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Stretching Tax Dollars Further: Rethinking How We Deliver Public Services

As Pusblished in the San Diego Daily Transcript; Decenber 11, 2008

Steve Francis

Thursday, December 11, 2008

Believe it or not there is a small silver lining in the recent mid-year budget dispute in the City of San Diego between the Mayor and the City Council.

Whatever the reasons for the dispute, the decision to enact only some of the proposed mid-year reductions will make next year’s budget process even grimmer. By dipping into various reserve accounts to avoid closures of seven branch public libraries and a dozen recreation centers, the Council created an additional $10 million gap in next year’s budget. This is on top of the already projected $43 million dollar deficit in the City’s Fiscal Year (FY) 2010 budget. Moreover, as the San Diego Institute for Policy Research previously pointed out, there is a significant risk that the City’s FY 2010 revenues could come in below projections. Home values are continuing to fall and consumer confidence is at record lows. In the Spring of 2009 the City’s retirement system will calculate the impact of the stock market’s decline and it is very likely that the City will have to significantly increase its contribution, putting even more strains on the already out-of-balance budget.

To find any upside to the decision to delay cuts to the library system and park and recreation will strike some readers as odd. However, what the delay does do is provide a very short window of time to step back and ask fundamental questions about restructuring how the City provides certain valued public services

When it comes to parks and libraries at least three ideas should be considered and discussed in a public forum.

First, the new council should go back and reexamine the decision to exclude the library from the managed competition process. Just a few miles up Interstate 15, the County of Riverside’s 33 branch libraries have been operated since 1997 by Library Systems and Services, Inc. (LSSI). While not the only measure of efficiency, it is telling that in FY 2006 that system provided 62,000 total hours of operation at a cost of $21.4 million– or a per hourly cost of operation of $343. In contrast, San Diego’s system operated 74,897 hours at a cost of $40.6 million or a per-hour-of-operation cost of $542. Even though San Diego’s system is more heavily used and has significantly higher circulation, whether LSSI could save taxpayers money is worth fully exploring as the City seeks to try to stretch resources further.

The City should also engage the County in a dialogue about combining the two library systems. Already the County system operates branches in 11 cities in the region. In the 2008-09 budget the City of San Diego allocates more than $1 million for the salaries and benefits of its Library Director, Deputy Directors, and six Supervising Librarians. Faced with the kind of cuts that were proposed in the mid-year adjustment and the looming need to make even deeper reductions in next year’s budget, it is time for the City to consider ways that the County and City systems could work more closely together and eliminate duplicative overhead.

There are also opportunities for creative thinking when it comes to the Park and Recreation Department. Presently most of the recreation centers support both unstructured recreation as well as fee-support structured programming. At least one option worth exploring is whether private contractors or non-profits would be willing to operate the facilities in exchange for the opportunity to generate revenue from programming.

That would not be entirely new thinking as the City of San Diego already uses this model at least one facility. For almost a decade, the Carmel Mountain Ranch/Sabre Springs Community Pool has been operated by a private company and provides more hours and more programming than what City staff had originally proposed when the pool was opened in the late 1990s. A public-non profit partnership is also working well for the 4S Ranch Community Park where the County maintains the playground and playing fields and the Boys and Girls Club operates the recreation center and pool.

Are those solutions ideal? Perhaps not. As evidenced at the hearings, thousands of San Diegans support their library and park systems and do not want to see change. Contracting with a private entity will require additional expenditures on oversight and it is likely that some “free” programs will be cut back or eliminated.

However, in a time of scarce and diminished resources it is critical for the Mayor and the new Council to explore creative options. If they do not, the fiscal realities that face the City will require cuts much deeper than those proposed last month.