Budget Review Committee Meeting - May 11, 2021: Convention Center, Housing Commission, and Retirement System Budgets
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Budget Review Committee Meeting - May 11, 2021
The Budget Review Committee of the San Diego City Council met virtually on May 11, 2021, to review the proposed fiscal year 2022 budgets for the San Diego Convention Center Corporation, the San Diego Housing Commission, and the San Diego City Employees Retirement System (SDCERS). The meeting was held via Zoom due to the COVID-19 pandemic, with council members and staff participating remotely. Chair Kate presided. The committee heard presentations from each agency, reviewed reports from the Independent Budget Analyst (IBA), and received public testimony.
Public Comments & Testimony
- SDCERS Public Comment: Michelle Krug expressed frustration with the lack of accessibility for individuals without computer access during the pandemic, stating she did not receive a call back after multiple attempts. SDCERS CEO Greg Rodemaker apologized and noted that a remote call center has since been implemented.
- No public comments were submitted for the Convention Center or Housing Commission items.
San Diego Convention Center Corporation Budget Review
- Presentation: CEO Rip Rippetoe and CFO Martin Maddox presented the corporation's budget. Due to the COVID-19 pandemic, the convention center operated as a homeless shelter (April 2020 – March 2021) and then as a federal emergency intake site for unaccompanied children (starting March 26, 2021). The budget assumes a reopening for events in October 2021, with attendance at 25% of pre-pandemic levels ramping up to 80% by year-end. The corporation faces a total FY22 loss of $16.5 million, including a $13.6 million operating deficit. It plans to exhaust its $4.2 million reserve and requests a $10.2 million operating subsidy from the city. Additional revenue may come from a $2 million PPP loan forgiveness and a $90,000 grant. The corporation outlined a 10-year capital plan with over $74 million in needs.
- IBA Comments: Deputy Director Jeff Kawar reported on the reserve policy, the need for a long-term capital financing plan, and recent developments (emergency intake site, earlier reopening). He recommended allowing the corporation to use any net revenue from the intake site to rebuild reserves or address capital needs. He also noted the city's ongoing annual contributions of $13.3 million (debt service and dewatering) and the potential for Measure C funds.
- Council Discussion: Councilmembers thanked the staff for their pandemic response. Councilmember LaCava questioned the need for the full $10.2 million and the monitoring plan. Council President Pro Tem Whitburn asked whether the full subsidy was necessary given the earlier reopening; CFO Maddox affirmed the need due to cash flow challenges, repayment delays from the federal intake site, and a $1.2 million Ibank debt payment due in July. Councilmember Montgomery Steppe asked about funding for Operation Shelter to Home ($20.8 million from the city). Councilmember Von Wilpert inquired about employee recall difficulties. Councilmember Campillo asked about rising insurance costs. Councilmember Moreno questioned post-pandemic demand and how the city can support the center. Councilmember Elo Rivera asked about the possibility of a loan versus a grant; the IBA indicated a loan would be difficult to repay. Chair Kate asked about capital and repair maintenance spending.
- Key Outcomes: The committee reviewed the budget; no vote was taken. It was noted that the corporation will provide monthly cash flow projections to city finance. The IBA recommended a mid-year update.
San Diego Housing Commission Budget Review
- Presentation: Deputy CEO Jeff Davis, EVP Suket Dial, and CFO Tracy McDermott presented a proposed FY22 budget of $585 million, the largest in history. The increase primarily reflects federal, state, and city funds for COVID-19 relief programs, including the Housing Stability Assistance Program ($92 million). The budget also includes over $120 million for homelessness programs, $20 million for property acquisitions for permanent supportive housing, $8 million for rehabilitation of existing units, $16.6 million to preserve naturally occurring affordable housing, and $7.8 million for the homeownership program (up $5 million). The Housing Commission anticipates administering 470 new emergency housing vouchers and potential additional funds from the American Rescue Plan Act.
- IBA Comments: Analyst Jillian Cassidy noted that $64 million in rent relief funds will carry over from FY21, and the city will receive an additional $54 million for rent relief. She highlighted the homeownership increase and the redeployment of unspent NOFA funds.
- Council Discussion: Councilmember LaCava proposed creating a "Housing Day" for a comprehensive needs assessment. Councilmember Montgomery Steppe requested a briefing on allegations of voucher discrimination from the NAACP. Councilmember Von Wilpert asked about governance, fund balances (nearly $200 million unspent), and the serial inebriate program funding. Councilmember Campillo asked about first-time homebuyer assistance (expected to help up to 100 households). Councilmember Moreno expressed concern about slow distribution of rental relief (only $1.5 million of ~$90 million disbursed) and questioned application processing times. He also asked about internal controls for property acquisition. Councilmember Elo Rivera asked about service provider capacity to utilize non-congregate shelter funding and noted frustration that funds were available but staffing limited. Chair Kate noted the additional state rent relief announced by the governor.
- Key Outcomes: The commission's budget will be presented to the full council for approval on June 14, 2021. Several councilmembers requested additional briefings. The committee discussed the need to accelerate rent relief distribution and build provider capacity.
San Diego City Employees Retirement System (SDCERS) Budget Review
- Presentation: CEO Greg Rodemaker and Controller Ted Lasalvia presented an administrative budget of $14.4 million for FY22, with 51 full-time equivalent employees (an increase of 3 to support the pending reopening of the pension plan to new city employees). SDCERS manages a $10 billion trust fund and serves over 20,000 members. The budget is approved by the SDCERS Board and does not require council approval. Key costs include salaries and benefits (57%), general operations ($3.4 million), IT, and legal fees ($365,000). Investment expenses for FY20 were $47.3 million, a $8.2 million increase from FY19, driven by private equity and opportunistic strategies.
- IBA Comments: Analyst Lisa Byrne noted the three additional FTEs related to Proposition B unwinding and that investment fees increased as a percentage of assets in certain categories.
- Council Discussion: Councilmember LaCava and Council President Campbell had no questions. Council President Pro Tem Whitburn emphasized the need for accessibility for an aging population and commended the new call center. Councilmember Von Wilpert asked about readiness for reopening the pension plan; Rodemaker confirmed they are prepared. Councilmember Elo Rivera asked if additional staff might be needed; Rodemaker responded that the three new positions should suffice for now.
- Key Outcomes: The committee received the report; no further action required. SDCERS apologized for past accessibility issues and noted improvements.
Meeting Transcript
Chair, please proceed. Good morning. Per executive order 29-20, which suspends certain requirements of the Brown Act. The council members will be participating via Zoom, and no members of the public will be in attendance at the meetings in the interest of public health and safety. In addition, this meeting is being televised and live streamed on the city's website, and the clerk and council committee liaison have made arrangements for the public to comment using the Zoom webinar platform. We appreciate the public's cooperation. The clerk will go over the specifics of how to join the webinar and will give details on how the public can offer their public testimony. I will now call the budget review committee meeting of Tuesday, May 11th, 2021 to order. Clerk, please call the roll. Councilmember Lacava. Present. Council President Campbell. Here. Council President Pro Term Whipur. Here. Councilmember Montgomery Step. Here. Councilmember Von Wilpert. Present. Councilmember Campillo. Here. Councilmember Moreno. Councilmember Ilo Rivera. Present. And Committee Chair Kate. Here. Each council member is attorney is attending virtually. Also attending the virtual meeting is Chief Deputy City Attorney Kevin Reich, Independent Budget Analyst Andrea Tevlin, Director of Policy Jessica Lawrence from the Mayor's Office, and myself, George Biagi, Deputy Director of Legislative Services in the Office of the City Clerk. For purposes of this meeting, written comments submitted using the public comment form prior to the start of the meeting have been distributed to the committee and posted online. All written submissions received after the start of the meeting, excuse me, will be made part of the permanent record. The public may view the meeting on public television on City TV Channel 24 for Cox Communication and Time Warner Cable or Channel 99 for ATT Uverse, or view the meeting online by going to the City Council Committee's homepage at San Diego.gov and selecting the City TV Live Webcast White button on the right hand side of the page. The committee meetings will be held virtually using the Zoom webinar platform. Members of the public can offer public comment by accessing the Zoom webinar online using a desktop computer, laptop, tablet, or smartphone, or by calling into the meeting using a smartphone, cellular phone, or landline. The link to join the committee meeting webinar by computer, tablet, or smartphone is listed online in the preamble language of the agenda, which can be found on the City Council Committee's webpage. To join the Zoom webinar by telephone, you may dial 1 669 254 5252. When prompted, input webinar ID 160 417 1840 pound. This information is also available on the agenda and will appear on the screen during the public comment period for each item. When I introduce the item you would like to comment on, you will raise your hand by either tapping the raise your hand button on your computer, tablet, or smartphone, or by pressing star nine on your phone. You will be taken in the in the order in which you raise your hand. You may only speak once on a particular item. When I indicate it is your turn to speak, I will call you by your name as it appears on the Zoom webinar attendee list, or I will read out the last four digits of your phone number if you've called into the meeting. That is how you will know it is your turn to speak. If you join the webinar by computer, tablet, or smartphone, you will receive a pop-up notice to select to unmute your device. If you've called into the meeting by cell phone or landline, press star six on your phone to unmute yourself. We will review these instructions briefly again when the public comment period on an item is open. Please wait until the item you wish to speak to has been called before raising your hand to speak. If you raise your hand during a non-comment period, your hand will be lowered. When you are announced as the next speaker, please unmute yourself and offer your comments. Also, please mute the volume on your TV or computer before you begin to speak. In addition, this is not a question and answer period.
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