San Diego Budget Review Committee Meeting – May 5, 2017
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San Diego Budget Review Committee Meeting – May 5, 2017
This meeting of the Budget Review Committee (chaired by Council President Cole, with a quorum of Council Members Ward, Kercy, Alvarez, and Gomez) convened on Friday, May 5, 2017, to review the Fiscal Year 2018 proposed budgets for several city departments and programs. Presentations covered Risk Management, Financial Management, Performance & Analytics, Citywide Program Expenditures, and the Assistant Chief Operating Officer’s office (including ADA compliance, corporate partnerships, and special events/filming). The Independent Budget Analyst (IBA) provided comments on each item, and public testimony was heard on three items.
Public Comments & Testimony
- Martha Welch (opposition) – speaking on the Financial Management item, she criticized the lack of public access to physical budget documents, stating that online availability is insufficient and that the city should make printed reports available in libraries.
- Alexandra Brenter (Downtown San Diego Partnership, in favor) – supported the $6.5 million citywide elections budget, particularly the $5 million for a November 2017 special election to finance convention center expansion, homeless services, and road repair via a TOT measure. She highlighted that homelessness in downtown is up 27% and that the measure would protect tourism revenue.
- Wayne Landon (Paralyzed Veterans of America, Chair of the Accessibility Advisory Board, in favor) – thanked the council for continued funding for ADA compliance and requested ongoing support to complete transition plan projects and address complaints.
Discussion Items
- Risk Management – Director Julio Canizal presented the FY18 proposed budget (an internal service fund). Key adjustments: net addition of $125,000 for staffing realignment; addition of one Information Systems Analyst III and $100,000 for IT upgrades; conversion of one claims representative from hourly to full-time; reduction of one Benefit Representative (with reclassification of two others), one clerical position, and one Safety Representative (reducing ergonomic assessments from 840/year to a priority-based system). Reserves: public liability target 47% (3.1% general fund contribution); workers’ comp reserve goal reduced to 12% (excess reserves used to fund operations); long-term disability reserve at 100% target (excess used for FY18 expenses). IBA noted that $250,000 for workers’ comp temporary staffing was reclassified from one-time to ongoing. Council Members Alvarez and Gomez asked about position eliminations and hiring timelines; Doug Edwards (Personnel) confirmed 22 eligible candidates for a workers’ comp claims rep vacancy.
- Financial Management – Director Tracy McCraner reported a $4.3 million budget with reductions of 3.5% to help address the FY18 deficit (reducing overtime by $25,000, professional services, and leaving one vacant analyst position unfilled). Accomplishments included streamlining CIP reporting (saving 450 staff hours and reallocating $115 million), improving transparency through budget.sandiego.gov, and updating the reserve policy. IBA noted no programmatic additions and mentioned ongoing discussions on a zero-based budgeting (ZBB) policy, recommending that Financial Management report on capacity to support ZBB if adopted. Council Member Alvarez asked about revenue reimbursement and the elimination of the budget analyst role.
- Performance & Analytics – Director Almus Udriss and Program Manager Maureen Hugar presented. FY18 budget of $2.8 million (15 FTEs) with $130,000 in reductions (4.4% of operating budget). Accomplishments: first city-owned data portal, 40% reduction in 911 dispatch wait times, employee survey (over 4,500 responses), Get It Done app with 20,000 downloads, and national awards. IBA recommended that the department provide an updated 311 implementation roadmap with scope and funding options. Council members expressed strong support for the Get It Done app but noted constituent complaints about non-responses from some departments (e.g., Environmental Services). Discussion focused on back-end integration challenges and the need for a phased approach. Council Member Alvarez reiterated the council’s previous request (from FY17 budget) for a third-party exit interview program for police officers; the department estimated $21,000/year but suggested the employee survey already provides useful data.
- Citywide Program Expenditures – Deputy Director Matt Vespie presented the $140 million proposed budget (10% of general fund). Key increases: $30.6 million from FY17, driven by transfers to the infrastructure fund, 101 Ash Street lease costs, and reserve contributions (general fund 15% target, public liability 47%). Reductions included $250,000 in special consulting. IBA noted uncertainty about election costs (special election in Nov 2017 and primary June 2018). City Clerk Elizabeth Maland discussed electronic publishing options to reduce the $5 million estimate for a single special election; costs could double if Soccer City initiative (625 pages) is added and printed. Council members questioned animal services contract (10% increase due to county’s six-day shelter operation), commercial paper program ($500,000), and charging special election costs to other entities.
- Assistant Chief Operating Officer (including ADA, Special Events & Filming) – ACOO Stacey Lometico presented three offices. Office of ADA: budget flat (12 FTEs), with a shift in capital improvement project management to asset departments. All 212 projects from the 1997 transition plan expected to be complete this FY; 14 of 182 phase-two projects are complete, 30 underway. IBA recommended annual or biannual updates to council. Special Events & Filming: $50,000 reduction in non-personnel (marketing). The filming program (one FTE) handled 700 permits; San Diego ranked in top 15 big cities for film. Corporate partnerships: $350,000 in unrestricted revenue budgeted, with a health/wellness partnership for parks and libraries expected soon. Council Member Alvarez asked about a position transfer to the COO’s office for a housing solutions advisor.
Key Outcomes
- The committee voted unanimously to trail the communications item to Wednesday, May 10, 2017, at 9:30 AM.
- No formal votes were taken on any of the budgets; the meeting was a review in advance of the mayor’s budget revise and continued budget deliberations scheduled for Monday, May 8.
- Council members indicated interest in pursuing electronic publication for the special election to reduce costs and in exploring phased funding for the 311/Get It Done expansion.
Meeting Transcript
Good morning, everyone. Welcome to uh the Friday meeting of the budget review committee. Uh we now have a quorum consisting of Council Member Ward, Council President Pro Tem Kercy, Council Members Alvarez and Gomez, and myself, um, the chair and uh council president Cole. Uh this is a continuation of an earlier uh council meeting, so we will start by having our clerk introduce the next item. Yes, our first presentation this morning is risk management. We have Julio Canizal, Director of Risk Management listed as our presenter, and we have no public speakers on this item. I understand you'd like five minutes for your presentation. Yes, I do. Okay. Good morning, Chair Committee Bree and Budget Review Committee members. Uh, my name is Julio Canisal, risk management director, and to my left is Stella Montoya, Deputy Director in the Risk Management Department. We're here to present the fiscal year 2018 proposed budget for the risk for the risk management department. The risk management department is an internal service fund and provides a citywide function. The department manages the city's self-insured workers' compensation program, the public liability program, including claims against the city, insurance and loss recovery. The department also administers the employee health and safety programs, employee benefits component contracts, employee savings plans, and the long-term disability plan. The department's mission is shown on the slide. Some of the department's accomplishments in fiscal year 2016 include a processing, 1,500 new workers' compensation claims, about 2100 new public liability claims, 14,000 dental medical and orbition reimbursements from the employees' health care spending accounts, enrolling 9,700 employees in the flexible benefits program, and training about 1,300 employees in safety-related topics such as driving city, commercial vehicles, and supervisors academy. Claims against the city, which states that on a monthly basis, the department will provide council with a report on the city's claim volume and expense experience. Some of the significant adjustments included in the fiscal year 2018 proposed budget include the net addition of 125,000. The risk management department conducted a department-wide assessment of staffing requirements to effectively and efficiently perform the tasks required for the workers' compensation and public liability functions, as well as the city employees' flexible and savings plans. Based on this review, it was determined that realignment of certain positions were needed to ensure that staff have the appropriate knowledge, skills, and ability to perform the job duties of for these programs. The addition of one information system analyst three and 100,000 to support information technology projects planned over the next three to five years. This includes the upgrades of the workers' compensation and public liability claims management systems and the consolidation of these systems into a single platform. The conversion of one claims representative hourly position to a full-time benefit position and 26,000 for the public liability program. This addition will allow for a decrease in the number of claims handled per position and keep the division on track in meeting deadlines mandated by the California government code. The proposed reductions include the net reduction of one benefit representative to position and 72,000 to align position classifications with the services provided by the employee benefits division. No impact to services is expected from this reduction. The net reduction of one clerical system to and 85,000 from the safety and environmental health division. The net reduction of one safety representative two from the safety and environmental health division. This will reduce the staffing for the city's economic evaluation program from two full-time equivalent positions to one position. The city's reserve policy describes the risk management reserves requirements for the public liability, workers' compensation, and non-turn disability funds. For the public liability, the policy states that the city will have a reserve target of 47% of the value of the outstanding public liability claims in fiscal year 18, with ultimate goal of 50% by fiscal year 2019. The proposed budget includes 3.1 million contribution from the general fund to meet the 40%, 47% of 36.5 million reserve target. For the workers' compensation, the reserve goal was reduced from 25% to 12% of the value of the outstanding claims, which resulted in excess reserves of 24.1 million. Excess reserves have been used to fully fund the general fund reserve and public liability reserve to policy target levels and to partially support worker compensation operating expenses in fiscal year 18. Remaining excess reserves, as described in the budget document, will be used through fiscal year 2020 to support workers' compensation operating expenses. For the long-term disability, the policy states that the city will have a reserve target of 100% of the outstanding value of the claims, or 11 million. The reserve target has been reached, and no contribution is budgeted in fiscal year 18. Excess reserves of 2.1 million will be used to support the LTD operating expenses in fiscal year 18, and 4 million is anticipated to support funding for the debt and disability benefit that is being negotiated with the city's recognized employee organizations. That concludes my presentation, and we're available to answer any questions. Thank you. Are there any comments from the IBA, Ms. Byrne? Yes, thank you, Chair Bree. Lisa Byrne from the Office of the IBA. I just have uh a few additional comments to make. Our discussion of risk management is on pages 152, 151 through 152 of the IBA's budget review. And the risk management fund is an internal service fund which needs sufficient revenues to cover expenditures for fiscal year 18. Proposed expenditures of 11 million are about 500,000 higher than proposed revenues. However, expenditures that exceed revenues are anticipated to be covered with fund balance.
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