2024 Proposed Budget


Mayor's Message - Fiscal Year 2024 Budget

Dear San Diegans:


I am proud to present the Fiscal Year 2024 Proposed Budget. Over the last two years, we invested millions in federal and State relief dollars to jumpstart San Diego’s economic recovery, provide aid to small businesses and help our most vulnerable residents. My “Getting it Done” budget builds on the considerable progress made over the last two fiscal years while continuing to invest in my administration’s top priorities including homelessness, infrastructure, and public safety.


This year, I’m proposing we make the greatest ever General Fund investment to achieve greater progress on homelessness. We are expanding General Fund ongoing support by an additional $24.5 million to maintain the 70 percent in additional shelter bed capacity we’ve achieved to date with an additional $5.0 million to further expand shelter capacity in Fiscal Year 2024. This includes funding for a Safe Camping program, which will enable people experiencing homelessness to camp in a sanctioned area with access to hygiene and housing and services that will help them end their homelessness.


Addressing homelessness effectively requires a comprehensive approach that includes keeping housing-insecure people in their homes. As part of this effort, we are allocating an additional $2.3 million for rental assistance for San Diegans who are at risk of losing their housing. By supporting individuals and families in maintaining stable housing, we can prevent homelessness before it occurs – by far the most cost-effective approach to ending homelessness.


This budget also adds $1.4 million in funding to support additional positions and vehicles to remove waste from the public right-of-way in areas most heavily impacted by encampments. This investment will help to address impacts to the health and safety of our communities and improve the quality of life for all San Diegans.


Last year's budget significantly expanded the capacity of our City's workforce to deliver critical capital projects that benefit San Diego communities, and we are continuing to prioritize infrastructure investments in the Fiscal Year 2024 Proposed Budget. We are transferring $21.5 million from the General Fund to continue making necessary improvements to our city's buildings and parks and to fund stormwater infrastructure, which helps prevent water pollution, reduce the risk of flooding and erosion, and protect the environment.


Historically, San Diego has struggled to keep up with needed repair and maintenance of our public right-of-way, a challenge my administration has prioritized, with additional funding for road repair in my first two budgets as Mayor, as well as efforts to identify and fix processes and policies that slow down repair. This budget will continue to ramp up these investments. Through our capital financing program, we are allocating more than $100 million toward street resurfacing, which is the most we have invested in any given year. When including slurry seal, this will allow us to maintain and repair 157 miles of streets. This funding will also lay the foundation for additional investments in future years and will significantly improve the quality of our city's streets, making them safer and more accessible for all San Diegans.


This budget includes $38.6 million in capital improvement program funding for parks, which will allow us to enhance recreational opportunities for community members and visitors alike. These investments will include improvements to our parks and playgrounds, as well as the development of new amenities and green spaces throughout the city. Access to parks and open spaces is vital to the health and wellbeing of our communities, particularly in underserved neighborhoods. This funding will help us continue to provide safe, accessible, and inclusive parks and recreation facilities for all San Diegans to enjoy.


Keeping our communities safe is job No. 1 for City government, and we are committed to providing our public safety departments with the resources they need to do their jobs effectively. We are investing $4.0 million in smart streetlights that will be placed strategically throughout the city to help solve crime, as well as to investigate collisions involving fatal and serious injuries. This investment in public safety is essential, and we are committed to ensuring It’s done in a way that carefully balances public safety with San Diegans’ expectations of privacy.


We are also right sizing the overtime budget for our safety departments. This includes an increase in overtime of $15.7 million for the Fire-Rescue department and $9.2 million for the Police Department. This increase will allow our departments to meet their current safety needs while we continue to enhance our recruitment and retention efforts to achieve full staffing.


In addition, this budget also adds ten Police Investigative Service Officer positions to support administrative functions more cost-effectively for the Police Department, freeing up our sworn police officers to patrol and respond to calls for service.


We are also adding positions to the Fire-Rescue Department that will be focused on fire safety inspections and the hazardous materials management throughout the city. By expanding these functions, we can proactively identify and address potential hazards, making our city safer for all San Diegans.


In addition to the positions in the Fire-Rescue Department, we are also adding lifeguard positions at La Jolla Shores beach and funding the Lifeguard Division's biannual Advanced Lifeguard Academy. The 10-week lifeguard academy provides advanced training in a variety of critical disciplines, including law enforcement, cliff rescue, and water rescue. This training is essential to ensure our lifeguards have the advanced skills and knowledge they need to respond effectively to all types of water emergencies.


This budget reflects our commitment to environmental sustainability. One major initiative is the implementation of organic waste diversion from the City’s landfills, a program which will reduce greenhouse gas emissions and produce compost to improve soil quality. To support this effort, Citywide public benefit programs that are currently funded in the Refuse Disposal Enterprise Fund, will be reallocated to the General Fund to support the Refuse Disposal Enterprise Fund’s long-term solvency.


To promote climate equity, we are allocating $9.2 million to the Climate Equity Fund, which will help historically underserved communities to better respond to the impacts of climate change. Projects that receive funding must have an impact on reducing greenhouse gas emissions, enhancing safety in the public right-of-way, relieving congestion, or achieving other climate equity concerns, and be located in a Community of Concern as identified using the Climate Equity Index.


Finally, we are adding $1.1 million for an Urban Forestry Program to implement an aggressive and robust tree planting and tree well cutting program in historically underserved communities. This investment reflects our commitment to environmental sustainability and equity, and we are confident they will have a positive impact on our communities for years to come.


We recognize the importance of arts and culture in creating vibrant communities and are proud to support our local artists and arts organizations. This budget makes permanent prior year one-time funding and adds additional support through the City of San Diego Commission for Arts and Culture, for a total allocation of $15.3 million. This investment represents the highest funding level for the arts in the City's history and reflects our commitment to ensuring that the arts remain accessible to all San Diegans. We believe that investing in the arts not only enhances our community's cultural vibrancy but also drives economic development, promotes tourism, and enriches our residents' quality of life.


As we continue to recover from the pandemic and work to ensure the long-term financial stability of our city, it is important that we maintain a healthy level of reserves. That is why we are restarting General Fund reserve contributions to protect the City from service reductions in the event of a recession as well as to fund emergencies. I am proud to announce that we did not use reserves during the COVID-19 pandemic, which is a testament to our city's strong financial management and the resilience of our community. This budget adds $6.8 million to General Fund reserves, which will bring our total reserves to a level that is both responsible and prudent. These reserves will provide us with the necessary resources to respond to unexpected challenges while maintaining our commitment to delivering high-quality services to our residents.


Investing in our personnel is critical to delivering high-quality services to our residents and promoting inclusive work environments. After nearly a decade of stagnant salaries, we recognize that the City's employee compensation is not competitive with other agencies throughout the region. While we have taken steps to address this issue by increasing compensation and restoring benefits to better align salaries with the current employment market, we acknowledge that there is still more work to be done to attract and retain talented, dedicated individuals to serve our community members. To further support recruitment efforts and address vacancies, this budget includes six positions to support our Recruitment Program and provide general Human Resources support to departments.


This budget reflects my administration’s commitment to equity by addressing longstanding disparities between communities. For the first time ever, we have worked to incorporate an equity lens into every aspect of the budget process, from identifying priority areas for investment to evaluating the impact of proposed expenditures on historically underserved communities. The budget takes concrete steps to address these disparities, increasing funding for programs that benefit historically underserved communities; strategically allocating resources from the Climate Equity Fund to address the impacts of climate change on underserved neighborhoods; and investing in affordable housing and homelessness solutions. We will continue to prioritize equity in our budget decisions to ensure that we address institutional racism and systemic disparities, providing everyone with equitable access to opportunity and resources to thrive, no matter where they live or how they identify.


In conclusion, this Fiscal Year 2024 Proposed Budget reflects our priorities and commitment to enhancing the well-being of our community. By focusing on key areas such as infrastructure, public safety, housing, and homelessness, we aim to create a better and more equitable San Diego. I look forward to working with the City Council and all stakeholders to ensure that this budget is a success and that we continue to build a thriving, equitable and inclusive community for all.


Sincerely,


Todd Gloria

Mayor

City of San Diego Budget

The City of San Diego's Fiscal Year 2024 Proposed Budget is $5.12 billion and is comprised of five operating fund types and the Capital Improvements Program (CIP). This represents an increase of $47.1 million, or 0.9 percent, compared to the Fiscal Year 2023 Adopted Budget. This is primarily due to increases in the Enterprise Funds and General Fund, offset with a decrease in the Capital Improvements Program (CIP) associated with fewer appropriations for the Pure Water Program.

General Fund Revenues

The Fiscal Year 2024 Proposed General Fund revenue budget is $1.98 billion, which represents an increase of $32.7 million, or 1.7 percent, from the Fiscal Year 2023 Adopted Budget. Departments within the General Fund provide essential City services including police, fire, refuse collection, homelessness services, library services, and parks and recreation programs. These sources account for 72.0 percent of the Fiscal Year 2024 Proposed Budget General Fund revenues and are projected to increase by $109.9 million, or 8.3 percent, from the Fiscal Year 2023 Adopted Budget. The increases in the major General Fund revenues is primarily attributed to the continuing robust growth of the economic recovery from the COVID-19 pandemic. The increase in major General Fund revenues are based on projections included in the Fiscal Year 2023 Mid-Year Budget Monitoring Report (Mid-Year Report), and most recent economic data available at the time of development.


In addition to increases in the major General Fund revenues, other revenue sources reflect a decrease of $77.3 million, or 12.2 percent, primarily attributed to a decrease of $95.6 million in one-time American Rescue Plan Acts (ARPA) funds and $9.0 million in one-time revenue from the Monsanto class action settlement included in the Fiscal Year 2023 Adopted Budget. These decreases are partially offset with an increase of $21.7 million in TOT revenues to support the safety and maintenance of visitor related facilities, and $5.9 million in reimbursements from the Environmental Growth Funds to support eligible expenditures. These increases are addressed in further detail in later sections of this report.

General Fund Expenditures

The Fiscal Year 2024 Proposed Budget for General Fund expenditures is $2.04 billion, which represents an increase of $88.2 million, or 4.5 percent, from the Fiscal Year 2023 Adopted Budget. These expenditures are primarily supported by major General Fund revenue sources that include property tax, sales tax, transient occupancy tax, and franchise fees. These critical expenditure additions primarily maintain current services, and minimally adds enhancements and services to address the needs of residents.


The Fiscal Year 2024 Proposed Budget includes funding to maintain current service levels and enforces areas of importance for the public. New and expanded services include additional homelessness services, SD Access for all, public safety, urban forestry, CleanSD, and new facilities. The list highlights some of the General Fund critical expenditures.

FY 2024 Proposed Budget General Fund Expenditures

Balanced Budget and Conclusion

The Fiscal Year 2024 Proposed Budget continues to focus on the City’s goals and make investments to address the City's various needs including: public safety, waste management, right-of-way maintenance, libraries and recreational facilities, and homelessness programs. This balanced budget includes funding to maintain current services and fund areas of importance to the public. The Adopted Budget includes an increase of $109.9 million in additional Major General Fund revenues from the continuing economic recovery from the COVID-19 pandemic and includes the use of an additional $52.1 million of one-time funding from the American Rescue Plan Act of 2021 and $68.6 million in fund balance in excess of reserves, or excess equity. This Fiscal Year the budget is balanced with sufficient resources to support expenditures. Based on current projections, balancing the General Fund budget in future years will require finding additional ongoing resources, minimizing additions, and refraining from adding ongoing programs without dedicated funding sources.