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Fiscal Year 2017 Adopted Budget

A Message From Mayor Faulconer

To the Members of the City Council and the Residents of San Diego:

I am pleased to present a balanced Fiscal Year 2017 Adopted Budget that continues the work of building San Diego’s better future. It furthers the progress the City of San Diego has made to put neighborhoods first, create a better quality of life for all communities and provide equitable service to neighborhoods throughout the City. The Adopted Budget enhances neighborhood services and prioritizes investment in streets and infrastructure while maintaining a strong commitment to responsible financial management.

In this budget you will find funding for programs and projects that create a lasting impact on the lives of San Diegans, including repairing roads, parks and critical infrastructure; enhanced public safety; funding for environmental protection through the implementation of the Climate Action Plan; increased recreation center hours; expanded afterschool programming; additional services to address homelessness; investment in youth employment; and a continued focus on my administration’s commitment to government transparency and open data initiatives.

The Adopted Budget reflects San Diego’s strong economy, projecting moderate growth in all major General Fund revenue categories. This sustained growth allows for enhanced services in every community. While the Adopted Budget projects moderate increases in revenues, growth has modestly declined compared to recent fiscal years. Economic uncertainty exists both in the stock market and major sales tax generating categories such as oil and gas prices and general consumer goods. These conditions make Fiscal Year 2017 an important year to continue building and enhancing the City’s reserves to ensure a sustainable financial future. 

As we continue to invest in building stronger communities, we must also safeguard San Diego’s financial health. The Adopted Budget recommends fully funding City reserves, including additions to the City’s General Fund Reserve and risk management reserves. To further protect communities from service reductions in the future, I recommended and the City Council has approved the creation and funding of a new Pension Payment Stabilization Reserve to minimize cuts to neighborhood funding when the City incurs unexpected increases in pension payments from market volatility, changes in actuarial assumptions or other factors. For over a decade, the City has responsibly funded in full its pension obligations and this pension reserve bolsters the City’s fiscal sustainability. Our strong reserve policy is key to sustaining the City’s service levels and protecting against the effects of potential economic downturns or slowing in the economy.

Building Our Better Future: Repairing Streets and Investing in Infrastructure

The City’s highest infrastructure priority remains street repair. The City repaired 321 miles of streets in Fiscal Year 2016 and there is funding to repair up to 380 miles of streets included in this Fiscal Year 2017 Adopted Budget. We are on schedule to repair roughly one-third of the City’s entire street network – 1,000 miles – over a five year period. Other important infrastructure investments funded in the Adopted Budget include park improvements, streetlights, sidewalk repair and replacement, infrastructure to support energy and conservation elements of the Climate Action Plan, and repair of storm water infrastructure and City-owned buildings.

The Adopted Budget includes the addition of 21 full-time positions to improve the condition of City facilities, such as recreation centers and libraries. This budget also includes funding to continue facility condition assessments and to create job opportunities for skilled workers in various trades through a new apprenticeship program in the City’s Public Works Department.

Safe and Livable Neighborhoods

Every San Diegan should feel safe in his or her neighborhood. Retaining and recruiting police officers to grow and strengthen the San Diego Police Department continues to be a large focus in this budget. The Adopted Budget includes $5.9 million in non-pensionable pay increases for the second year of a landmark five-year agreement between the City and the San Diego Police Officers Association as well as $4.7 million to support police officer and police dispatcher recruitment and retention efforts. There are also funding increases to support additional sworn and civilian police positions, additional overtime for police officers, body-worn cameras, and improvements and repairs to police facilities – primarily the Police Headquarters.

The Adopted Budget funds resources to improve citywide response times by fire crews and emergency first responders. Funding is provided for an additional fire academy, for a total of two academies in Fiscal Year 2017. Additionally, the Adopted Budget adds 32 full-time positions and operational funding for the temporary fire station in Skyline, the permanent station in Eastside Mission Valley and two Fast Response Squads as recommended in the Citygate report on fire services deployment. The Adopted Budget also provides funds to increase the size of each Fire Academy from 36 to 48 participants, deploy the Fire-Rescue Strike Team and purchase specialized equipment for helicopter mechanics.

Protecting and preserving San Diego’s beaches and bays – and the visitors who enjoy them –remains a top priority of my administration. Our scenic coastline provides valuable recreational opportunities for local residents and attracts millions of tourists each year. City lifeguards are responsible for providing the highest quality safety services in our coastal and aquatic environment. In line with the top priorities from the Lifeguard Division Five-Year Needs Assessment report, the Adopted Budget provides for an advanced lifeguard academy; additional training for seasonal lifeguards; a lifeguard sergeant; and additional lifeguard positions for Ocean Beach, Mission Bay and Sunset Cliffs.

Bringing Equality to Opportunity

We all deserve equal access to opportunities, no matter which zip code you call home. Quality neighborhood services are essential to building stronger, more resilient communities. 

The Adopted Budget builds upon park service improvements in recent fiscal years, expanding hours of operation at recreation centers from 45 hours to 60 hours per week. Funding has been included to enhance hours at eight additional recreation centers throughout San Diego—bringing the total number of recreational centers with expanded hours to 44 since 2015. There is an increase in funding for critical repairs and maintenance of public facilities throughout Balboa Park. The Adopted Budget also provides additional funding to support operation and maintenance needs for the 15 new and expanded park and recreation facilities opening to the public during Fiscal Year 2017; staffing and contracts for playground improvements, repairs and rubberized surfacing; and increasing the funding for La Jolla Cove odor mitigation.

Libraries, our City’s centers for lifelong learning, similarly see continued gains in the Adopted Budget. The popular “Do Your Homework @ the Library” program will be expanded at all current locations in order to accommodate increased demand. Additional library funding is included to support education, community engagement and development programs, and additional positions will provide enhanced educational opportunities at the Valencia Park and Malcolm X libraries. Funding has also been included to provide staffing for the operations of the new Skyline Hills Branch Library opening in Fall 2016.

To build a stronger, more prosperous City where every neighborhood can share in San Diego’s growing economy, more funds have been allocated to the “Connect2Careers” program – a San Diego Workforce Partnership initiative launched with seed funding from the City of San Diego – to support efforts to increase employment opportunities for San Diego’s youth.

The Adopted Budget also includes resources to help homeless veterans and individuals with a renewed focus on permanent solutions to ending homelessness one person at a time. In total, approximately $2 million continues to be provided for programs that connect the homeless with housing opportunities and rehabilitative services that transform lives.

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 funds new technologies to help the City provide improved customer service, cultivate civic engagement, and operate with greater levels of accountability and transparency.

Following the successful launch of the new City of San Diego website, the Adopted Budget funds resources for a new customer service portal modeled off the national 3-1-1 phone and online non-emergency assistance program. The system, which will include online tools, will make accessing City information and reporting problems – such as potholes – simpler and faster for residents and businesses. City employees will have access to a new centralized database to help answer frequently asked questions and more efficiently route service requests through existing work order systems. This multi-year effort will accelerate improvements in customer service and continue the spirit of innovation initiated with the San Diego Works efficiency program in 2014.

The Adopted Budget also includes additional resources to further the City’s open data initiative, which aims to post more public information online, and to support more efficient management of responses to requests made under the California Public Records Act.

Strong Financial Management and Commitment to Operational Efficiencies

San Diego’s commitment to fiscal stability and strong financial oversight fosters a healthy financial future, as well as saves taxpayers money through lower borrowing costs. The City’s fiscal health is the result of effective financial management policies, long-term financial planning and a comprehensive plan to address both pension and retiree health care costs. According to Fitch Ratings, drivers of the City’s strong credit rating include San Diego’s solid financial operations resulting from ongoing commitment to conservative fiscal management policies; General Fund balance and reserves preservation; financial disclosure practices; and pension and retiree health care reform. Standard & Poor’s Ratings Service has cited the City’s very strong management and fiscal policies, including five-year financial forecasting, a policy of maintaining emergency and stability reserves, and strong budgetary oversight as some of the key reasons behind San Diego’s credit rating (Fitch “AA”; Moody’s – “Aa2”; S&P “AA-“).

Conclusion

The Fiscal Year 2017 Adopted Budget continues lay the foundation for building a better future by creating opportunities for San Diegans in every community. The budget prioritizes services and programs that continue to support “One San Diego” where all neighborhoods can thrive, more San Diegans can have access to economic opportunity, and our City government is open, effective and efficient. The Adopted Budget enhances General Fund reserves and creates a new Pension Payment Stabilization Reserve in addition to increasing funding for infrastructure improvements and public safety, restoring and enhancing neighborhood services, increasing funding for expanded youth opportunities and customer service initiatives while maintaining sound financial practices.

I look forward to working with the City Council during the budget adoption process and I appreciate their collaboration to produce a responsible and transparent adopted budget for the next fiscal year. I also thank our City employees for their continued commitment to providing outstanding service to our communities.

Sincerely,

Kevin L. Faulconer
Mayor