2025 Proposed Budget


Mayor's Message - Fiscal Year 2025 Budget

Dear San Diegans:



I am proud to present the City of San Diego's Fiscal Year 2025 Proposed Budget. This budget builds on the considerable progress made over the last three fiscal years while continuing to invest in my administration’s top priorities including homelessness, housing, infrastructure, and public safety.


The fiscal strategies laid out in the Fiscal Year 2025 Proposed Budget include both strategic reductions across various departments and targeted investments in critical areas. However, these measures, while significant, are part of a longer-term process to rectify the city's structural budget deficit. Addressing this issue is a complex and nuanced challenge, one that cannot be resolved overnight. It requires a multifaceted approach that combines immediate cost-saving measures with strategic planning for revenue generation and efficient service delivery over the coming years. It involves not only reevaluating current expenditure patterns but also exploring new and enhanced sources of revenue, alongside the judicious use of one-time solutions to bridge gaps without compromising essential city services.


This budget continues to prioritize funding for our most vulnerable residents. Funding for homelessness in the City of San Diego is set to increase by $18.3 million. This significant investment underscores the city's commitment to addressing homelessness with both urgency and compassion. In line with the City's Comprehensive Shelter Strategy, the Fiscal Year 2025 Proposed Budget includes dedicated funding to expand the capacity of the city's shelter system in alignment with calls from the City Council to expand shelter options. Specifically, the budget aims to increase the number of shelter beds available to people experiencing homelessness by at least 1,000 with on-site security, meals, housing navigation and case management services. The budget also includes funding to double the size of the City’s Safe Parking program by transforming the H Barracks into a Safe Parking site. This approach demonstrates a collaborative effort across the City to effectively leverage resources in the ongoing battle against homelessness, ensuring a comprehensive and sustainable strategy moving forward.


In my commitment to push forward initiatives that accelerate housing development and enhance affordability across San Diego, I've ensured the Fiscal Year 2025 Proposed Budget for our Development Services Department (DSD) funds our "Complete Communities Now" program, a key component of my strategy to make our housing project review process more efficient. By setting a new standard that requires housing projects under the Complete Communities framework to be reviewed within 30 days, we're placing DSD at the heart of a major transformation in how we handle housing development. By integrating these enhancements into DSD's budget, we're sending a clear message about our dedication to making housing more affordable and accessible, and speeding up the creation of new homes across the City.


In navigating the fiscal landscape for the Fiscal Year 2025 Proposed Budget, all City of San Diego departments were tasked with identifying potential budgetary reductions to address our structural deficit. However, it was crucial for my administration that reductions impacting our critical public safety services, specifically within the Fire-Rescue and Police departments, be kept to a minimum. This careful approach underscores our commitment to maintaining the safety and security of our community. Cost-cutting measures in the Police Department have been thoughtfully implemented to ensure efficiency without compromising the quality of service. Among these measures is the rightsizing of the police academies to up to 30 Police Recruits per academy, with four academies held annually. Additionally, we are implementing a policy to have two Police Officers per vehicle to reduce fuel costs and an overall reduction in extension of shift overtime. These adjustments reflect a balanced approach to budgetary management, ensuring the Police Department remains agile and responsive while also being fiscally responsible.


We are also making strategic investments in the Fire-Rescue Department. Notably, the budget includes the addition of 12 new positions along with necessary non-personnel expenditures to support the operational needs of the new Torrey Pines Fire Station, which is slated to open next year. This enhancement ensures that our Fire-Rescue Department is better equipped to respond to emergencies, reinforcing our dedication to public safety.


As Mayor of San Diego, I stand before you at a pivotal moment where the need to expand and rejuvenate our city's infrastructure, public spaces, and facilities has never been more pressing. Our commitment to improving the quality of services for our growing community is unwavering, yet we face the challenge of modernizing and enhancing these services amidst a backdrop of historical underinvestment and deferred maintenance. These are not just assets from the past; they are the backbone of our future.


I'm thrilled to share that our Transportation Department has developed a groundbreaking Pavement Management Plan (PMP), marking a first in the City's efforts to optimize our street maintenance and investment strategies. This plan is a pivotal step in our ongoing commitment to providing a reliable and efficient transportation network for our community. Based on the most recent pavement condition assessment conducted in 2023, the PMP leverages comprehensive, data-driven insights to strategically address our city-wide street conditions and identify necessary investments to maintain our street network effectively. This innovative approach allows us to proactively pinpoint funding needs, ensuring that our streets—vital arteries of our community—are kept in good condition. The Fiscal Year 2025 budget earmarks $104.6 million for street resurfacing construction and design. This significant investment represents an increase from the 60 miles of major street resurfacing goal in Fiscal Year 2024, to 75 miles in Fiscal Year 2025, while also funding the design work necessary to improve 105 miles in Fiscal Year 2026.


As your Mayor, I want to address the urgency of investing in our stormwater infrastructure to ensure we are keeping residents safe. We have identified funding needs for stormwater emergencies and other critical flood resilience and green infrastructure projects totaling $85.1 million. This is a substantial figure, but it's critical to ensure the resilience and safety of our city's infrastructure against future challenges. Importantly, this funding need comes in addition to our proactive investments under the Water Infrastructure Finance and Innovation Act (WIFIA). Through WIFIA, the City has the opportunity to utilize the Environmental Protection Agency’s special loan program for water infrastructure projects, covering 49% of up to $733.0 million in stormwater upgrades. These upgrades range from pipeline replacements and pump station repairs to comprehensive watershed restoration. The remainder of the project costs will be identified by the City through loans, grants, and other financing methods.


Our city needs significant investment to rebuild essential infrastructure like our stormwater systems and roads, while continuing to provide vital services that our residents depend upon daily. That's why San Diegans deserve to vote on increasing the City’s revenue in November 2024. However, it’s not simply about raising revenue; it's about unlocking the potential of our city and ensuring that every neighborhood thrives. By dedicating funds to improve essential neighborhood services, modernizing our aging infrastructure, and maintaining the safety of our families, we're laying the foundation for a more resilient and prosperous San Diego. By making the investments needed to upgrade infrastructure and address deferred maintenance, we can prevent more costly repairs in the future, saving taxpayers money over time.


As Mayor of San Diego, I'm proud to say that the dividends of our Build Better SD initiative are truly beginning to manifest. This innovative program, designed to streamline and enhance the efficiency of how we allocate Development Impact Fees (DIF), is proving to be a game-changer for our city's infrastructure development by addressing our infrastructure needs more holistically across San Diego, ensuring that funding is directed towards high-priority projects. The Fiscal Year 2025 Proposed Budget reflects this strategic shift, with an allocation of $9.6 million in Citywide DIF funds for parks projects, another $11.4 million for mobility projects, and $1.5 million earmarked for Fire-Rescue projects. Additionally, we're deploying $18.7 million in legacy DIF funds to community-based projects that will make a tangible difference in the lives of our residents. Beyond these allocations, we're also investing $13.7 million in improvements for Mission Bay Park and $7.4 million for enhancements to our other regional parks.


Continuing with my dedication to the welfare and development of San Diego's younger generation, this budget continues to maximize the "Employ + Empower" youth workforce training program. Thanks to $18.5 million in State funding for this program, we will continue to offer young individuals aged 16 to 30 the chance to engage in paid internships and job training opportunities right here with the City of San Diego. This budget includes funding for many opportunities within nearly every City department to boost youth employment and to usher in a new era of public servants who are as diverse and dynamic as our city itself. This is more than just a program; it's a pathway to empowerment for our city's youth, ensuring they have the tools, resources, and support they need to thrive and contribute to our community.


This budget is a plan for protecting our progress, addressing immediate needs while laying the groundwork for sustainable growth. We are tackling the structural budget deficit with a careful balance of reductions and investments, ensuring that our city remains vibrant and resilient. Our commitment to enhancing public services, from increasing shelter beds for people experiencing homelessness to streamlining housing development and ensuring our streets and infrastructure are robust and reliable, is unwavering. The investments we make today in public safety, infrastructure, and our youth promise to yield dividends for generations to come. As your Mayor, I pledge to continue steering our city with a vision that embraces all San Diegans, fostering a community that is inclusive, dynamic, and thriving. Together, we are building a San Diego that not only addresses today's challenges but also secures a bright and prosperous future for all.


Sincerely,


Todd Gloria

Mayor

City of San Diego Budget

The City of San Diego's Fiscal Year 2025 Proposed Budget is $5.65 billion and is comprised of five operating fund types, and the Capital Improvements Program (CIP). The Fiscal Year 2025 Proposed Budget represents an increase of $473.0 million, or 9.1 percent, compared to the Fiscal Year 2024 Adopted Budget. Increases in the General Fund are primarily associated with increased funding for wages and benefits, homelessness programs, and new facilities. The increases in the Special Revenue Funds are primarily associated with the EMS Alliance Model, and wages and benefits across various funds. The increase in the Enterprise Funds is associated with wages and benefits, cost increases to chemicals to treat water and wastewater, and debt payments. The Capital Improvements Program (CIP) includes an increase in Water and Wastewater project-related appropriations.

General Fund Revenues

The Fiscal Year 2025 Proposed General Fund revenue budget is $2.08 billion, which represents an increase of $61.2 million, or 3.0 percent, from the Fiscal Year 2024 Adopted Budget. General Fund revenues are comprised of four major revenue sources, and a series of other revenue sources, which are primarily generated by departments. The City's four major General Fund revenue sources are property tax, sales tax, transient occupancy tax (TOT), and franchise fees. These sources account for 72.0 percent of the Fiscal Year 2025 Proposed Budget for General Fund revenues and are projected to increase by $54.6 million, or 3.8 percent, from the Fiscal Year 2024 Adopted Budget. The increases in major General Fund revenues are primarily in property tax revenue of $48.8 million and franchise fee revenue of $13.4 million. Fiscal Year 2025 Proposed Budget revenues are based on projections included in the Fiscal Year 2024 Mid-Year Budget Monitoring Report (Mid-Year Report), and the 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 net increase of $6.6 million, or 1.1 percent. The increase in other revenues is associated with $13.5 million in transfers to the General Fund from the Concourse and Parking Garages Operating Fund, Community Equity Fund, Energy Independence Fund, Civil Penalties Fund, and Central Stores Fund; a $12.7 million increase in reimbursements from the Environmental Growth Funds to support eligible expenditures; $4.5 million in reimbursements for Employ and Empower Interns; $4.3 million from rents and concessions due to additional activity and rent revenue at Mission Bay hotels, Sea World, and City Pueblo Lands; and $3.3 million in additional TransNet and Gas Tax revenues. These increases are offset by a decrease of $52.1 million related to the use of one-time American Rescue Plan Act (ARPA) funds in Fiscal Year 2024.

General Fund Expenditures

The Fiscal Year 2025 Proposed Budget for General Fund expenditures is $2.15 billion, which represents an increase of $65.8 million, or 3.2 percent, from the Fiscal Year 2024 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. The critical expenditure additions primarily maintain various services, support interns through the Employ and Empower Program, enhance homelessness services, and support new facilities. In addition to these adds, there are a number of reductions that were taken to balance the budget.


The Fiscal Year 2025 Proposed Budget prioritizes funding to maintain core service levels. Expanded services include additional homelessness services and the operations of new facilities.


The list below highlights some of the General Fund critical expenditure additions.

FY 2025 Proposed Budget General Fund Critical Expenditures

Operational Efficiencies and Budget Reductions

The Fiscal Year 2025 Proposed Budget includes expenditure reductions to achieve a balanced budget for Fiscal Year 2025.


The list below highlights some of the budget reductions by departments.

Operational Efficiencies and Budget Reductions

Balanced Budget and Conclusion

The Fiscal Year 2025 Proposed Budget continues to focus on the City’s goals and maintain the City’s core city services including: public safety, homelessness programs and services, and infrastructure maintenance. This balanced budget includes funding to maintain current services, utilizing one-time and ongoing resources. Based on current projections, balancing the General Fund budget in future years and obtaining a structurally balanced budget may require additional ongoing reductions, minimizing additions, and refraining from the addition of new programs unless additional dedicated ongoing funding sources are attained. Additional details are included throughout the budget document.