By Doug Porter
The sunny optimism of the Faulconer administration continues even as the dark clouds signifying stormy weather gather on the horizon.
A looming $380 million spike in pension costs and the possibility of $300+ million in damages from class action lawsuits have made their way into the news over the past few days. The first budgetary hit can be described as an act of God (though some conservatives will probably blame Obamacare); the second should best be described as an act of stupidity.
Welcome to Friday, when I get to take a break from the pre-election analysis of candidates and ballot measures to point out other news for the conscious consumer. And I’ll top it all off with the weekly calendar of progressive events.
Rainy Day Fund Short
Last week San Diego’s pension board adopted new actuarial estimates based on data showing employees and retirees living significantly longer than expected.
The city will need to kick in an average of another $50 million annually over the next few years to keep its unfunded pension debt from rising.
The question of paying this bill sooner than later (it could be deferred until the actual benefits of the city’s pension reform emerge in 2029) stalled at the pension board meeting.
From the Union-Tribune:
Mayor Kevin Faulconer said on Friday that the city plans to cover all of next fiscal year’s higher payment.
“We are going to continue doing the right thing for taxpayers and retirees by paying next year’s new pension bill in full,” he said. “We’re not going to put the city’s hard-earned financial health at risk by passing the buck. The silver lining is that we have time to prepare because we know about this many months before we develop next year’s budget.”
The mayor’s pension stabilization fund has a total of $22 million banked. Assuming the UT article’s prediction of a $43 million spike for next year is accurate (it rises in subsequent years), the remaining $21 million will come out of next year’s monies for goods and services.
A $300 Million Legal Blunder
The city apparently cut off its nose to spite its face in resolving a lawsuit challenging the legality of the 2012 hike in the Tourism Occupancy not-a-tax collected by local hoteliers.
The lawsuit filed by attorney Cory Briggs on behalf of San Diegan for Open Government was dismissed recently following a city council revision of the law authorizing the assessment/fee/tax only applies to properties with 70 rooms or more.
As a result, Briggs’ plaintiff no longer had standing to sue. The tourism industry and the city tried to spin this dismissal as a victory, touting up the freeing of a $30 million reserve fund.
Except they screwed up. Big time.
From the Union-Tribune story by Dan McSwain:
On Monday, Ronald Marron, a San Diego lawyer who specializes in class actions, filed a claim against the city government — typically a precursor to a lawsuit — seeking the return of $100 million or more to guests who paid a 2 percent assessment on hotel stays that goes to tourism marketing. Separately, a lawsuit seeking a similar amount was filed Sept. 1 by Irvine attorney John McClendon.
Both lawyers say the tourism assessment is really an illegal tax, because it was approved in 2012 by the City Council and never went before voters, as required by California’s constitution.
If this sounds familiar, it’s essentially the same argument lodged against the city and its Tourism Management District by Cory Briggs, the public interest lawyer whose Measure D asks voters in November to effectively approve the assessment, as well as inject taxpayer oversight and public audits into San Diego’s tourism efforts, among other things.
The $100 million figure comes from the estimated amount of the fee-not-a-tax collected over the past four years.
Since the lawsuit presumably would allege San Diego’s major hotels misled guests by charging 12.5 percent of the room rate on bills under the general heading of “local tax,” the damages would then be included under consumer fraud statutes and triple damages could apply.
There are plenty of “IFs” along the way. A lawsuit isn’t over until the appeals process runs out.
For San Diego taxpayers, the irony is that their leaders may have just passed up a chance to step off the legal railroad tracks.
As recently as July, Briggs and the city’s tourism district were close to settling his lawsuit. Nobody is talking publicly about the terms, so we may never know how close.
Yet it’s reasonable to assume that any settlement would have required a judge to “validate” the district’s position that no illegal taxation was involved. Such validation would have insulated the city and hotel owners from future suits on the tax question.
Getting a judge to sign off on the deal protecting the city was part of an original settlement negotiated back in April.
Briggs even called a press conference last spring to announce a deal had been made after NBC7 got a tip from a disgruntled hotelier saying something was in the works.
The deal, however, was contingent on the mayor’s approval, and the hoteliers efforts to gain an audience at city hall were stymied by scheduling difficulties. And when word leaked, the mayor balked.
In May, the Tourism Marketing District asked the city to change the ordinance to exempt hotels with less than 70 rooms. The spin on this move was that AirBnB hosts needed to be accommodated. In fact, this move was the basis for dismissal of the lawsuit brought by Briggs and SDOG.
Another settlement was at hand on July 13th and collapsed.
At the root of these collapses were objections to paying Briggs legal fees.
Because the dismissal of SDOG’s lawsuit was the result of a city council action, a judge is likely to find that there was a basis for filing the lawsuit in the first place and compel payment of those fees anyway.
Back to McSwain at the UT for one final bit of irony:
Even at $5 million, paying off Briggs may have represented cheap insurance against these new suits seeking $100 million, and quite possibly $400 million.
Maybe it’s time to call for a contest to create a millennial version of the mocking slogan “Enron By The Sea.”
Weekly Progressive Calendar: Upcoming in San Diego
Get your event listed: I try to list the next 10 days or so of mostly non-commercial events I think our readers might find of interest. I source my material from social media listings and press releases. In cases where there are competing but similar events or campaigns of the progressive persuasion, I do my best to list everything.
Women of Substance Showcase
Women of Substance Radio presents their Showcase featuring San Diego’s Finest Women Singer-Songwriters: Randi Driscoll, Lisa Sanders, Sara Petite, M.E Law and Donna Larsen. $12.50 IN ADVANCE $15 at the Door
2nd Annual Conference on Labor & Community Solidarity
Saturday, September 17, 10am-4pm
San Diego State University
Storm Hall 101, 105/Storm Storm Hall West 011
Info & Updates (Registration Required, Sliding Scale Admission)
When We Fight, We Win! Speakers include Dennis Childs, author of Slaves of the State: Black Incarceration from the Chain Gang to the Penitentiary, Gloria Gracida, La Alianza de San Quentin, Amy Muldoon (via Skpe), co-founder Verizon Strike Solidairy Committee, and David Bacon, author, The Right to Stay Home: How US Policy Drives Mexican Immigration.
Scarry Garry Show’s Variety Party
Saturday, September 17, 8pm
Grass Roots Oasis
3130 Moore St
Info & Updates
A Free Show (18 & up)
Magicians & Entertainers: Claire Sparr, Steve Magic, & Rollie
Stand Up Comics:
Jeff The Ghost, Ruben Alvarado & Special Guests.
With a live performance by:
Scarry Garry Show And The Deity Girls Dance Team
Stop TPP Freeway Bannering & Light Brigade
Saturday, September 17, 4:45pm
La Jolla Village Dr/I-5 Overpass
Info & Updates
Congressman Scott Peters is holding one of his last fundraisers before Election Day this Saturday in La Jolla from 5:30 to 7:00 PM. We plan to be on the south side of the La Jolla Village Drive Overpass on the I-5 (facing northbound traffic) with Banners and Signs during daylight, and with Lighted Letters from about 6:45-7:45p.
Please join us whenever you can — park on La Jolla Village Drive, east of the I-5, on the south side (by the Hyatt).
Last Wednesday, in a meeting with Women Occupy SD and SanDiego350 representatives, Cong. Peters stated that if the vote on the Trans-Pacific Partnership Agreement were held today, he would vote Yes. HOWEVER, at the end of an hour-long meeting, he actually said he would like to continue the discussion about the environmental impacts of the TPP.
Concert for Cannabis Justice
Music for Proposition 64
Sunday, September 18, 4pm
Grass Roots Oasis
3130 Moore St
Info & Updates (Admission)
Join amazing singer songwriters Jeff Berkley, Kiyoshi Shelton, Kimm Rogers, Reverend Stickman and Gaby Aparicio for a wonderful night of music and social justice!
The illogical war on cannabis has devastated lives, burdened our jail system and unjustly targeted African Americans and Latinos with its meaningless persecution of a medicinal plant. Proposition 64 will stop this prosecution in the state of California by legalizing cannabis for adult use and creating a legal market for adult use cannabis distribution.
Join us for a wonderful night of music, refreshments and good vibes in support of the cause. All proceeds will go directly to the Proposition 64 campaign.
AIDS Walk San Diego
Individuals, teams, social clubs, local businesses, schools, universities, and faith organizations from all over San Diego will come together for AIDS Walk/Run. We gather to remember the many who were lost to AIDS and to raise vital funds to support all of the San Diegans living today with HIV disease. Please join us for San Diego’s largest fundraising event for HIV disease and be part of this incredible community experience!
Today we know the best weapons to fight back against HIV and prevent its spread are – getting tested at least annually, knowing your HIV status and that of your partner, using prevention tools like condoms, PrEP and PEP, staying connected to medical care & medication and getting to undetectable viral loads. Join us and #bethegeneration that helps eliminate new cases of HIV.
with DeRay Mckesson and Reihan Salam
Saturday, September 24, 8:30am- All Day
Conrad Prebys Aztec Student Union
San Diego State University
Info & Updates
Held in partnership with the SDSU School of Journalism and Media Studies, this all-day public affairs conference will feature two national keynote speakers, as well as workshops and sessions that focus on the November ballot.
Black Lives Matter activist DeRay Mckesson and conservative commentator Reihan Salam will keynote the conference.
Sessions throughout the day will break down some of the most complex races and contentious issues that San Diego residents will vote on this year. Confirmed sessions cover the District 9 City Council and City Attorney races; campaign financing; the dueling death-penalty measures; open democracy and more.
Panel moderators include journalists from Voice of San Diego and our media partners at KPBS, inewsource, NBC 7 San Diego and others.
More information and full schedule: http://politifest.org
Event FAQs: http://goo.gl/wrLckX
Tickets are free to ALL students and teachers, $40 for general public, and $25 for VOSD members. To reserve tickets, go here: http://politifest.eventbrite.com
If the ticket cost is stopping you from coming, you can apply for complimentary tickets here: http://goo.gl/JlvjUP
100,000 Poets for Change
Saturday, September 24, 2-5pm
Grass Roots Oasis
3130 Moore St
Info & Updates
POETS! On September 24, 2016 poets, musicians and artists in over 500 events in over 100 countries will focus on issues of peace, justice, and sustainability. This important annual global act of solidarity is the core activity of 100 Thousand Poets for Change, a non-profit organization. 100 Thousand Poets for Change offers an opportunity for a peaceful global discussion of issues such as war, global warming, poverty, racism, gender inequality, homelessness, gun violence, police brutality, lack of affordable medical care, censorship, and animal cruelty. Please Join us and add your voice to this inspiring, open, and FREE event!
Protest the Poway Rodeo
Saturday, September 24, 5:15-7:30pm
14336 Tierra Bonita Rd, Poway
Info & Updates
Rodeo performers have been documented beating, kicking, and shocking normally docile cows and horses in chutes and holding pens. “Bucking broncos” and steers are provoked with electric prods, sharp sticks, caustic ointments, and the pinching “bucking” strap. By the time the animals are released into the arena, they are frantic. Calves, roped when running, have their necks snapped back by the lasso, often resulting in neck and back injuries, bruises, broken bones, and internal bleeding. Rodeos are promoted as rough-and-tough exercises of human skill and courage in conquering the fierce, untamed beasts of the Wild West. But in reality, rodeos are nothing more than manipulative displays of human domination over animals, thinly disguised as entertainment. What began in the 1800s as a contest of skill among cowboys has become a show motivated by greed and big profits.
Join award-winning folk/pop duo The Lovebirds for a rare 2016 performance! Comprised of songwriters Lindsay White and Veronica May, The Lovebirds fall somewhere on the female duo scale between The Indigo Girls and Tegan and Sara. They have shared the stage with notable acts like David Crosby, The Lone Bellow, Shook Twins, Steve Poltz, Susanna Hoffs, Jack Tempchin, Bushwalla, Raining Jane, and more.
The Lovebirds were recently selected as winners of the Kerrville Folk Festival New Folk songwriting contest and as official showcase performers for Folk Alliance International. Their latest album, “Breakup Shmakeup,” chronicles the experience of ending their romantic partnership in order to preserve their musical partnership.
Caution: a live performance by The Lovebirds is a tornado of sights and sounds which may include short skirts, high heels, skinny ties, confidence glasses, percussive guitar, rock ukulele, stand-up drumkits, and harmonies that won’t quit.
On This Day: 1810 – The Mexicans began a revolt against Spanish rule. Miguel Hidalgo y Costilla, a Catholic priest of Spanish descent, declared Mexico’s independence from Spain in the small town of Dolores. 1964 – “Shindig!” premiered on ABC. The first show opened with Sam Cooke, The Everly Brothers, The Wellingtons, The Righteous Brothers, Bobby Sherman and Alan Sues. 1974 – President Ford announced a conditional amnesty program for draft-evaders and deserters during the Vietnam War.
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