FOR IMMEDIATE RELEASE
Friday, April 15, 2022

CONTACT:
MayorPress@sandiego.gov

SAN DIEGO Mayor Todd Gloria today released his Fiscal Year 2023 proposed budget, with key investments in repairing aging infrastructure, improving the speed and quality of City of San Diego services, enforcing new regulations such as those addressing sidewalk vending and short-term rentals, enhancing pay and facilities for police, lifeguards and firefighters, addressing homelessness, and ensuring employee compensation is competitive in order to fill vacancies in key roles that deliver critical services to San Diegans.

The $4.89 billion Ready to Rebuild budget reflects the Citys transition out of the pandemic and Mayor Glorias commitment to investing in long-ignored but critical projects and programs that will prepare San Diego for the next several decades. Its the second in a series of budgets that plan for the elimination of the Citys longstanding structural deficit by aligning efficient spending with realistic projected revenues over the course of the next several years.

Budgets are statements of priorities, and this plan prioritizes a healthy fiscal future for San Diego with investments that protect and enhance quality of life for all of our residents, Mayor Todd Gloria said. Were making sure we have personnel to perform the work to address the backlog of repairs to streets, park facilities and sidewalks, and to fix the storm drains that keep our beaches and waterways clean. Were playing the long game with this budget thinking about how this years spending decisions affect San Diegos financial position five years from now and making sure our city stays on a course toward true stability in every respect.

This years budget reflects an improved financial outlook as economic activity recovers, with revenues up over the last fiscal year and poised to continue to grow. Overall, the Citys Department of Finance is projecting total general fund revenues will be up 8.2%, or $143.3 million, over the current fiscal year, which ends June 30. Property tax revenue is forecast to be up 4.1%, or $27.8 million; Transient Occupancy Tax is expected to grow by $36.7 million, or 38.5%; franchise fees from energy and telecommunications utilities will grow by $17.6 million, or 22%; and sales tax is expected to be up more than 15%, or $48.5 million, over last years figures.

Despite the ongoing recovery, the budget faced a shortfall this year and will use American Rescue Plan Act (ARPA) funds to replace lost revenue in order to maintain service levels. This years budget deficit will be backfilled by $123.5 million in ARPA funds, with the remaining balance of $55.8 million in ARPA funds held back to fill a narrowing but still present deficit expected next year. Long-range planning by the Citys Department of Finance aims to effectively eliminate the structural deficit thats plagued San Diego for decades within the next several years.

In this next years budget, Im gratified to see the continued investment in supporting our public safety personnel, which is coming at a critical time, said City Councilmember Chris Cate, who represents District 6 and chairs the Councils Budget and Government Efficiency Committee. Additionally, of all the issues I hear about from District 6 residents, infrastructure is consistently a top priority. The Mayors budget will help address and bolster these significant issues, all of which impact San Diegans every day.

Long-term planning was a central theme in the development of the Mayors proposed budget, with key investments in stormwater to comply with more stringent state water-quality laws and to repair failing or damaged storm drains and pumps that prevent flooding and water pollution. This years budget includes $8.8 million to prepare for a major stormwater infrastructure overhaul over the next several years using low-interest federal loans; $4.1 million for pump station repairs and maintenance; $4.1 million for additional street sweeping; and $1.4 million to educate residents on how to avoid common inadvertent pollution.

The plan funds key neighborhood priorities, including investments in improving Parks & Recreation services, with an additional $4.3 million over the prior years budget dedicated to recruitment and training of workers and addressing high staff turnover and vacancies by converting hourly staff to salaried positions an approach used successfully to improve Library Department staffing and services this year.

San Diegans in every neighborhood should expect and receive quality roads, parks and libraries. Unfortunately, years of neglect and shortsighted decisions have left many communities lacking what they need, said City Council President Sean Elo-Rivera. That era is over, and the Mayor's proposed budget is proof of that. Im excited to partner with my Council colleagues to build on the Mayor's proposal and put together a budget that meets immediate needs and sets the City up for long-term success.

Building on last years major investments in street repair, the FY23 budget adds $8 million to improve streets with upgraded traffic signals, sidewalks and curb ramps, traffic management, tree maintenance and graffiti and weed removal. The Capital Improvements budget also dedicates over $77 million to street resurfacing an increase of $27.6 million over the current annual budget.

Implementation and enforcement of new, long-awaited regulations for short-term rentals and sidewalk vending add up to just over $6 million in the budget, while $4.3 million is being added to existing efforts to address homeless encampments in neighborhoods.

I applaud the Mayors budget because it addresses some of the most important issues in District 2 and throughout the city, said City Councilmember Jennifer Campbell, who represents Mission Beach in District 2, where the announcement was held. Im looking forward to the enforcement of the new regulations on short-term vacation rentals and the new vendors ordinance. The Mayors budget will also work to resolve homelessness and create more housing for San Diegans.

The proposed budget lays out spending to continue to address homelessness, with an additional $13.6 million dedicated to increasing shelter capacity, services and coordinated street outreach. Total funding for homelessness services is $63.3 million in this budget, with two-thirds of that sum coming from state and federal grant programs.

The budget also includes funding to make significant progress on fulfilling the goals of the Citys ambitious Climate Action Plan (CAP), including key positions that will implement the CAP and expertise to help develop the Mobility Action Plan, the Zero Gas Emissions Vehicle Strategy and the Building Decarbonization Strategy. It also includes the addition of a Chief Resiliency Officer, responsible for implementation of the Climate Resilient SD plan to prepare our communities for the impacts of climate change.

Importantly, the budget includes $5.4 million to comply with Senate Bill 1383, which requires the City to divert organic waste such as yard and food scraps from the landfill to compost and mulch production, reducing the significant carbon emissions created by rotting waste. These funds will pay for the deployment of 240,000 green waste containers and kitchen pails, route-optimization hardware and software for collections, and an educational campaign to ensure San Diego residents understand these new waste-reduction requirements.

Public safety continues to comprise a significant portion of the budget, and this years proposal invests in facilities, recruitment, police overtime and gang prevention. The City is currently in contract negotiations with the public safety bargaining units for police, firefighters and lifeguards, and the proposed budget anticipates salary increases that will be included in the final budget.

I want to thank Mayor Gloria for his commitment in his proposed budget to public safety and law enforcement, Police Chief David Nisleit said. The San Diego Police Department is responding to calls that require more and more of our officers every day. This years budget will allow us to recruit and retain more officers and prioritize programs to keep our communities safe.

The spending proposal also funds equity programs to help ensure all San Diegans have an opportunity to thrive, with an additional $1 million to operate the Office of Race & Equity, Office of Child & Youth Services and Office of Immigrant Affairs. The budget also adds $1.2 million to balance recreation programming throughout the city, $171,000 for translation/interpretation services, $441,000 for the digital equity program, and $850,000 for technical and bonding assistance programs to help diverse contractors successfully compete for City business. In addition, the Connect 2 Careers and Small Business Enhancement programs together will see an additional $1.25 million in the next budget cycle.

To help facilitate citywide housing production by reducing permitting times, the budget adds staff capacity for the Citys Development Services Department to speed processing times. These new positions are cost-recoverable and will enable the City to focus a subset of permit technicians, reviewers and supervisors to permit projects that deliver new homes.

Mayor Gloria will formally present his proposed budget to the City Council on Monday, April 18, followed by several weeks of public hearings leading up to the release of a revised budget on May 17 that incorporates councilmember and community feedback. Final consideration by the City Council will take place in mid-June. With adoption of an appropriation ordinance due no later than June 30.

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