Mayor Lee Signs City’s Balanced Budget for Fiscal Year 2014-15 & 2015-16
City Budget Grows Economy, Creates Jobs, Invests in Housing, Transportation Infrastructure & Education at Historic Levels, Strengthens Public Safety & Protects Social Services for Residents Most in Ne
Mayor Edwin M. Lee today signed the City’s two-year balanced budget for Fiscal Year 2014-15 and 2015-16 after the Board of Supervisors’ unanimous final approval yesterday to close the budget deficits of $66.7 million in FY 2014-15 and $133.4 million in FY 2015-16. To deliver this two-year consensus budget, Mayor Lee worked closely with the Board of Supervisors and heard directly from residents and community leaders in their districts, held an online budget town hall, and met with hundreds of residents, nonprofit organizations, City Commissioners, labor organizations, business owners, and advocates to discuss priorities and address concerns.
“Working together, we are growing our economy, creating jobs and making sure that our City remains affordable for low and middle income families,” said Mayor Lee. “This fiscally responsible balanced budget protects social services for residents most in need, makes historic investments in housing, transportation and education, increases City services including public safety, supports our continued economic recovery, and is affordable over the long term. Thank you to Budget and Finance Committee Chair Supervisor Mark Farrell for leading this effort, and thank you to the entire Board of Supervisors for delivering a consensus driven, responsible balanced budget for the residents of our great City.”
“As Chair of the Budget and Finance Committee for the past two years, I believe it is critical to collaborate and work with my colleagues, the Mayor’s Office, Department Heads, the community and all others involved to develop a consensus budget,” said Supervisor Mark Farrell. “Doing so has allowed us for two years running to pass a budget that reflects the priorities and values of both the Mayor and the Board of Supervisors, but most importantly – of San Francisco.”
“Just a few years after a serious economic downturn, I’m proud that smart fiscal policies and a job-creating economy have helped us craft a healthy and balanced two-year budget that makes crucial investments in affordable housing, public safety, the livability of our neighborhoods, and other key areas,” said Board President David Chiu. “Mayor Lee, Budget Chair Farrell, my colleagues at the Board of Supervisors, hundreds of City staff and thousands of engaged residents deserve credit for securing the vital services that San Franciscans rely on every day to live, work and raise their families here.”
The City’s budget reflects responsible funding decisions that invests in people who live, work and visit San Francisco; protects the social safety net and supports seniors, youth and residents who need it the most; invests in housing, transportation and affordability for low-income and working class families; and supports the City’s critical infrastructure and thriving diverse neighborhood corridors.
Housing Opportunities for All San Francisco Residents
Earlier this year, Mayor Lee set an aggressive goal to complete 30,000 new and rehabilitated homes by 2020, with at least one-third of those permanently affordable to low and moderate income families. Two years ago, San Francisco voters created the Housing Trust Fund to create a $1.5 billion dollar stream of funding for affordable housing for low- and middle-income residents over the next 30 years. To do more, in addition to the $44.4 million from the Housing Trust Fund, the City’s budget includes $50 million in additional new funding to expedite affordable housing projects over the next two years in this budget. These funds represent a significant infusion to fill gap funding on projects and seed new projects throughout San Francisco. In addition to creating more housing for low- and middle-income residents, this budget focuses on re-envisioning and transforming public housing sites, reducing obstacles and red tape that slow down construction, and continuing funding for eviction prevention and rapid re-housing.
Service Increases to Make San Francisco More Livable
The City’s budget increases City services to the public. Reliable, quality public service is an important aspect of how San Franciscans feel about living in the City. Over the next two years, residents will see a 10 percent service increase at Muni, to address crowding and reliability. In addition, building on the progress the City has made with the Road Repaving and Street Safety Bond, this two-year budget fully funds San Francisco’s street repaving program, which will repave 1,700 blocks over the next two years. The budget also expands services at Public Works and the Recreation and Park Departments to keep City streets cleaner, maintain the City’s trees, and promote public safety throughout the parks and open space.
The budget continues to fund the City’s six-year public safety hiring plan to train the next generation of public safety personnel. Over the next two years, San Francisco will hire 300 new police officers, 96 firefighters, 30 paramedics and 10 911 dispatchers to enhance community safety.
Maintaining and Improving Our City’s Social Safety Net
Many of the City’s most vulnerable residents are also in need of additional social services. This budget reflects this need by funding an additional $56 million over the next two years to stabilize and transition struggling individuals and families towards self-sufficiency, including:
• $24.7 million in increased investments in homeless and eviction prevention, in shelter and in other homeless supports, and in supportive housing for veterans, transitional aged youth, and families;
• $6.2 million in enhanced mental health services for the chronically homeless;
• $5.0 million in investments for seniors including additional food security and meal support as well as investments to prevent and address elder abuse; and
• $20.8 million for aid programs at the Human Services Agency.
In addition, the proposed budget includes the full restoration of $3 million annually in Federal cuts to HIV/AIDS prevention and services, and $8.8 million to the Department of Public Health’s continuum of mental health and substance abuse treatment services.
The budget includes a 1.5 percent cost-of-doing-business increase for nonprofit contractors to ensure the continued delivery of quality, effective services in the face of rising costs. Over the next three years, the City will also disburse $4.5 million in nonprofit rent stabilization services and launch a nonprofit sector initiative to provide strategic, technical assistance to ensure long-term stability and viability of the nonprofit sector.
Safe, Reliable, and Affordable Transportation
San Francisco needs a transportation system that serves the needs of all users by providing efficient and low-cost travel options to the public. The San Francisco Municipal Transportation Agency’s (SFMTA) proposed FY 2014-15 and 2015-16 budget addresses this need through a combination of service increases, reliability improvements, and reduced or free fares for targeted populations. The SFMTA’s proposed budget includes funding for a 10 percent service increase over the next two years to add additional hours of service while addressing crowding and reliability issues. These increases will result in service that is more frequent, rapid, and dependable.
Additionally, the City’s budget includes full funding of $83.5 million over the next two years for the City’s street repaving program. Paving in excess of 1,700 blocks over the next two years will continue to move our streets towards a “good” Pavement Condition Index (PCI), which will prevent more expensive street repaving costs in the future, reduce repair expenses for Muni, and lower car maintenance costs for San Francisco drivers. These investments will help ensure that the City’s transit system is faster, more accessible, and reliable for the long term. The budget also includes $3.7 million in additional funding for Vision Zero safety projects to eliminate traffic-related deaths in San Francisco.
Investing in Children and Families
This November, the reauthorization of the Children’s Fund and the Public Education Enrichment Fund, which provide significant support to San Francisco’s children and families, will be on the ballot. The FY 2014-15 and 2015-16 proposed budget assumes reauthorization of these measures and includes $291.1 million between the two funds, of which $126.3 million will be in direct funding to the San Francisco Unified School District; $55.9 million for Preschool for All, which will provide 4,100 children with subsidized, quality early education; and $108.9 million will flow into the Children’s Fund.
The City’s budget also supports the Mayor’s Summer Jobs+ initiative, which will help 7,000 young San Franciscans get a job or paid internship in the public, private, or non-profit sectors. For many of these low-income and disconnected San Francisco youth, this is their first professional experience.
Long-Term Financial Sustainability
The City’s budget balances the need for increased and enhanced services for City residents with the need to ensure long-term financial stability. Coming to agreement with our labor unions, making strategic one-time investments in capital and information technology, and maintaining strong reserves are all part of this approach to fiscal discipline.
As a result, this budget prioritizes smart investments that save the City money in the long run while reducing long-term financial obligations, including:
• $647.5 million in capital investments over the next two years, supporting approximately 6,000 construction and related industry jobs;
• $213 million in General Fund support for capital and infrastructure, including full funding of the recommended level in the first year of the budget; and
• $32.7 million in General Fund Investments for information technology systems to improve the way the City does business.
In addition to making strategic one-time investments, this budget also continues to grow the City’s reserves to offset the impact if an economic downturn does occur. Consistent with the City’s Financial Policies, the City’s reserves for economic stabilization will also grow over the next two years. By the end of FY 2015-16 the City projects to have $235.1 million across its General Reserve, Budget Stabilization Reserve and Rainy Day Reserve. These reserves function as the City’s savings account; protecting the City’s budget and service levels from economic uncertainty. In 2013, the ratings for City’s General Obligation bonds were upgraded by Standard & Poor, Fitch, and Moody’s; all three agencies noted the City’s strong financial performance, growing reserves, and increasingly responsible financial practices as the reasons for their upgrades.
In February 2014, the City began negotiations with 27 of its employee organizations to craft new labor contracts. The new contracts cover over 24,000 employees for the next three years. With a few small exceptions, the agreements include raises of 3 percent in October 2014, 3.25 percent in October 2015, and between 2.25-3.25 percent (depending on inflation) in July of 2016. These settlements provide a fair wage increase for the City’s workforce and provide better financial stability for the City in the form of known labor cost increases for the next three years.