer -- with the excess charges constituting a hidden tax on San Diego homeowners.

    In response to Councilwoman Schipske raising the issue, City Attorney Bob Shannon replied, "We're very satisfied that this is a legal action, but we'd be happy to come back, off agenda [not routinely agendized for public consumption], to give you a memo..."

    The budget is nominally balanced by including roughly $5+ million in rent which City Hall says is owed by its Queen Mary operator, QSDI (which denies owing any rent and is now seeking bankruptcy protection after City Hall sought to collect the rent that it hadn't collected for an extended period of time.) .

    The budget also includes a transfer to City Hall from the Port of Long Beach of $14.1 million for LB's Tidelands Fund, money that the Port of LB has declared surplus (beyond needed for its own operations).

    LB city management has acknowledged that without the Port transfer, the Tidelands Fund (now being tapped to pay Aquarium bondholders among other items) would be in a deficit [expenses exceeding revenue].

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