The importance of Felipe Monroig: understanding real costs

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March 4, 2014 by Omar Passons

With six weeks to put together his 1st budget (due to City Council on April 15) this seems like a good photo to start the Faulconer Administration

With six weeks to put together his 1st budget (due to City Council on April 15) this seems like a good photo to start the Faulconer Administration

Today Mayor-elect Kevin Faulconer became Mayor Faulconer at a swearing in ceremony at the Jacobs Center for Neighborhood Innovation.  That’s a large complex in the Southeastern San Diego community that combines great transit, massive opportunity for positive development and really unfortunate and complicated historical struggles. Shining a light at Market & Euclid is a good thing…and so is shining a light on how our City will deal with some of its most serious problems.  I learned the other day that Mayor Faulconer hired a gentleman named Felipe Monroig to serve on his leadership team and this post is about why that hire is an exceedingly important moment for the City of San Diego…

Two quick points before I get started.  First, there are plenty of things that may be sticking points to come out of this or any other municipal administration.  I can’t tackle them all and expect many other voices will chime in over time.  Personally, I’ll want way more funding for permanent supportive housing and an earnest shift to Housing First for the homeless and I don’t yet know exactly where this administration will be on those issues. I’ve had the conversation with Mr. Faulconer about Connections Housing only having 223 beds (with a few thousand unsheltered homeless in the county), so I am certain at the very least this issue is on his radar screen.  But this site is about city-owned buildings, storm drains, water systems, streets and other assets that make our community livable, so that’s where I’ll focus. Second, many other aspects of City government also need resources.  For example, the San Diego Police Department has made its need for tens of millions of dollars over the next few years well known, too. (see SDPD 5-yr plan update 10-2013)

So I don’t mean to disregard other areas, but instead to explain one that I think people may like to know more about.

Understanding the issues

I wrote about the basics of how the City pays for things here.  There are several reasons to be optimistic about Mr. Monroig’s hire as it relates to our city’s physical condition. He wrote this post in September of 2013 about the delicate balance between fixing what we have and restoring services.  A few of the most important reasons to be optimistic include:

  • There will be someone at the highest level of the Administration that absolutely understands that our current deficit in maintaining our existing publicly owned property is at least $30 Million each year (and may be more than $60 Million). By comparison, the personnel budget for Parks & Recreation in 2014 minus fringe benefits – for ALL city parks – is $31 Million.
  • He understands that the $50.8 Million “surplus” reported in the current FY 2014 Mid-Year Budget Monitoring Report No. 14-020 (discussed below) does not include the cost to keep our current City property from deteriorating at a rate of at least 7.5% per year.

The City’s budget guru (called the Independent Budget Analyst) created a pretty easy guide to understanding public property, so I recommend reading that here.

In addition to a grasp of the less than gleaming budget numbers the city faces, there are a few other very important reasons to believe that Mr. Monroig will help make sure the City gives us a realistic picture of where we are and where we’re headed.  You may remember I wrote about “levels of service” here. In this context, a level of service refers to how well we want our city-owned property to function.  If we only owned one building, we might want it to be at optimum condition all the time, every year.  But we own over 1700 buildings, so we probably can’t afford to treat them all like this fancy thingKey Point: Monroig understands the policy underlying levels of service so the process for making those decisions is likely to be clear and something the Faulconer administration will be able to articulate to communities, business owners and others in the city.

We don’t have to fix the entire XX Billion in old and missing city infrastructure to have the system we want.  If we identify the levels of service using something more than a divining rod we may very well determine that some things don’t have to even be in use all the time, let alone functioning flawlessly.  We might save some money by thinking about what optimum levels of service are.  And we might save some money by *gasp* selling some of our most maintenance-intensive assets.  If I own a broken bike, it is almost useless to me but I still have the “liability” on my personal balance sheet of spending the $100 to fix it.  If I sell it for $100 to North Park Bikes, a very cool bike shop with friendly service in North Park, not only have I made a $100 but I have also cleared $100 off my “liability” sheet! Everybody wins, let’s head to Monkey Paw (a gold-medal winning San Diego Craft brewery) to celebrate.

The San Diego we want to be

The video above is one example of the San Diego some communities very much want (I am firmly in this camp for mid-city communities like North Park, South Park, Golden Hill and Hillcrest).  The reason I put the video in here is because it highlights something important that the Faulconer administration will have to grapple with.  How do we start to build towards the City we want to be with the challenges we already have related to the current condition of our city’s property?  This brings me to my final point in why I think we can expect a very important brand of clarity out of Mr. Monroig and the Faulconer administration. Monroig understands the opportunities, and perhaps more importantly the challenges, a massive infrastructure bond presents.

The Mega Bond

I didn’t come up with this name, the good folks at Voice of San Diego did (here).  You will sometimes hear elected officials or read news accounts of $100 Million bonds for improving infrastructure.  That sounds like a lot of money, right?  Well, if you had a car that cost $200,000 (a really nice car) and you paid $10,000 a year on it, you’d be paying for like 20 years, right? That’s kind of what these “little” bonds are like.  Good to keep us moving, but not ever really going to get me to my bike-loving, craft brewery-frequenting, pedestrian-embracing urban utopia.  Nope, we would need a really BIG bond to handle a meaningful portion of major reconstruction and new buildings (and sneaking in the extra contracting staff we’d need to comply with all those public works laws). So I’ll use the term ‘mega bond’ to differentiate it from the normal, annual stuff.

*this is where I was going to upload a very cool picture of smoke and mirrors but the system isn’t working – alas*

Okay, back to Mr. Monroig.  He just came over from the San Diego County Taxpayers Association.  They spent quite a bit of time over the last few years coming up with ways to evaluate whether a bond for a government entity to build stuff is a good idea.  Technically they also vehemently opposed a small sales tax that, in my opinion, we really needed, but whatever, today is a new day. While I didn’t agree with every choice (like the aforementioned sales tax fight), I did find a couple things that are very, very important now. The single most important thing is that I know with certainty that Mr. Monroig has given considered thought to how to maintain the new things we might build.  If I could hook neon lights up to that last sentence I surely would.  We basically have a Zuckerberg’s bank account-sized deficiency in the system.   Fixing it will be important.  But if we take on a bunch more debt two things happen.  One, we have to pay the credit card payment each month.  Two, we have a bunch of new stuff but no extra money to pay when it starts to break down.  Good news for us, Mr. Monroig is a senior member of the Faulconer Administration who intimately understands these policy issues.

I look forward to the next couple years to see how this plays out.

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