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Fiscal Year 2019 Adopted Budget

A Message From Mayor Faulconer

To my fellow San Diegans:

I am pleased to present a balanced Fiscal Year 2019 Adopted Budget that protects and furthers the progress the City of San Diego has made to put neighborhoods first, create a better quality of life for all communities, and maintain restored services throughout the city. This is a structurally‐balanced plan that keeps the focus on core community services San Diegans value such as a Clean San Diego, road repair, parks, libraries, and public safety.

The Adopted Budget preserves neighborhood services added over the last four budget years and continues to prioritize investments in streets and infrastructure while maintaining responsible financial management. I have directed departments to hold the line on spending in order to allocate critical funds needed to enhance neighborhood services and expand citywide cleanup efforts to keep San Diego neighborhoods clean and safe.

San Diego’s economy remains strong, and the Adopted Budget projects moderate growth in all of the City’s four Major General Fund revenue categories – Property Tax, Sales Tax, Transient Occupancy Tax (TOT), and Franchise Fees. The Adopted Budget balances the continuing trend of positive key economic indicators with a corresponding softening in the year‐over‐year rate of growth in some major revenues, including property tax and TOT.

The Adopted Budget includes funding for programs and projects that make a difference in the lives of San Diegans. This includes road repairs; parks and critical infrastructure; police recruitment and retention; citywide coordination of the Climate Action Plan; staffing for new and expanded recreation facilities; staffing for new library facilities and protection of library and recreation center hours; increased homeless services and housing affordability initiatives; a lifeguard academy; library programming and increased funding for the Pure Water program that will create a drought‐proof, independent local water supply.

Even though the City is projecting modest revenue growth in Fiscal Year 2019 to help fund these priorities, Fiscal Year 2019 continues to be a lean budget year. This Adopted Budget is fiscally responsible; we continue to fully fund our pension payment, which significantly grew last year due to actuarial changes and experience losses. We are fully funding General Fund and risk management reserves to their target levels and plan to contribute to the pension stability reserve. The difficult choices we made in Fiscal Year 2018, including a reduction of $18 million in General Fund ongoing costs, have provided relief in this and future budgets so that we can expand funding for neighborhood services and programs San Diegans have told me are critical.

The Adopted Budget protects neighborhood services and expands the Clean SD initiative with more crews for cleaner communities. Public safety and investments in infrastructure continue to be funded as priorities in all communities. We have embraced new ideas and taken new approaches to address homelessness. This Adopted Budget has increased funding for Bridge Shelters, safe parking programs, transitional storage and operations of the new Housing Navigation Center.

The Adopted Budget is structurally balanced in accordance with the City’s Budget Policy, with ongoing expenditures supported by ongoing revenues.

Building Our Better Future: Repairing Streets and Investing in Infrastructure

The Adopted Budget funds the largest infrastructure investment in City history and is the second year since implementation of Charter Section 77.1 (Proposition H), which requires the City to dedicate specific revenue sources to fund new General Fund infrastructure such as streets, sidewalks, bridges, and buildings, and requires the maintenance and repair of such infrastructure. The Adopted Budget includes a $17.1 million transfer from the General Fund to the Infrastructure Fund. Supplementing other infrastructure funding throughout the Adopted Budget, this fund provides for critical road repairs, sidewalk repair and reconstruction, street lights and park security lighting, bike facilities and new infrastructure projects based on needs identified in recent facility condition assessments.

Road conditions affect every San Diegan in every community, so the City’s highest infrastructure priority remains street repair. On April 2, 2018 the City passed the 800th mile marker on my pledge to fix 1,000 miles of streets in five years. This is a record pace for road repair and well ahead of the five‐year schedule. The Adopted Budget includes $75.9 million in funding to pave, repair, and replace 390 miles of streets, which will help the City maintain the long‐term goal of an average Overall Condition Index of 70, or good condition.

Other important infrastructure investments funded in the Adopted Budget include park improvements, streetlights, sidewalk repair and replacement, restoration of tree trimming funding, infrastructure to support energy and conservation elements of the Climate Action Plan, Pure Water, and water main replacements.

Clean, Safe and Livable Neighborhoods

Every neighborhood deserves clean streets and sidewalks. The Adopted Budget expands the Clean SD initiative by adding 16 positions and more than $4 million in funding for responding more frequently to the removal of sidewalk debris, illegal dumping, street sweeping, on‐call litter removal and expanding sidewalk sanitization in downtown and other areas based on need. There is also a new penalty structure with increased fines of up to $1,000 for any individuals found illegally dumping trash and other waste in our neighborhoods. The Adopted Budget also includes funding for continued handwashing stations at 11 sites, 8 portable public restrooms with security services and security services at the civic center public restrooms.

San Diego is one of the safest big cities in the country, and overall crime is at its lowest point in half a century. The Adopted Budget includes $28 million in salary and fringe benefit increases for the largest recruitment and retention package in San Diego Police Department (SDPD) history. This new police contract, approved by City Council on December 5, 2017, makes SDPD competitive with other law enforcement agencies, with a goal to fully staff SDPD by 2020.

The Adopted Budget also includes the addition of $1 million for 13 civilian positions to support operations in SDPD’s Communications and Special Events unit which are expected to increase officer availability to address crime and proactively contribute to public safety.

Additions to the Neighborhood Policing Administration to provide support for police‐related quality of life issues throughout the City are also proposed. As is the addition of one Police Captain to support police officer recruitment and retention.

The Adopted Budget funds resources to improve citywide response times by Fire‐Rescue crews and other emergency first responders. Funding is provided for the expansion of the fire academy from 24 to 36 recruits; this will maintain projected full staffing levels throughout Fiscal Year 2019 which in turn will help control overtime costs. The Adopted Budget also includes funding for 9 Fire‐Rescue Emergency Command and Data Center staff to support constant staffing and reduce mandatory overtime; funding to replace two specially designed lifeguard watercraft; a lifeguard academy and a clerical assistant for lifeguard division; additional funding for Fire-Rescue overtime and critical safety and communications equipment for firefighters.

Further, the Adopted Budget preserves the critical public safety staff additions from Fiscal Year 2017 of lifeguards for Ocean Beach, Mission Bay, and seasonal lifeguards at Sunset Cliffs.

Opportunity in Every Community: Protecting Key Neighborhood Services

We all deserve equal access to essential and effective public services, no matter which zip code we call home. Neighborhood services are key to building stronger communities where more residents have the opportunity to succeed.

The Adopted Budget protects all parks service enhancements funded in recent fiscal years such as keeping recreation centers open longer throughout San Diego – bringing the total number of recreational centers with expanded hours to 44 over the last three budget years. The Adopted Budget also provides additional funding to support operation and maintenance needs for 60 additional hours per week at 10 new and expanded Parks and Recreation facilities opening to the public during Fiscal Year 2019. Funding is also included for transit station facility maintenance, additional funding for brush management, expanded restroom hours at Balboa Park, and recreation center council administration support.

The Adopted Budget protects our community centers for lifelong learning by maintaining library hours and the popular “Do Your Homework @ the Library” program. The Adopted Budget also includes funding for staff and operations of the new Mission Hills and San Ysidro libraries which will increase library hours citywide by 102 hours per week. Additional library funding is included to increase library programming, increase security services at the Central Library and for self‐service kiosks hours.

We’ve taken new actions to address homelessness this year, focusing on our strategy to “Connect, Support, House.” The Adopted Budget includes $8 million from the General Fund for homelessness programs and services. Three bridge shelters will continue to service up to 700 individuals per day with beds and supportive services, including housing navigators to help people find homes. Two safe parking zones with capacity for 120 total cars will continue to provide those temporarily living in their cars with a safe place to park at night.

The new Housing Navigation Center will open as the region’s first comprehensive homeless facility; funding for its operations is included in this Adopted Budget. There is also funding for the Homeless Outreach Team (HOT) within the SDPD and San Diego Misdemeanants at Risk Track (SMART) program within the City Attorney’s office.

There is also $12.9 million in anticipated Community Development Block Grant (CDBG) program entitlement allocations and CDBG program income for the City’s Reinvestment Initiative to fund homelessness programs and services. These allocations are contingent upon funding being secured and are proposed for Housing Navigation Center operations, homeless facility/permanent supportive housing acquisitions, and other homelessness programs.

Housing SD is a strategy to increase housing supply and boost affordability in San Diego. The Adopted Budget includes funding for the Affordable Housing Density Program which fully implements the housing plan for the middle‐income residents as well as funding in the General Fund to allow for fee waivers for Companion Unit permits.

Excellent Customer Service and Open Government

Our goal is to make San Diego’s government as innovative as the people it represents. The Adopted Budget maintains our investment in cutting‐edge technologies to improve customer service, cultivate civic engagement, and operate with greater levels of accountability and transparency.

The Adopted Budget continues to invest in the “Get It Done” customer experience platform and software implementation and staffing.

The Adopted Budget also continues to invest in a more efficient management system for public records requests and an in‐house training program to help City employees identify waste and implement streamlining measures and efficiencies.

Strong Financial Management and Commitment to Operational Efficiencies

San Diego’s commitment to fiscal stability and strong oversight promotes a healthy financial future as well as saves taxpayer money through lower borrowing costs. The City’s fiscal health is the result of effective financial management policies, long‐term financial planning and comprehensive efforts to manage both pension and retiree healthcare costs.

Conclusion

The Adopted Budget keeps the focus on key services the public, City Council and I have worked hard to prioritize. This budget proposal is structurally balanced, using ongoing resources for ongoing expenditures in accordance with the City’s Budget Policy.

The City is projecting modestly improving revenue from property, sales, hotel, and franchise taxes in the Adopted Budget, but that growth continues to soften when compared to previous fiscal years. That being considered, this is the 14th consecutive year of fully funding the City’s annual pension payment. The Adopted Budget does so without cutting critical funding for infrastructure or service level improvements previously restored by this administration. This proposal fully funds reserves to target levels and also contributes to the pension stability reserve, protects and expands current library and recreation center hours, increases funding for housing affordability initiatives, and funds key parks projects. It will add staff to operate and maintain new parks and library facilities, funds negotiated labor contracts – including the new police recruitment and retention package approved December 5, 2017, provides new public safety resources and invests in road repairs to maintain good street conditions.

Balancing the budget again involved making tough decisions and a commitment to fiscal responsibility, and I sincerely appreciate every stakeholder who is helping to maintain the financial health of our City by contributing to this budget plan. I would also like to thank our City employees for their continued commitment to providing outstanding service to our communities.

Sincerely,

Mayor Budget Approval

Kevin L. Faulconer
Mayor

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