San Diego Budget Review Committee Hearing on Capital Improvement Program (CIP) Budget – May 2, 2019

The Budget Review Committee of the San Diego City Council convened on May 2, 2019, to review the proposed Fiscal Year 2020 Capital Improvement Program (CIP) budget, the largest in city history at $715.8 million. The meeting included presentations from the Infrastructure and Public Works Branch, an analysis by the Independent Budget Analyst (IBA), public testimony, and committee member questions and comments. No formal votes were taken; the meeting served as a discussion and review session.

Public Comments & Testimony

• Nicole Burgess (Opposition): Expressed opposition to the $80 million allocated for resurfacing 430 miles of streets, arguing that the fast pace misses opportunities to improve bike and pedestrian safety. She noted that previously, with 100 miles of streets, 50% were improved for bikes, but at 430 miles, only an estimated 8% (35 miles) would include bike improvements. She urged the committee to consider safer street designs.
• Peter Kamiski (In Favor – Balboa Park Cultural Partnership): Supported the mayor's budget and emphasized the need to keep the $9.4 million capital fund designated for Balboa Park within the park for reinvestment. He highlighted that cultural partners have invested $18 million in city buildings over nine years, with $200 million expected in the next nine years, and called for prioritizing capital reinvestment in structures and public restrooms.
• Clarissa Falcon (In Favor – Biomed Realty): Spoke on behalf of Biomed Realty and Biocom San Diego, supporting the CIP but requesting prioritization of storm drain channel maintenance at Roselle Street and Estuary Way in Sorrento Valley to address flooding and water quality issues at Los Peñasquitos Lagoon. She noted a holistic restoration project is in development with TSW staff.
• Andrea Schlager (In Favor): Supported the CIP but urged that staff be empowered to complete feasibility studies and break ground on projects like the Ocean Beach lifeguard station, which has been in study for over a year. She cited increased cliff rescues and inadequate facilities.

Discussion Items

• Presentation by Infrastructure and Public Works Branch: Johnny Perkins (Deputy COO) introduced the branch, noting it includes nearly 4,000 staff across departments. James Nagelfort (City Engineer) presented the State of the CIP, covering the first six months of FY2019, including $231 million in expenditures, progress on Pure Water Phase One (13 contracts, $1.3 billion), West Mission Bay Bridge construction, and 118 miles of street resurfacing completed. He noted challenges: vacancies, staff training, and the difficulty of retaining talent in a booming economy. Myrna Dayton presented the five-year CIP outlook (FY2020-2024), showing $5.6 billion in projected needs versus $3.7 billion in available funding, a gap of $1.8 billion concentrated in general fund assets. Karen McGriff (Finance) presented the FY2020 proposed CIP budget of $715.8 million, with 54% for pure water projects, 17% for water distribution, 11% for wastewater, 9.6% for city buildings, 5% for transportation, and 2% for parks. She noted an additional $294.3 million in anticipated funds (DIF, bonds, grants) to be allocated during the year.
• IBA Comments: Jillian Cassif (Office of the Independent Budget Analyst) reported that the proposed CIP is a 28% increase over FY2019 adopted budget, but noted $19 million less funding for general fund capital projects due to diversions to balance the budget. She highlighted that the city continues to spend down $88.5 million in commercial paper funding, with $71 million unencumbered. Sidewalk funding: $1 million for ADA compliance and $2.4 million for new sidewalks, estimated to produce about 2.5 miles. No new funding for sidewalk repair backlog ($94 million). She also noted unfunded projects including street light circuits, storm drain pipelining, and court repairs.
• Committee Member Q&A: Councilmembers raised several issues:
  • Sidewalk costs: Councilmember Sherman questioned the cost of $2.4 million for roughly a mile of new sidewalks. TSW Director Chris McFadden explained costs vary based on environmental factors, with the estimate being a worst-case scenario; the department identified projects that would yield closer to 2.5 miles.
  • Mission Bay Golf Course Clubhouse: Councilmember Sherman questioned the $3 million demolition cost; Deputy Director Akron Passier clarified it includes building a new clubhouse and surrounding improvements.
  • Infrastructure fund expenditures: Councilmember Moreno noted only $2.6 million of the $17 million infrastructure fund had been spent by December 2018. Staff explained that payments lag due to construction milestones and priority given to grant-funded projects with expiration dates.
  • Commercial paper and tobacco bonds: Moreno asked about slow expenditure; staff said funds became available at the start of FY2019 and are now allocated to projects, with ramp-up expected.
  • Street resurfacing and bike infrastructure: Councilmember Gomez and Ward emphasized the need to link street repaving with bike and pedestrian improvements. TSW Director McFadden stated that for the 430 miles of resurfacing, about 35-40 miles include bike improvements, down from 50 miles last year due to focus on downtown mobility plan. The downtown mobility plan Phase 2 is set to be advertised in June 2019.
  • Sidewalk implementation: Councilmember Gomez requested a list of identified sidewalk projects; TSW agreed to provide it.
  • Balboa Park capital fund: Councilmember Ward and others voiced support for keeping the $9.4 million fund in the park for reinvestment, noting the need for restroom upgrades.
  • Ocean Beach projects: Councilmember Campbell requested funding for the OB branch library annex and a combined lifeguard station/police substation. Deputy Director Mark Nasser said the lifeguard feasibility study is finalizing and will consider office space.
  • Mission Bay leasees: Campbell asked about using Mission Bay Park Improvement Fund for lessee concerns. Parks Assistant Director Andy Field said they would work with her office and noted a future allocation action in fall.
  • Pipeline replacement: Councilmember Kercy asked about water main replacement targets; staff confirmed they will meet the 175-mile target over five years despite delays combining with Pure Water contracts.
  • Chollas Lake improvements: Councilmember Montgomery noted progress on the comfort station and electricity, with construction anticipated in FY2021.
  • Streamview Drive: Montgomery asked about Phase 2 design; deputy director said a consultant is being selected for remaining design.
  • Gas tax funding: Montgomery inquired about $4 million in gas tax funding; staff clarified that total annual gas tax revenue is about $30 million, with the $4 million being the portion allocated to CIP.
  • Consultant dependence: Councilmember Bry noted concerns about reliance on consultants, referencing high-speed rail issues, and emphasized the need for in-house expertise.
  • La Jolla projects: Bry submitted written questions about El Camino Real widening, SR 56 expansion, and North Torrey Pines Road Bridge.

Key Outcomes

• No formal votes or decisions were made during this hearing; it was a review session. The committee will continue discussions in subsequent hearings.
• Requests for information: Staff agreed to provide lists of sidewalk projects (Gomez), details on gas tax revenue and older road conditions (Montgomery), and written responses to questions on La Jolla projects (Bry).
• Future actions: The committee noted that additional funding from anticipated sources ($294.3 million) will be allocated through future council actions, including a potential mid-year review. The Mission Bay Park Improvement Fund allocation will be revisited in fall 2019.
• Notable discussion points: The structural budget deficit and the need for more revenue to address CIP backlog were highlighted by Councilmember Moreno. The importance of linking street repaving with bike and pedestrian safety was stressed by multiple members.
• Break: The meeting was adjourned for a break until 2:00 PM, with the afternoon session to continue with operational budgets of infrastructure departments.