San Diego Budget and Government Efficiency Committee Meeting - October 21, 2026

The Budget and Government Efficiency Committee met on Wednesday, October 21, 2026, with Chair Henry L. Foster III presiding. The committee reviewed the FY 2026 year-end financial performance report, approved a measure to begin rescinding the city's ALPR use policy, adopted a cannabis delivery service permit fee, and renewed the city treasurer's investment authority. All action items passed. The public participated in person and by Zoom; the online live stream was not working.

Consent Calendar

• Item 1, approval of committee minutes from September 23, 2026, was approved unanimously, 4-0. During public comment, one speaker raised the $7 million "bootworld" contract, another said the minutes did not fully capture her previous comments about diesel shortages and El Niño, and one virtual speaker reported that agenda document links on the city website were not working.

Public Comments & Testimony

• In non-agenda public comment, speakers raised a wide range of topics. Blair Beekman emphasized community accountability in trash and RFID technology. Audra questioned why the city focuses on vehicle surveillance while broader tracking of people remains unaddressed. Anthony Ralphs thanked council members for raising SDPD body-worn camera compliance concerns and urged greater accountability for the police budget and technology requests. Other speakers commented on youth vaping prevention, cannabis tax underperformance, police overtime, vape shops near schools, and infrastructure maintenance. One speaker criticized the committee for starting late.

Discussion Item: FY 2026 Year-End Financial Performance Report (Item 5)

• Department of Finance staff presented the unaudited year-end results. Revenues were expected to finish $4.1 million (0.2%) above third-quarter projections; expenditures were expected to finish $10.5 million (0.5%) above; and net projected activity decreased by $6.4 million. The projected available fund balance moved from a positive $1.7 million to a negative $4.7 million, requiring a $4.7 million draw from the General Fund Stability Reserve to balance FY 2026. After the draw, combined general fund emergency and stability reserves are expected to total $202.4 million, or 10.9% of operating revenues, below the 14.1% reserve policy target.
• The report identified a $7.4 million delay in Cal OES reimbursements for the January 2024 storms, now expected in FY 2027. Staff said reimbursements will first replenish the stability reserve, and any remaining balance could support unanticipated expenditures.
• The IBA noted this was the first general fund reserve draw in recent memory, that risk management reserves ended about $21 million below adopted budget and nearly $50 million below their combined policy targets, and that one-time budget mitigation options are increasingly limited.
• In discussion, Pro Tem Lee asked about revenue trends; staff said property tax growth is softening to about 3% while sales tax is rebounding. Vice Chair Moreno expressed disappointment at the reserve draw and stressed the importance of rebuilding reserves toward the 16% target. Staff said updated reserve policy proposals are expected next month along with the five-year financial outlook. Chair Foster requested a follow-up on unbudgeted positions. This was an information item; no vote was taken.

Discussion Item: Rescind ALPR Use Policy (Item 2)

• Tiffany Harrison, Deputy Chief of Staff for Council District 4, presented the request for the City Attorney to work with Councilmember Foster's office to rescind the ALPR use policy and amend the TRUST ordinance to prohibit ALPR technology. She reviewed the history of the TRUST ordinance, the 2023 Flock/Ubiquia contract, the June 2025 disclosure that outside agencies accessed San Diego's ALPR data, and national examples of misuse.
• The City Attorney's office advised that changes to technology use policies may trigger collective bargaining obligations under the Meyers-Milias-Brown Act and recommended a labor relations assessment before council consideration.
• Dozens of public speakers testified, overwhelmingly in support of ending ALPR/Flock. Speakers cited privacy violations, risks to immigrant communities, false arrests, racial disparities, and the need to redirect the roughly $2 million annual contract to community services. Many asked the committee to extend the prohibition to Ubiquia, smart streetlights, and future surveillance technologies, and some urged building a veto-proof supermajority.
• SDPD answered questions remotely. The department said it does not track misread rates, that officers must visually confirm a plate and verify it through a records check before a stop, that the "other" search category has been removed, and that weekly audits are conducted. Councilmember Ilo Rivera pressed on a community relations officer email urging residents to oppose cancellation, called it advocacy rather than information, and criticized the absence of SDPD leadership in the room. He also noted the 2024 surveillance report showed data shared with Homeland Security Investigations and CBP ten times, though SDPD said those were not immigration enforcement cases.
• Chair Foster made the motion, saying the action was about safeguarding fundamental rights and fostering trust, and noted that the Flock contract was negotiated by a then-SDPD captain who later became a Flock employee.
• The motion passed 4-0. It directs the City Attorney to work with Councilmember Foster's office, the IBA, and purchasing/contracting to prepare a resolution rescinding the ALPR use policy and an ordinance amendment to prohibit ALPR technology. The City Attorney confirmed both the resolution and ordinance are subject to mayoral veto, and that once the policy is rescinded, use of the technology must cease.

Discussion Item: Cannabis Delivery Service Permit Fee (Item 3)

• Ricardo Ramos of the City Treasurer's Office proposed a $51 annual cannabis delivery service permit fee for out-of-town businesses delivering into San Diego, effective January 1, 2027. The fee covers application processing and registry maintenance but excludes enforcement costs because of limited enforcement capacity. The ordinance includes a private right of action with penalties split 65% to city enforcement and 35% to plaintiffs.
• Public comment was mixed. Phil Rath, executive director of UMMC, a trade association of city-permitted cannabis retailers, expressed support, saying permitted retailers pay taxes and follow labor laws while unpermitted outside delivery services do not. Other speakers questioned whether $51 covers actual costs, argued the city should not rely on private lawsuits, opposed another cannabis fee, or suggested banning deliveries if enforcement is not feasible.
• The committee approved the fee and directed the Department of Finance to amend the user fee rate book by a 3-0 vote, with Vice Chair Moreno absent.

Discussion Item: City Treasurer's Investment Policy and Delegation of Authority (Item 4)

• The City Treasurer's office requested renewal of the authority to invest city funds for January 1 through December 31, 2027, and presented annual investment policy updates. As of September 30, 2026, the pooled investment fund had a market value of $2.23 billion and an annualized yield of 4.05%. FY 2026 investment income was $93.7 million, the second-highest annual total on record.
• Proposed policy changes were administrative: adding mandatory investment officer training, electronic Form 700 filing, removing 2031 sunset clauses on negative-rate securities and commercial paper limits, extending commercial paper maximum maturity from 270 to 397 days, and clarifying pool investment language.
• Public comment was minimal. Councilmember Ilo Rivera asked about screening out investments in private prisons and companies profiting from immigration detention, similar to the city's earlier fossil fuel divestment. Staff confirmed the city does not currently invest in CoreCivic or GEO Group and agreed to work with the IBA and Rivera's office to bring options to council.
• The committee approved the investment policy and delegation of authority by a 3-0 vote, with Vice Chair Moreno absent.

Key Outcomes

• Consent calendar approved 4-0.
• Item 5 was received as an information item; staff committed to providing a supplemental positions update and a Cal OES update in the first quarter budget monitoring report.
• Item 2 passed 4-0, directing preparation of a resolution to rescind the ALPR use policy and a TRUST ordinance amendment to prohibit ALPR technology.
• Item 3 passed 3-0, adopting a $51 cannabis delivery service permit fee effective January 1, 2027.
• Item 4 passed 3-0, renewing the investment delegation through December 31, 2027, approving the 2027 investment policy updates, and beginning work on socially responsible investment options.
• The next regular meeting was scheduled for Wednesday, November 18, 2026, at 9:00 a.m.