San Diego Budget and Government Efficiency Committee Meeting – August 2, 2017
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San Diego Budget and Government Efficiency Committee Meeting – August 2, 2017
The Budget and Government Efficiency Committee met on August 2, 2017, to approve the record of actions from the June 21 meeting, review the fiscal year 2018 Statement of Budgetary Principles, consider a resolution opposing the border wall and related divestment, and receive an informational briefing on personnel expenditure budgeting and pension costs.
Consent Calendar
- The committee record of actions from the June 21, 2017 meeting was approved unanimously, with no items pulled for discussion.
Public Comments & Testimony
- Non-agenda public comment: Catherine Rhodes from Point Loma criticized city policies on policing, homelessness, and the loss of single-room occupancy units. She urged the city to file a lawsuit regarding homeless possessions and noted $54 million in pre-2010 housing bonds sitting unused.
- On the Statement of Budgetary Principles: Ms. Rhodes spoke in opposition, suggesting that the city is hiding financial information about certain funds and recommending that staff contact the county auditor-controller about the redevelopment property tax trust fund.
- On the border wall resolution: More than 30 public speakers testified, nearly all in support. Speakers represented the San Diego LGBT Community Center, Assemblymember Gonzalez Fletcher's office, San Diego Indivisible, the San Diego Regional Chamber of Commerce, the San Diego County Democratic Party, labor unions, faith groups, immigrant rights organizations, and many community members. They argued the wall would harm the binational economy, environment, and community; that border crossings already cause billions in losses; and that funds would be better spent on infrastructure, housing, education, and health care. One speaker, Catherine Rhodes, offered a different perspective, suggesting that money for replacement fencing could be used for infrastructure like Smugglers Gulch. Thirteen additional people submitted speaker slips in favor of the resolution without speaking.
Discussion Items
- Item 1: FY2018 Statement of Budgetary Principles. Christiana Gagger from the Office of the Independent Budget Analyst (IBA) presented IBA Report 17-28. She explained that the principles clarify budgetary authority between the mayor and council, require quarterly budget monitoring, a five-year financial outlook, and communication of service-level changes. Councilmember Gomez asked whether quarterly performance measure updates could be implemented and requested that the principles be presented earlier in the budget cycle to guide budget discussions. The committee recommended council approval.
- Item 2: Resolution opposing the border wall and divestment. Gloria Cruz Cardenas from Councilmember Gomez's office presented the resolution opposing Executive Order 13767 and H.R. 1813. The resolution also called for identifying and divesting from companies involved in building the border wall. Councilmember Gomez noted that over $72 billion comes through the border and stressed the importance of binational ties. Councilmember Kate opposed the resolution, particularly the divestment clause, calling it government overreach. Councilmember Sherman also opposed, arguing the city should focus on local issues. Chair Bree supported the resolution. The vote was 2–2, so the resolution will go to the full city council in September without a committee recommendation.
- Item 3: Personnel expenditure budget process, vacancy factor, and ADC. Tracy McCraner, Director of Financial Management, and Matt Vespe presented an informational overview. Key statistics included: FY2018 citywide personnel expenditures of $784.2 million in salaries and $618.6 million in fringe; the general fund personnel budget is $547.1 million in salaries and $438 million in fringe, making up nearly 70% of the general fund. Police and fire account for over 50% of the general fund, with PE making up 86% and 85% of their budgets respectively. For FY2017, the general fund had $53.5 million in overtime and $30.3 million in budgeted vacancy savings. Total salary and wage expenditures were $536.4 million as of July 26. The city's pension payment increased from $261 million in FY2017 to $324 million in FY2018, driven largely by actuarial changes. The presentation also discussed pension projections to 2037, Proposition B defined contribution costs, and Proposition H infrastructure funding. Councilmember Gomez requested a breakdown of overtime by department, and Councilmember Sherman asked for an updated pension projection chart.
Key Outcomes
- The committee recommended council approval of the FY2018 Statement of Budgetary Principles (motion by Chair Bree, seconded by Councilmember Gomez, approved unanimously).
- The border wall resolution received a 2–2 vote and will be forwarded to the full city council without a recommendation.
- The personnel expenditure presentation was informational; no formal action was taken. Staff will provide requested follow-up information on overtime by department and updated pension projections.
Meeting Transcript
Good morning. I will now call the meeting of the budget and government efficiency committee to order. Our quorum is now present, consisting of committee members Kate, Gomez and Sherman, and myself, the chair. Moving right along, the committee record of actions from the June 21st, 2017 meeting will be approved by unanimous consent unless pulled for discussion. No. Nope. Okay, seeing none, we will now proceed with non-agenda public comment. This portion of the agenda provides an opportunity for members of the public to address the committee on items of interest not on the agenda. We have one member of the public who wishes to speak. You will be given two minutes, Catherine Rhodes. Hi, Catherine Rhodes from Point Lama. And hopefully you guys saw that Voice of San Diego article where the policeman basically lied under oath regarding a homeless man just giving a ticket at Mission Bay. What are you guys going to do about it? I wonder. You know, right now nothing's being done by it. That was also that quality of life initiative where you guys are putting a lot of money toward police and environmental services to basically throw away people's property because they're too poor to have some place to live. And a lot of that is because you guys destroyed 10,000 single room occupancy units in the last in the last six years. So you got all people who've been here for that long, you're part of it. Plus, it's still ongoing. You guys have not TEM the stopped it. Um stop the demolition permits from being issued by development services and by Civic San Diego and by the San Diego Housing Commission. They're responsible, but still you guys are not making them responsible. Also, I would ask you to put forward the lawsuit for the homeless possessions. If you would bring it forward and ask the city attorney and tell them what do you guys want to do? And it'd be a perfect, you know, the solution could be everything council member gomez put forward. Um so that's what I would like you guys to do and actually um help these people. It's just so terrible, especially when there's so much cash sitting around literally $54 million in pre-2010 housing bonds where you're paying interest on it and negative arbitrage costs. That's criminal. And I hope you guys actually take care of that issue. Thank you. Do we have any um committee member uh mayor, IBA, or city attorney comments today? Okay. Are there any requests to continue any item on today's agenda? No. As we have no consent agenda items, we'll now proceed directly to action agenda items. Um review a report from the independent budget analyst recommending council approval of the fiscal year 2018 statement of budgetary principles. Umger from the IBA's office. Thank you, Committee Chair Bree and Committee members. I am Christiana Gagger from the Office of the IBA, and I'm here to present the fiscal year 2018 Statement of Budgetary Principles, which was released as attachments one and two to IBA Report 17-28. First, I'd like to give a little background. The statement of budgetary principles was put into place in fiscal year 2008 in order to clarify several issues of budgetary authority between the executive and legislative branches under the strong mayor, strong council form of government. And our office has brought this agreement forward to this committee and to council for approval every year since. In addition to clarifying certain issues of budgetary authority, the principles also provides criteria for the mayor regarding the communication of service-related budget changes to the council that are implemented after the annual budget is adopted. This helps to provide a framework of communication on budget matters between the two branches of government. These clarifications and the provision of a formal framework of communication were an important means to address concerns that the council had at the time the first principles was adopted, that significant budget changes were being made by the executive branch outside of the budget process, and with no communication about those changes to the legislative branch. Additionally, council had also raised concerns about a lack of department performance measures at a time when program and department reductions were occurring in order to balance the city's budget or as part of the city's efficiency programs that were in place at that time. The three original goals of the principles were to set budgetary and operating principles, to establish budget authorities regarding service levels, and to enhance communication on management issues between the executive and legislative branches. Specific requirements that have been incorporated into the principles include agreements that the mayor will provide quarterly budget monitoring reports, that the mayor release a five-year financial outlook in the fall, and that the mayor communicate reductions in programs and services along with any associated reductions in service levels to the city council. Our report also notes that the council has approved a number of other budget documents that have further clarified the process. These documents include uh the guiding principles of a structural budget deficit elimination plan, a resolution of ten fundamental principles for an effective cooperative and transparent mayor council form of government in the city of San Diego, and an ordinance defining mayor and council roles and mid-year adjustments to the annual budget.
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