Morning Report: Council Narrowly Overrides Some – Not All – Mayoral Vetoes

The San Diego City Council narrowly voted Monday to override some but not all of Mayor Todd Gloria’s moves to reverse changes to the city’s budget that the Council approved earlier this month.

After an initial failed attempt to bat back all of the mayor’s proposed line-item vetoes, a six-member majority voted to accept Gloria’s push not to count on $3 million in projected revenue from digital billboards the city doesn’t now have to balance the budget. 

They also nixed a plan to hire a new chief operating officer who would take back duties that the mayor has taken on since he fired ex-top city bureaucrat Eric Dargan. 

Other Council concessions: The 6-3 majority also voted not to restore Arts, Culture and Community Festivals grant funding that community leaders rallied to bring back and to partially reduce funding for stormwater projects and new Fire-Rescue positions meant to increase the city’s brush fire prevention efforts.

What a Council majority wouldn’t change: The City Council is sticking by revenue assumptions for paid parking at Balboa Park and at the San Diego Zoo, and for credit card transaction fees on parking meters. It’s also sticking with its plan to move staffers now in the Office of Race and Equity into the Office of the Independent Budget Analyst and to hire a new director. The budget the City Council approved also called for the elimination of two high-level city bureaucrats known as deputy chief operating officers who typically oversee multiple city departments and functions, two city communications positions and two management positions in the police and compliance departments.

Councilmembers Jennifer Campbell and Stephen Whitburn rejected these proposed changes while Vivian Moreno, who also rejected the budget the City Council approved on June 10, said she couldn’t support either proposal unless the city dramatically increased funding for stormwater projects.

What the mayor is saying: Gloria wants you to know that if things don’t pan out with budget projections, it’s the City Council’s fault.

“While the Council has now chosen to partially override certain vetoes, I remain concerned that these actions could still weaken our ability to stay on stable financial footing,” Gloria wrote in a statement shortly after the City Council vote. “If their assumptions don’t hold, they’ll be responsible for the fallout: midyear cuts, layoffs, facility closures, brownouts, and broken promises to the communities we all serve.”

What the Council’s saying: Council President Joe LaCava said immediately after the budget vote that he stands ready to schedule votes on budget changes as needed – and ahead of quarterly budget updates if necessary.

Before and during Monday’s vote, some councilmembers criticized the mayor’s line-item vetoes and argued Gloria was failing to respond to the demands of both the City Council and community members who spoke up at budget hearings. 

Another Big COO Vote Coming Today

Last month, our Lisa Halverstadt broke the news that the city’s former top bureaucrat, who Mayor Todd Gloria belatedly said he fired for cause, had reached a tentative $146,000 settlement with the city.

Today the City Council is set to vote on that proposed settlement, which is larger than the three months of severance that ex-COO Eric Dargan sought when he was abruptly dismissed in February.

The proposed settlement follows Dargan’s March discrimination lawsuit against the city alleging that Gloria reneged on a pledge to pay him three months’ severance after a dismissal – and an admission by Gloria’s office that he was fired rather than laid off.

In a report to the City Council about the proposed settlement, Assistant City Attorney Travis Phelps rejected the notion that the city was admitting it had mishandled the situation.

“The settlement is a business decision and the result of a compromise and dismissal of the litigation proceedings and is not an admission of liability by any party,” Phelps wrote. “(The) city and its representatives specifically disclaim any liability or responsibility to (the) plaintiff.”

Reminder: Under the city’s strong mayor form of government, a chief operating officer reporting to the mayor has typically overseen day-to-day city operations. After Dargan’s firing, Gloria took on that role in addition to his mayoral duties. The City Council has been skeptical of how this is working, hence an initial budget move to try to force Gloria to hire a replacement for Dargan. Gloria successfully batted back that change during Monday’s second City Council budget vote. 

County Supe Votes to Watch Today

County supervisors are set to vote today on a proposed $8.6 billion budget.

The Union-Tribune noted that county officials pitched closing a projected $139 million shortfall by reducing capital spending and eliminating 190 positions, most of which are in the county’s Health and Human Services Agency.

The county board’s two Democrats last week highlighted county staff projections that the Trump administration-backed “Big Beautiful Bill” could cost the county $286 million annually.

On that note: Today, Democratic Supervisors Terra Lawson-Remer and Monica Montgomery Steppe will propose a plan to have county staff do a deeper dive on potential impacts and propose strategies to address those new costs, including potentially dipping into county reserves or seeking grants.

Refresher: The two Democrats’ proposal to make it easier to dip into the county’s large reserve fund failed earlier this year. The District 1 supervisors’ race will tip the political leanings of the county board, meaning the county is more likely to tap into its reserves if Imperial Beach Mayor Paloma Aguirre is elected and likely kill it if Chula Vista Mayor John McCann wins the seat.

One more county vote: Supervisors Montgomery Steppe and Republican Joel Anderson are each more quietly proposing to spend up to $20,000 each from their office budgets to attend a six-day September Global Policy Leadership Academy field study on mixed-income housing in Vienna, Austria.

In a joint board letter, the two supervisors write that their participation in the LeSar Development Consultants trip will support county efforts to “increase affordable housing supply, reduce homelessness, and pursue sustainable development.”

“By authorizing this travel, the board will support Supervisor Anderson and Supervisor Montgomery Steppe in gaining valuable insights and learning best practices that can inform San Diego County’s efforts to increase affordable housing supply, reduce homelessness, and pursue sustainable development,” the letter reads.

What the supes are saying: Anderson declined to comment on the item, which will for now appear on the county’s consent agenda which is generally approved with little discussion. A spokesperson for Montgomery Steppe shared a statement that reiterated points in the board letter.

“Supervisor Anderson and Supervisor Montgomery Steppe were both invited to participate in this field study as panelists, sharing insights from San Diego’s housing efforts while learning from Vienna’s internationally recognized housing model,” spokesperson Ariel Gibbs wrote.

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The Morning Report was written by Lisa Halverstadt and Andrea Sanchez-Villafaña. It was edited by Andrea Sanchez-Villafaña.