San Diego City Budget Review Committee Meeting: FY2026 Budget Hearings for Homelessness, Housing, Pensions, and Convention Center – May 8, 2025
San Diego City Budget Review Committee Meeting: FY2026 Budget Hearings for Homelessness, Housing, Pensions, and Convention Center – May 8, 2025
On May 8, 2025, the San Diego City Council's Budget Review Committee held hearings on the proposed FY2026 budgets for the Homelessness Strategies and Solutions Department (HSSD), the San Diego Housing Commission (SDHC), the San Diego City Employees' Retirement System (SDCERS), and the San Diego Convention Center Corporation (SDCCC). The meeting began at 9:00 AM, recessed around noon, and reconvened at 2:00 PM. No formal votes were taken, as these were informational hearings; council members discussed potential amendments and expressed positions on proposed cuts.
Public Comments & Testimony
- Morning session (Subitems J & K): Multiple public speakers testified. Speakers from the Downtown San Diego Partnership, Father Joe's Villages, Legal Aid Society, Jewish Family Service, and Lived Experience Advisors expressed support for continued funding of shelter, prevention, and outreach programs, sharing success stories. Some speakers urged the city to hold the county accountable and to seek philanthropic and corporate support. A few speakers criticized federal policies and called for a rethinking of shelter strategies. One speaker with lived homelessness experience emphasized the importance of treating homeless individuals as people.
- Afternoon session (Subitems L & M): Public comments were brief. One speaker praised SDCERS's values and IT focus, while another stressed the need for tech accountability. For the convention center, speakers (including board members) urged immediate funding for critical repairs, noting safety and economic risks. A speaker from the building trades council highlighted worker safety concerns. Another speaker advocated for a new convention center rather than continued patching.
Discussion Items
Subitem J: Homelessness Strategies and Solutions (HSSD)
- Presentation: Director Sarah Jarman presented the HSSD FY2026 budget, which shows a $689,000 decrease from FY2025. The budget includes $33.8 million in Measure C TOT revenue, $3.5 million for housing instability prevention, $750,000 for portable restrooms, and $527,000 for the day center. Major reductions include the Rosecrans shelter closure ($4.7 million), Caltrans outreach program ($620,000), and $3.6 million in shelter operational efficiencies. HSSD met its 5% general fund target ($4.6 million) and achieved $13 million in total cuts across all funding sources without service level impacts.
- IBA Comments: Amy Lee noted that council only approves general fund allocations; other funds come separately. Key issues: Rosecrans shelter closure (net loss of ~40 beds), reduction of public restrooms from 16 to 8, reconfiguration of homelessness response center, and need for performance indicators beyond program capacity.
- Council Questions: Councilmembers praised HSSD's work but expressed concern over the Rosecrans closure (Councilmember Campbell proposed funding $2 million for a six-month extension), the 32-bed interim family/women's shelter at risk, and the need for diversion resources. Councilmember Lee highlighted the ongoing nature of homelessness prevention programs (HIP and eviction prevention). Councilmember Ilo Rivera stressed the importance of lived-experience input and asked about alignment with the Community Action Plan. Councilmember Moreno criticized the Caltrans outreach program (98.3% remained homeless) and asked about KPIs; HSSD agreed to add permanent housing placements as a metric.
- Key Outcomes: No motions; council members indicated intent to propose amendments in the May revise to restore funding for Rosecrans and the women's shelter. HSSD will present a Community Action Plan update on May 20, 2025.
Subitem K: San Diego Housing Commission (SDHC)
- Presentation: CEO Lisa Jones and CFO Souquette Dial presented a $715.6 million budget. Federal funds (68%) are uncertain due to delayed HUD notifications and proposed federal cuts. SDHC faces a $17.8 million gap in rental assistance, affecting ~1,000 households, and will draw $25 million from HUD-held reserves, leaving $13.3 million. Emergency Housing Vouchers (EHV) for 460 households (mostly vulnerable families) may end by early summer 2026. Project-based voucher commitments add $11.5 million in FY26 and $17.7 million by FY28. The budget includes $22.8 million for affordable housing gap financing and a potential $45.4 million Home Key Plus acquisition. Reserves for operations and property maintenance are nearly depleted; SDHC is exploring cost reductions including possible furloughs and non-frontline layoffs.
- IBA Comments: Amy Lee highlighted the reserve drawdown and noted $4.7 million in restricted legacy housing funds that could be unlocked for current priorities. She also suggested council review the transitional housing set-aside in the Affordable Housing Fund, which is no longer aligned with best practices.
- Council Questions: Councilmembers expressed alarm over the financial outlook, particularly the EHV program end and reserve depletion. Councilmember Ilo Rivera asked about the demographic impact (65% female-led, 32% Black/African American, 48% with disability). Council President LaCava noted the county has withdrawn services from some programs. Councilmember Von Wilbert inquired about rent increase controls and the feasibility of canceling future project-based voucher commitments. Councilmember Campbell proposed exploring corporate partnerships through SDHC's 501(c)(3) affiliate. Councilmember Whitburn asked the mayor's office to seek state legislative changes to shift property tax allocation from county to city.
- Key Outcomes: No votes; council members will consider amendments. SDHC will provide briefings after receiving HUD funding letters. The IBA recommended unlocking restricted legacy funds and revising the transitional housing set-aside; council may request city attorney analysis.
Subitem L: San Diego City Employees' Retirement System (SDCERS)
- Presentation: CEO Greg Rodemaker and Finance Director Ted Lesalvia presented the FY2026 administrative budget of $19.2 million (5% increase from FY25). The budget includes a reduction of 3 positions (to 50 FTEs) and a 12% increase in general operations due to a triennial actuarial experience study, cybersecurity insurance, and IT depreciation. SDCERS manages an $11.5 billion trust fund with a 10-year return of 7.1%. The city's plan is 70-90% funded and on track to reach 100% funding by 2042. The ratio of active workers to retirees is nearly 1:1, and the plan has negative cash flow of about $63 million (2024), covered by investment earnings.
- IBA Comments: Lisa Byrne noted the budget does not require council approval. SDCERS's FY2024 net investment income was $778 million (7.2% return). Investment expenses were 0.38% of assets.
- Council Questions: Councilmember Von Wilbert questioned the need to reach 100% funding given the burden on current employees, noting the city faces other budget cuts. Rodemaker defended the amortization schedule, citing the pension crisis in the 2000s. Councilmember Von Wilbert urged flexibility to avoid overburdening current staff.
- Key Outcomes: Informational only; no council action required. SDCERS will continue its current funding strategy.
Subitem M: San Diego Convention Center Corporation (SDCCC)
- Presentation: CEO Rip Rippetoe, CFO Martin Maddox, and COO Corey Albright presented the FY2026 budget. Despite a strong event lineup, the convention center projects a $2.4 million net operating loss, drawing reserves from $25.4 million to $16.4 million. The capital improvement program is scaled to $6.5 million for critical projects (elevator replacement, electrical repairs, central plant fixes), leaving a $1.3 million funding gap for design work on a roof replacement and emergency generator. Long-term capital needs total $400 million over 20 years. Recent failures (boilers, leaks) have risked $9 million in tax revenue and $334 million in economic impact. The city's FY2026 budget includes only $115,500 for stormwater repairs; no capital contribution is proposed.
- IBA Comments: Baku Patel noted the city contributes $16.4 million annually (mostly for bond debt service and marketing). Measure C revenue (projected $48.6 million for modernization/expansion) could support capital, but a long-term plan is needed. IBA believes reserves can cover the $1.3 million gap in FY2026.
- Council Questions: Councilmembers agreed the convention center is a critical economic engine. Councilmember Ilo Rivera questioned why the tourism industry does not contribute more to capital costs, given the profits derived from conventions. Councilmember Campbell and others supported providing $1.3 million for design work, but noted the challenge of finding $9 million for construction in FY2027. Councilmember Moreno asked about state revolving funds and port contributions. Councilmember Lee and Whitburn stressed the need for a sustainable funding source, such as rebonding after existing debt matures in FY2028. The mayor's office acknowledged discussions about using bond proceeds but said it would compete with other capital needs.
- Key Outcomes: No votes; council members expressed support for finding $1.3 million in the May revise. The IBA recommended developing a Measure C expenditure plan. SDCCC will continue discussions with the city and port on long-term capital funding.
Key Outcomes
- Homelessness: HSSD will present a Community Action Plan update on May 20, 2025. Council members intend to propose amendments to restore funding for the Rosecrans shelter and women’s shelter. The IBA recommended adding performance indicators.
- Housing Commission: Council will consider amendments to address the EHV program and reserve depletion. SDHC will brief council after receiving HUD funding letters. City attorney may analyze unlocking restricted legacy funds.
- SDCERS: No council action required; SDCERS will continue its funding plan.
- Convention Center: Council will explore allocating up to $1.3 million for design work in the May revise. A long-term capital plan using Measure C or new bonds is anticipated.
Meeting Transcript
Good morning. And welcome to the next session of the budget review committee of May eighth, twenty twenty-five. Our committee liaison Natalie Kessler will go over instructions for today's meeting. Starting Monday, May 5th, 2025 through Friday, May 9th, 2025, beginning each day at nine AM. The meeting will continue until the entire agenda is complete. Department budgets will be heard in the order of the agenda, subject to the chair's discretion. Throughout the continuous budget review committee meeting, public comment will be taken during each sub-item. The public may also comment on any departments not listed for a formal presentation on the agenda during subitem S, additional department review. This information and instruction is also available on the budget review committee agenda on the city's webpage. While the public is allowed to attend the meetings in person, this meeting is being televised and live streamed on the city's website, and council administration 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 occurs first. This will allow for better meeting management between the two platforms and ensure the council is able to manage and conduct city business for sub-items containing more than one department being discussed. Members of the public will have one minute per department listed with a maximum time of three minutes total. We appreciate the public's cooperation. Chair. Thank you for that. I will now call the budget review committee meeting of Thursday, May 8th, 2025 to order. Natalie, please call the role. Vice Chair Council President Lakava. Committee member Campbell. Committee member Whitburn. Here. Committee member Von Wilbert. Council President Pro Tem Lee. Here. Committee member Kempio. Committee member Moreno. Present. Committee member Elo Rivera. And Chair, Committee Member Foster. Present. Also attending the meeting today, Amy Lee from the Independent Budget Analysts Office, Chief Deputy City Attorney Kathy Steinman from the City Attorney's Office, and policy advisor for Mayor Todd Gloria, Chris Ackerman of Vila. If you're in person, please complete a speaker slip located at the entrance of chambers and place it on top of the box indicated at the speaker's lecture at the front of the room. Please do so in a timely manner to ensure proper meeting management. In-person testimony will conclude before virtual testimony begins. And members of the public can 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 webpage. If you need to participate by phone, you may dial 166-9254-5252. The webinar ID is 160-664-9340 pound. 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 previously, members of the public who wish to provide virtual testimony must enter the virtual queue by raising their hand before the virtual queue closes. The queue will close when the last virtual speaker finishes speaking or five minutes after in-person testimony ends, whichever occurs first. Please note that if you're watching via city TV 24 or online, there may be a delay. So please participate via the audio on your phone and mute your TV or computer when it is your turn to speak. And if you wish to speak on a particular item or sub item, wait for that subitem to be called and then raise your hand to speak by tapping the raise your hand icon, or if you are a call and participant press star nine on your phone. If you raise your hand during a non-comment period, your hand will be lowered. Chair. Thank you, Natalie, for reviewing those instructions for the benefit of the public. A quorum is now present. We will now move to committee members, mayoral staff, city attorney, and independent budget analysts for comments.
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