Under the radar

Much has been made of the possibility that San Diego city officials might soon consider asking more residents to pay for trash hauling, but there’s been little discussion of another fee—one that could raise roughly as much money annually as an expanded garbage fee.

Today, property owners pay a nominal fee to help the city recoup the cost of complying with clean-water rules; each month, homeowners pay a 95-cent storm-water fee, while business owners chip in 6.5 cents per 100 cubic feet of property. This year, however, that fee will cover only $6 million of the nearly $49-million it costs the city to deal with rain water that flows into the ocean and other bodies of water.

On Jan. 15, the City Council’s Independent Budget Analyst’s office (IBA) released a report that included raising the storm-water fee among numerous ideas for solving the city’s chronic budget deficit.

Tom Haynes, a policy analyst for the IBA, who presented the report to the council’s Budget Committee on Jan. 21, told CityBeat that IBA Andrea Telvin isn’t necessarily recommending raising the fee, but he noted that she has, in the past, recommended that city officials identify a dedicated source of funding for the storm-water program.

Compliance with state rules has “continually taken up a larger and larger share of total general-fund resources,” Haynes said. Indeed, the city spent $12.9 million on pollution prevention and storm-drain infrastructure just three years ago, compared with $48.8 million in the fiscal year that ends June 30. Much of that increase was prompted by new rules in the storm-water permit issued to the city by the Regional Water Quality Control Board.

The regional water board issues storm-water permits to local governments every five years. The permit is essentially a large document laying out all the rules for running a storm-water department. In 2007, the water board added sweeping new rules for regional cooperation and dealing with area watersheds, which added costs for labor, infrastructure construction, education and enforcement among other things.  

“The storm-water-compliance activities are essentially mandated expenditures,” Haynes said. “They constitute federal and state mandates that the city has to comply with. If we fall out of compliance, we run the risk of facing fairly substantial daily fines.” And without adequate funding, the general fund has to cover the difference. “The general fund, of course, has a lot of competing priorities, and particularly in tough budget times right now, the city is having to make judgments on what services to fund,” Haynes said. “It limits the options to a certain degree.”

In other words, in addition to high pension payments and low tax revenues, the under-funded storm-water mandate is one of the reasons libraries and recreation centers are in danger of closure.

But aside from the IBA, no one wants to talk about it—yet.

“Pretty much everything is going to be on the table; everything will be considered,” said Michelle Ganon, spokesperson for City Council President Ben Hueso. However, she added, “because of the reaction that people are going to have to this whole thing, it really would be improper to give specific directional indicators until the process is begun.”

Mayor Jerry Sanders, too, is not yet ready to hop aboard the fee-increase train.

“The mayor’s position,” spokesperson Rachel Laing said, “is that it’s premature to discuss these fees when there is a major expense-cutting reform we haven’t accomplished—specifically, bringing the enormously high retirement system costs in line with economic reality. The public won’t support giving city government more of their hard-earned dollars until we regain their faith that the money will be used wisely.”

Tony Young, who chairs the City Council’s Budget Committee, agrees. “There might be a good case for more revenues, but we’re not close to that,” he said. “I’m doing this on the assumption that there will be no revenue generation. We have to balance this first, so the people know we can make the tough decisions. We have to be ready to push that button, to make the cuts, to do things that might be politically hard.”

However, if the council shows it can make difficult cuts, Young said, the public might become more amenable to fee hikes: “If we’re good boys and girls, then we might get an increase.”

According to the IBA report, the city could, starting in July 2010, raise up to an additional $38.1 million if officials were to opt for “full cost recovery” from property owners, which would work out to a seven-fold fee increase. By comparison, recouping the full cost of trash hauling would net the city an additional $40 million annually. The IBA estimates that the city’s budget deficit come July will be roughly $50 million, jumping to nearly $130 million in fiscal year 2012.

Haynes said that based on court rulings, the IBA’s office believes a storm-water fee increase would need some sort of voter approval, but whether that would be among all voters or only property owners is unclear.

In response to a question about the legal requirements of a fee increase, Gina Coburn, spokesperson for City Attorney Jan Goldsmith, had this to say in an e-mail: “If and when we provide advice to the Mayor and City Council on this matter, we will be happy to let you know.”    

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