San Diego’s infrastructure backlog could surge as COVID-19 shakes city finances

San Diego’s infrastructure needs, which have ballooned over the past decade, have been a top priority of Mayor Kevin Faulconer’s administration. But as Faulconer enters the last eight months of his term, COVID-19 has thrown city finances off track and slowed his ability to tackle a long to-do list.

That means many of San Diego’s urgent needs may have to be put on hold. Among the items that need fixing: repairs and updating to park buildings, coastal erosion work and replacement of sewer pipes. The city’s streetlight program is underfunded by $195 million, and its sidewalks are in disarray with about 81,000 needing repairs or replacement.

“It’s an unbelievable challenge,” said former San Diego Mayor Jerry Sanders, now president and CEO of the San Diego Regional Chamber of Commerce. “I faced some budget problems when I was at the city, and this is just bigger than I’ve ever seen.”

Sanders famously steered the city away from the brink of bankruptcy during the seven years he was in office from December 2005 to December 2012 – a time that included the Great Recession. To do that, he and the City Council slashed services and cut more than 1,600 jobs.

So far, Faulconer’s budget proposal for the fiscal year that begins July 1 is a 10% reduction from last year’s spending plan – and imposes significant cuts to areas with infrastructure-related spending, including in the Parks and Recreation and Transportation departments.

More cuts are likely coming. Since April 15, when his budget proposal was released, Faulconer has announced that the overall budget deficit has expanded from $250 million to $300 million for the remainder of this fiscal year and the upcoming fiscal year. The City Council will be discussing that when it meets at 6 p.m. today for its first public hearing on the proposed budget.

The mayor’s revised budget and details on any additional cuts are scheduled to be released on May 19. The final budget – and Faulconer’s last as mayor – has to be approved by the end of June.

Ultimately, whoever voters elect as the next mayor in November will be charged with seeing that budget through the rest of the fiscal year. That will be either Councilwoman Barbara Bry or Assemblyman Todd Gloria. They’re both Democrats, and one of them will replace Republican Faulconer in December. Both spoke to inewsource and acknowledged the budget challenges that lie ahead.

Budget cuts recommended so far

To balance next year’s budget, Faulconer has proposed cutting library operations from seven to five days a week, reducing recreation center hours by 25%, decreasing arts and culture grant funding by 50%, and eliminating 354 positions.

Infrastructure-related cuts in a listing of budget reductions by department include:

• $1 million for storm water monitoring, maintenance and related consultant services.
• $750,000 for weed abatement and landscaping.
• $410,000 by reducing brush management from 509 to 466 acres. inewsource previously reported the city’s brush rules lacked regular monitoring.
• $332,000 by eliminating five park maintenance and safety positions.
• $200,000 for sidewalk sanitizing services.
• $131,000 by eliminating two pothole patching positions.
• $45,000 for maintenance and repair of libraries.

Faulconer is also requesting to redirect $29.4 million in voter approved infrastructure funds from a 2016 ballot measure to help cut the deficit, which is the result of plummeting hotel room and sales tax revenues caused by the COVID-19 shutdown. The move requires council approval.

The mayor defended the budget proposal at a news conference this week, saying many capital projects will continue including new fire stations and libraries. He assured that the city will have a “very healthy and robust infrastructure budget” with an emphasis on road repairs.

“We’ve made so many strides in that area, and by the time this year ends my goal was to actually repave about half of the miles of the road in the entire city during my administration,” Faulconer said. “We are absolutely on track to do that, and we will do that.”

Infrastructure problems years in the making

San Diego’s backlog of infrastructure needs has long frustrated residents. A decade ago, the deferred maintenance bill totaled $563.4 million – a number that captured street, facility and storm drain catch-up repairs.

The city now has a $2.16 billion infrastructure funding gap, according to a report released in February that takes a five-year look at the challenges. Notably, that figure predates the financial woes caused by COVID-19, including the shuttering of businesses and hotels and the cancellation of major conventions. Even so, the funding gap has grown considerably each year since 2017, when the backlog totaled $1.27 billion.

But there are signs progress has been made under Faulconer:

The city has increased the pace of street repairs since he took office in March 2014. For comparison, in April 2010 the street repair backlog was estimated at $250.8 million. The most recent report shows it’s at $219.5 million for the next five years.

In addition, workers have undergrounded close to 60 miles of overhead utilities and replaced more than 270 miles of sewer pipelines, according to a presentation in January by Public Works Director James Nagelvoort.

But the city’s infrastructure needs are expansive. Most of the roofs on city buildings, for example, were built between 1960 and 1989 and are beyond their typical life span.

The city’s Get It Done app for reporting problems shows that since the beginning of the year about 925 pothole reports have been labeled “new” or “in process,” while about 7,700 have been closed. Streetlight problems total about 1,800 unresolved reports, with nearly 1,000 having been closed.

A pavement condition assessment – a key tool in the past for deciding when and how to repair streets – is also about a year behind schedule.

Despite those challenges, Nagelvoort told inewsource in an emailed statement the city’s capital improvement funding has doubled since fiscal 2014 to $600 million and much was accomplished with the money. However, he acknowledged things are different now.

“The COVID-19 pandemic has brought about a new reality that funding for the Capital Improvements Program may not be as robust as years past, so we are looking for ways to streamline our operations to meet the challenges that this situation presents,” he said.

Hisham Foad, chair of San Diego State University’s Economics Department, said pushing back needed infrastructure repairs could have a snowball effect for the city.

“If they’re getting delayed, they’re being pushed off. This just means that it’s going to be more expensive to fix them in the future,” Foad said, as the roads and other structures continue to deteriorate.

But he acknowledged the city is required to maintain a balanced budget, so Faulconer must slash spending with revenues plunging.

Whatever final budget cuts Faulconer and the City Council end up making, San Diego’s financial outlook is not likely to improve any time soon, Foad said.

“If you shut down economic activity or you have a huge drop in economic activity, that’s not going to be the sort of thing that you immediately recover from,” Foad said.

Bry or Gloria will take over in December

It will be up to the next mayor – either Bry or Gloria – to steer San Diego’s financial recovery in the wake of the COVID-19 pandemic.

Both candidates told inewsource they want to take advantage of low interest rates as potential funding opportunities and will look for state and federal money to help bring the city infrastructure funds. Both also criticized Faulconer’s handling of proposed employee cuts.

But the two differed on a few key points.

Gloria said he hopes to exceed the level of street repairs Faulconer has completed.

“If you ask any San Diegan, they are unhappy with our current condition of our roads. And it sort of undercuts the argument of the current administration that they have made a transformational change on the condition of our roads,” he said.

Bry didn’t cite specific numbers or benchmarks for street repairs.

“There have been communities in the city that have not gotten a fair share of infrastructure investment,” Bry said. “And it’s not that every community should get the same amount of money. If some communities have infrastructure needs that are more important, I think their needs should be prioritized.”

She said she also wants to look at new technologies to help with street repairs and called for updated pavement condition data.

On redirecting infrastructure money from the 2016 Rebuild San Diego ballot measure, the candidates differed. Faulconer and Councilman Mark Kersey championed the measure when it went before voters, but now the mayor wants to use the funding to help cover the city’s massive budget deficit.

Bry said she hasn’t decided whether to support that change. Faulconer would need six of the nine council members to support his proposal for it to pass.

“My goal is to look other places before taking money away from infrastructure,” Bry said. “This is something that is really important to every resident, and it’s something they count on local government to get right.”

Gloria supports Faulconer’s decision: “I think that’s a reasonable step given the circumstances that we’re in.”

He added that he opposed the ballot measure in 2016 because “it gave the appearance of doing something when it did very little overall.”

Former Mayor Sanders said that whoever voters elect will take office at a challenging time.

“Pay raises are going to be difficult. It means that you’re going to have to cut staff,” Sanders said. “It’s going to be a difficult time, and it’s going to take some good leadership from the next mayor. And I think that we have that opportunity to rally around that individual and really help out.”

inewsource intern Natallie Rocha contributed to this report.