San Diego Budget Review Committee Hearing on FY2023 Proposed Budget - May 4, 2022
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San Diego Budget Review Committee Hearing on FY2023 Proposed Budget – May 4, 2022
The San Diego Budget Review Committee convened on May 4, 2022, to review the Mayor's proposed Fiscal Year 2023 budget. The meeting featured presentations from the Independent Budget Analyst (IBA), the Chief Operating Officer, and several city departments, followed by public testimony and committee member questions. Key themes included the structural budget imbalance, reliance on one-time American Rescue Plan Act (ARPA) funds, infrastructure backlogs, high vacancy rates, and investments in homelessness, climate action, arts and culture, and digital equity.
Public Comments & Testimony
- General Budget (Item 1): Speakers from Climate Action Campaign, Lived Experience Advisors, Youth Will, and others urged council to prioritize CAP implementation, expand public bathrooms, fund the Office of Child and Youth Success ($100,000 for community planning), and restore arts funding to pre-pandemic levels.
- Office of Chief Operating Officer (Item 2): Multiple youth advocates (Youth Will) requested $100,000 for community-informed planning for the Office of Child and Youth Success. Other callers supported funding for homelessness prevention and senior services.
- Performance & Analytics (Item 3): Public comments focused on pay equity for contractors, tracking homeless spending, and improving customer service data.
- Homelessness Strategies (Item 4): Eight in-person speakers and virtual callers highlighted the urgency of shelter for seniors, non-congregate shelter, housing-first approaches, and the need for increased oversight. Several speakers criticized the city's reliance on one-time funding and punitive measures.
- Special Promotional Programs (Item 11): Seven in-person speakers from arts and cultural organizations (Balboa Park Cultural Partnership, Museums, Casa Familiar) requested restoration of arts funding to pre-pandemic levels ($14.2 million), citing the economic and community impact.
- Citywide Program Expenditures (Item 12): One caller supported the Energy Independence Fund study.
- Public Hearing on FY2023 Proposed Budget (Item 18): Over 30 speakers (in-person and virtual) addressed housing stability funds, youth programs (Youth Environmental Corps, menstrual equity), arts reinstatement, street repair in El Cerrito, leaded fuel at Montgomery-Gibbs Airport, library funding, and the need for a housing stability fund. Many speakers were part of the Community Budget Alliance.
Discussion Items
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IBA Review of Mayor's Proposed Budget: Charles Modica presented the IBA's analysis, noting the budget is balanced at $1.9 billion in general fund revenues and expenditures but is structurally imbalanced due to $150 million in one-time revenues (mostly ARPA) exceeding $104 million in one-time expenditures. This creates a projected $46 million ongoing gap in FY24, and a potential $115 million shortfall in FY25 when ARPA ends. Other concerns include a $4.3 billion infrastructure backlog, high vacancy rates (over 1,700 vacancies countywide), and no reserve contributions. Council members praised the IBA's thoroughness and raised questions about revenue growth and cost recovery.
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Office of the Chief Operating Officer (COO): Jay Goldstone highlighted the budget as a reflection of optimism, with investments in stormwater, climate action, homelessness, public safety, and employee compensation. He noted the addition of two grant writers in the COO's office, and positions for the Office of Immigrant Affairs and Office of Child and Youth Success. The IBA noted $350,000 in unexpended FY22 funds will roll over for child and youth programs. Council members discussed efficiency, grant writer placement, and language access policies.
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Performance & Analytics Department: Director Kirby Brady reported on the expansion of the Get It Done app (including Spanish mobile and Parks & Rec onboarding), a pilot performance coach model that improved streetlight repair efficiency by 23%, and upcoming work on short-term rental licensing, pay equity study, and customer experience program. IBA noted no revenue from marketing Get It Done to other cities. Council commended the department and discussed service level targets and the need for a street repair category in the app.
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Homelessness Strategies & Solutions: Director Hafsa Keika presented a $16.6 million general fund budget (part of $63 million total including state grants). Accomplishments include increased shelter beds, harm reduction shelter, and over 1,000 households housed. The department will assume direct management of outreach, safe parking, and family reunification from the Housing Commission. IBA noted 72% of homelessness spending relies on one-time funds, creating a potential $25 million gap in FY24. Council questioned program transitions, shelter specialization for seniors, youth, and LGBTQ+, and the need for ongoing funding.
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Office of the City Treasurer: Director Liz Correa highlighted progress on investment policy (divestment from fossil fuels), parking meter upgrades, cannabis tax audits, and STRO (short-term rental) implementation. Budget includes five positions for STRO enforcement and a program manager for delinquent accounts. Revenue from STRO licenses is anticipated at $8.1 million (one-time, biennial). Council discussed STRO revenue smoothing and parking enforcement impacts on low-income residents.
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Debt Management: Director Lakshmi Kommi reported on high credit ratings (AA from all three agencies), successful closing of $664 million in SRF loans for Pure Water, and plans for the Stormwater WIFIA loan closing in July. No material budget changes; a $150,000 reduction in reimbursable revenues was noted. Council asked about reserve contributions and credit rating risks, with director confirming no immediate risk.
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Department of Finance: Director Rolando Chavel presented a $21 million budget with the addition of six positions (two for GASB 87 compliance, two for Prop B unwinding, two for CIP support). He noted that despite a 24% increase in citywide budget and 4x increase in CIP, staffing has not kept pace. IBA confirmed the seven supplemental positions. Council discussed invoice payment timeliness and the need for continued internal service growth.
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Special Promotional Programs (TOT Fund): Vanessa Montenegro presented a $116.6 million budget, up $32.3 million from FY22, driven by TOT revenue recovery. The budget includes $2.6 million increase for arts and culture, but remains $1.5 million below FY20 pre-pandemic levels. IBA noted a technical error of $2 million in TOT revenue that may be corrected in the May Revise. Council members expressed strong support for restoring arts funding to pre-pandemic levels and pursuing the 9.52% “Penny for the Arts” goal.
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Citywide Program Expenditures: Chris Purcell outlined a $230 million budget (12.2% of general fund), including $28.4 million transfer to Infrastructure Fund, $7.4 million to Climate Equity Fund, $29.7 million for CIP, and $1.6 million to Energy Independence Fund. No reserve contribution is budgeted. Council discussed the Las Americas park-and-ride lease (lack of signage), and support for a menstrual equity pilot program.
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Office of the City Clerk: Director Liz Maland reported on accomplishments (virtual meetings, translation services in 200 languages, new records management). Budget decreased $52,000; one new program manager for archives was added. IBA noted a storekeeper position was requested but not funded. Council praised the office and discussed translation citywide efforts.
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Purchasing & Contracting: Director Claudia Barca highlighted the transfer of 19 FTE from Engineering & Capital Projects (public works contracts) to centralize procurement. Budget includes funding for bonding assistance and technical assistance programs (from disparity study), and two new positions for Equal Opportunity Contracting. IBA noted chronic vacancies (only 5 of 10 EOC positions filled) and challenges with recruitment. Council discussed bid protests and support for small business programs.
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Department of Information Technology: Director Jonathan Bankey presented a budget that funds SD Access for All ($441,000 for Wi-Fi and digital literacy), cybersecurity, public safety radio modernization, and a $500,000 SAP feasibility study. IBA noted the department requested $955,000 for digital equity but received $441,000. Council supported increasing digital equity funding to leverage state and federal funds and asked about cybersecurity risks from vacancies.
Key Outcomes
- No formal votes were taken; this was an informational hearing.
- The Mayor's May Revise is scheduled for release on May 17, 2022, to be heard by the committee on May 19.
- Council members indicated support for restoring arts and culture funding to pre-pandemic levels (at least $14.2 million), with consensus emerging for a $1.5 million increase.
- Several council members expressed intent to add funding for a housing stability fund, menstrual equity pilot, youth programs, street repairs, and unleaded fuel at Montgomery-Gibbs Airport during the final budget adoption.
- The IBA recommended council request a comprehensive list of homelessness expenditures and a digital equity action plan.
- The meeting adjourned at approximately 8:45 PM, with remaining departments (Risk Management, Economic Development, Office of Race and Equity) scheduled for later sessions.
Meeting Transcript
Good morning. Until further notice, the budget review committee meetings will be conducted pursuant to the provision provisions of California Government Code Section 54953E, added by Assembly Bill 361, which allows the city to use teleconferencing and provide the public an opportunity to address the City Council Committee via call-in option or an internet-based service option during a proclaimed state of emergency. While the public is allowed to attend the meetings in person, we encourage you to maintain six feet of social distance as well as California mass guidelines where masks are strongly recommended. In addition to being able to attend in person, this meeting is being televised and live streamed on the city's website, and the clerk and council committee liaison will continue to make arrangements for the public to comment using the Zoom webinar platform. Additionally, members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever happens first. This will allow for better meeting management between the two platforms to ensure the council is able to manage and conduct city business. We appreciate the public's cooperation. Our Deputy Clerk, Deanna Fuentes will go over the specifics of how the public can participate and give their public testimony. Thank you. Committee member Lacava. Present. Committee member Campbell. Here. Committee member Whitburn. Here. Committee member Marie Step. Here. Committee member Von Wilburn. Present. Committee member Campillo. Here. Committee member Moreno. Present. Committee member Elo Rivera. Present. And Chair Crate. Here. And before we proceed, just wanted to uh in advance thank both our clerk as well as all of the departments who are going to be coming before us over the next week, as well as our IBA for all of your efforts to ensure that we get through this process thoroughly and that all of our members are able to ask the questions to get the answers to those questions in order to deliberate on what will be a very important budget process for my colleagues. So we are going to do the five-minute time uh uh time limits for each of the members. Um if you don't need wish to speak, um feel free to uh to offer the time to uh your colleagues. Um if we do go over, we'll try to make adjustments. Excuse me. If necessary to ensure that we have the proper deliberation that we can. So just gonna try to fit in a lot in a very short period of time, but we're gonna try to give uh uh be gracious in terms of trying to get everyone the answers to their questions. So uh if you feel you need to go over, just let us know ahead of time and we'll try to work with you uh to make sure you get that uh have that time available for us. So um with that, is there any committee member, city attorney, IBA, or mayoral staff comments. Hearing none, Deputy Clerk, please proceed. Good morning. If you are in person, please complete a speaker slip located at the entrance of chambers and place it on the top of the box indicated at the speaker's lectern at the front of the room. It is the box with the blue arrow. Please place it on top. Please do so in a timely manner to ensure proper meeting management. In-person testimony will conclude before virtual testimony begins. Members of the public can also join the webinar by computer, tablet, or smartphone by accessing the link which is listed online in the preamble language of the agenda on the city's web page. This information is also available on the agenda and will appear on the screen during the public comment period for each agenda item. As noted by the committee chair, the members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever happens first. Please note that if you are watching via City TV 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.
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