Budget and Government Efficiency Committee Meeting – June 18, 2025
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Budget and Government Efficiency Committee Meeting – June 18, 2025
The Budget and Government Efficiency Committee of the San Diego City Council met on June 18, 2025, to consider a consent agenda, non-agenda public comments, and three discussion items: a contract extension for a cloud-based permit system, an agreement for sales tax audit services, and the fiscal year 2026 appropriation ordinance. The committee voted on all items, with Council Member Elo Rivera absent for the first two items and present for the final item.
Consent Calendar
- Item 1 – Approval of Minutes (April 16, 2025): The committee voted 3-0 (with Council Member Ela Rivera absent) to approve the minutes of the April 16, 2025 meeting.
Public Comments & Testimony
- Non‑Agenda Public Comments: Six speakers addressed the committee. Diane Grace expressed opposition to increasing the number of marijuana storefronts, citing health impacts and harm to youth. Blair Beekman praised the city’s ADU work and urged continued community engagement, cooperation with SANDAG and the Mexican government on coastal issues, and asked ICE agents to avoid paramilitary tactics. A speaker (the original) criticized the city’s management of Tent City, alleging negligence, contract conflicts of interest, and pending litigation. Kathleen Lippitt questioned the wisdom of funding marijuana industry initiatives given state waivers of $15.2 million in fees in December 2022. Judy String urged restoration of library and recreation center funding and opposed marijuana storefronts, citing health concerns. Michael Schmidt requested road repair on Noble Drive in District 5. Madison warned of health and fiscal costs from federal rescheduling of cannabis from Schedule 1 to Schedule 3, citing emergency room visits and youth usage.
- Item 2 – Acela Contract (Public Comment): Three speakers testified. Joyce Yada expressed concern about the absence of a workforce report in the backup, noted a 65% price reduction, and asked about compliance with the city’s Equal Opportunity Contracting program, stating that the workforce report showed underrepresentation of females in sales. The original questioned the sole source decision, security risks of cloud-based systems, and urged careful technology oversight. Blair Beekman thanked the committee and remarked on Councilmember’s work to improve contract timeliness.
- Item 3 – HDL Companies Contract (Public Comment): Two speakers testified. Joyce Yada praised the vendor’s EOC progress, noting that underrepresentation of Latinos in management and financial/administrative support was improving, and commended the staff report’s mention of increased full‑time employees among Latinos, Asians, and females. The original commented sarcastically on the not‑to‑exceed amount and urged adherence to spending caps.
- Item 4 – FY26 Appropriation Ordinance (Public Comment): Two speakers testified. The original argued for an audit of homeless shelter contractors, alleging funds are misused and that conditions at Tent City are dangerous (deaths, sexual assault, food poisoning, code violations). Blair Beekman urged focusing services on Tent City, supported reviewing ALPR use but called for reducing surveillance technology, and cautioned about potential misuse under new federal policies.
Discussion Items
- Item 2 – Extension of Sole Source Contract with Acela Incorporated: Staff (Tram Chong and others) presented a three‑year extension for cloud‑based permit system hosting and maintenance, not‑to‑exceed $5,537,307.40. The contract includes preferred customer support and ability to switch to self‑hosting. Staff noted a 12% fee increase implemented May 5, 2025, and dynamic pricing from July 2025 to boost revenues. Committee members questioned the delay of the RFP due to budget constraints, the transparency of the vendor’s workforce report, and the one underrepresentation (female sales). Staff explained that implementing a new system would cost $10–15 million, which is currently unfunded. The committee voted 3-0 to approve.
- Item 3 – Agreement with HDL Companies for Sales Tax Audit Services: Staff (Ben Batalia) requested authorization for a five‑year, not‑to‑exceed $5 million agreement with a 7.5% contingency fee (lowest in city history). Over the past five years, the city recovered $16.8 million ($3.3 million annually). The contract includes quarterly reporting at no extra cost. Committee discussed the Business Cooperation Program to maximize local sales tax revenue; staff confirmed the consultant has experience with that program. Councilmember Moreno requested written examples of strategies used by other cities. The committee voted 3-0 to approve.
- Item 4 – Fiscal Year 2026 Appropriation Ordinance: Staff (Ben Batalia and Rolando Charvel) presented the ordinance, which incorporates the budget approved June 10, 2025, subject to the mayor’s line‑item veto. Key updates include removing a restriction on homeless shelter funds, adding three new TOT funds (Measure C) for homelessness, streets, and convention center, and restricting ALPR expenditures pending council review of the 2025 surveillance report. The Independent Budget Analyst (Charles Modica) highlighted the TOT language’s potential to inadvertently authorize new homelessness spending. Councilmember Lee moved to forward the item to the full council with no recommendation, asking the City Attorney to clarify the TOT language to ensure it only allows transfers to budgeted homelessness programs. Councilmember Foster requested a meeting between the IBA and her office to review delegation of authority limits. The motion carried 4-0.
Key Outcomes
- Approved: Consent agenda (item 1) by 3-0.
- Approved: Item 2 (Acela contract extension) by 3-0.
- Approved: Item 3 (HDL Companies agreement) by 3-0.
- Approved: Item 4 (FY26 Appropriation Ordinance) by 4-0, forwarded to City Council with a request for language clarification on TOT homelessness fund transfers and a separate review of delegation of authority.
Meeting Transcript
Good morning, and welcome to the budget and government efficiency committee meeting of June 18th, 2025. Our committee liaison Natalie Class Kessler will provide information and instruction for the public to participate in today's meeting. While members of the public are able to attend the meetings in person, this meeting is being televised and live streamed on the city's website, and the council administration will continue to make arrangements for the public to comment using the Zoom webinar platform. Members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes. This will allow for better meeting management between the two platforms and ensure the committee is able to manage and conduct city business. Council President Pro Tem Lee. Council Member Elo Rivera. And Chair Foster. Also attending the meeting today is Charles Modica and Lisa Byrne from the office of the independent budget analysts. Please note that if you are watching via City TV Channel 24 or online, there may be a delay. Please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. And if you wish to speak on a particular item, wait for that item to be called and then raise your hand to speak by tapping the raise your hand icon. Or if you're a calling participant, press star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Natalie, for reviewing those instructions for the benefit of the public. A quorum is now present. We will now take up non-agenda public comment. The council members respect and appreciate the public's input and are fully committed to protecting every participant's free speech rights at council and committee meetings. Natalie, please proceed with non-agenda public comments. Parole 2.7 non-agenda public comment is an opportunity for members of the public to comment on items that are not on the agenda but within the subject matter jurisdiction of the committee. Each speaker will have two minutes. And we have not had any speaker slips submitted in the committee room for non-agenda public comment. So we will now move to the virtual queue. I've started the five-minute timer for all those in the virtual queue to indicate that they have non-agenda public comment. And we have six hands raised in the virtual queue. We will begin with phone number ending in 7277. Please press star six and begin. Good morning, budget and government efficiency committee and chair Foster. I am Diane Grace, a very concerned mother, grandmother, parent group member, and I follow legislation related to children. I truly appreciate that the city council understands that it should be the goal of you to fund programs and policies that enhance good mental and physical health for its citizens. So I was surprised to hear that increasing the number of pot shops might be under consideration. A marijuana storefront business plan is identical to tobacco stores and vape shops, which is to attract new and young people as customers. So they become lifetime users and entice infrequent users to use daily. This business plan is the antithesis of good physical and mental health, especially when it is really sold as marijuana stores or turbocharged ultra-high THC products, often sweet smelling and tasting, and is addictive. In the recognition of the high costs of poor physical and mental health, I hope this idea of selling more pot or cigarettes or vapes is shelved for now. Research will support you that it is a wise and caring approach to creating a healthier, happier, and more prosperous society. Thank you. Thank you. Our next speaker in the queue is Blair Beekman. Please begin. Hi. Thanks for the meeting today. Um, this is the last meeting of June before the financial year of California ends. Um, good luck that uh there can be some a little bit of fine-tuning uh of the budget in some ways that they can be negotiated a bit uh into early July. Um good luck in those efforts with what can be accomplished. Um I wanted to also offer, I guess from last night uh from this week, it's kind of been my theme. Uh, thank you again for your ADU work. Uh, I think you've organized and set up a way that's going to be an example for every city of California. What every city in California can't be doing right now.
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