San Francisco, CA— Mayor Edwin M. Lee today presented his proposed two-year balanced budget for Fiscal Year (FY) 2016-17 and 2017-18. The budget for the City for FY 2016-17 and FY 2017-18 is $9.6 and $9.7 billion, respectively. Half of the budget consists of self-supporting activities at the City’s Enterprise departments (the Port, Municipal Transportation Agency, Airport, Public Utilities Commission and others), while the remaining half consists of the General Fund, which supports core services such as Public Health, Police, Fire, and Recreation and Parks.

“City government has an important role to play in making the lives of all people better, and residents will see even more investments to improve quality of life in every neighborhood,” said Mayor Lee. “These good economic times represent a significant opportunity for us to ensure that San Francisco is a safe, vibrant City that invests in our diverse neighborhoods and builds stronger communities. I view this submission of a no cuts, balanced budget as a first step in a collaborative process, and I am proud of what we have accomplished so far to keep our City safe, successful, and resilient. I look forward to working with the Board of Supervisors to deliver a budget that invests responsibly in the residents and small businesses of San Francisco.”

“As Chair of the Budget and Finance Committee for the fourth year, I look forward to working closely with our neighborhoods and my colleagues on the Board over the coming weeks to discuss, strengthen, and approve a City budget that reflects the true shared priorities and values of all San Franciscans,” said Supervisor Mark Farrell. “I thank Mayor Lee and his budget team for presenting a balanced City budget that makes key investments in the quality of life, public safety, and homelessness to keep our City moving in the right direction.”

Since Mayor Lee took office in 2011, he has worked tirelessly to bring the City back from the depths of the Great Recession, and used its recent prosperity to tackle its most pressing challenges. As the City nears full-employment, the economy reflects the Mayor’s unrelenting focus on strengthening our workforce and increasing employment opportunities for all San Franciscans. With a strong economic foundation, Mayor Lee has invested like never before in affordable housing, transportation, public education, public safety, and quality of life in neighborhoods, all while maintaining record reserve levels and achieving the highest credit rating in the City’s history. San Francisco has led the nation in developing a Housing Trust Fund, increasing the minimum wage, re-envisioning the Housing Authority, and making Muni free for low-income seniors, youth, and people with disabilities. This budget continues those efforts.

The City and County of San Francisco is a major employer, and as in prior years, approximately half of the City’s budget will be spent on staff to provide core City services. The proposed budget includes funding for approximately 30,800 employees, representing a 4.1 percent growth in the labor force over the previous year. This is largely due to continued implementation of the Mayor’s six-year public safety hiring plan at the Police and Fire departments; opening of the new Zuckerberg San Francisco General Hospital; and continued implementation of the Municipal Transportation Agency’s largest service increase in decades.

This year, the Mayor focused on three main areas in the budget: homeless, violence prevention and police reforms, and quality of life in neighborhoods. Additional details on the budget include:

Homelessness & Supportive Housing
The Mayor’s proposed budget includes the new Department of Homelessness and Supportive Housing (DHSH), which will launch on July 1st. The new department will aid Mayor Lee in achieving his goal to help at least 8,000 people permanently exit homelessness by 2020. DHSH will achieve this through increased coordination of, and investment in, the City’s nationally recognized outreach, intervention, and supportive housing services. The Department will build a Navigation System that maximizes existing resources, strategically invests in creative and innovative programs, and effectively matches each individual with the services they need. DHSH will combine key homeless-serving programs and contracts currently housed across several City departments and provide assistance and support to homeless and at-risk youth, adults, and families to prevent episodes of homelessness and end homelessness for people in San Francisco. The Department’s budget will be $221 million and include 107 positions in FY 2016-17.

DHSH’s work plan will focus on three key areas: interventions, exits, and families. The proposed budget includes funding for additional interventions, including a third Navigation Center, increased services and hours of operation in the existing shelter system, expanded medical services for residents in permanent supportive housing, increased mental health services, and additional staff for the Homeless Outreach Team. Success of the interventions is dependent on the provision of exits to housing, and the new department will provide funding for those exits, including over 300 permanent supportive housing units in FY 2016-17, additional housing subsidies for seniors, and backfilling of U.S. Department of Housing and Urban Development (HUD) cuts to existing transitional and permanent supportive housing providers.

Family homelessness will be a high priority for DHSH, and the proposed budget includes increased support to family shelter providers, continuation of the current year expansion of rapid rehousing vouchers, and funding for the implementation of the Mayor’s Family Homelessness Working Group.

Violence Prevention, Police Reforms & Public Safety
The Mayor’s proposed budget includes a $20 million comprehensive reform package that invests in violence prevention programs and funds reforms at the Police Department to build greater trust between police officers and the community with increased oversight, transparency, and accountability.

The new funding is first and foremost for violence prevention efforts that are proven to work and show results for the City’s residents most at-risk of entering the criminal justice system. The proposed budget includes an investment of $11.4 million over two years to strengthen communities impacted by violence and provide training, opportunity, and alternatives to communities to prevent violence from occurring in the first place. It includes $3.1 million to create and operate the African American Violence Prevention Collaborative, a community-driven systems reform initiative dedicated to transforming the health and safety outcomes of disconnected African American youth up to 24 years of age in San Francisco. It will cultivate capacity in organizations to deliver culturally competent services to at-risk and violence impacted individuals and communities. In addition, the proposed budget will provide pathways to permanent employment for high-risk young adults by expanding the successful IPO Employment Program to serve individuals up to the age of 35. Additionally, recognizing that violence prone neighborhoods tragically suffer higher rates of homicides and shootings, the budget includes a 20 percent increase for the City’s crisis response system to expand its capacity to provide critical services.

Over the next two years, $4.6 million will be invested to fundamentally re-engineer the way police officers use force. The additional training for police officers will focus on implicit bias, cultural competency, and crisis intervention while enhancing police reforms underway. A key training program, Blue Courage, will offer a series of courses designed to cultivate an internal cultural change within the department by emphasizing the trust and honor of law enforcement officers. In addition to the training dollars, the City will invest in capital, equipment, and the building of less-lethal options for the San Francisco Police Department. This investment provides critical funding to enhance de-escalation techniques utilized by frontline law enforcement officers. The budget also fully funds the Department’s Body Camera Program over the next two years, which will equip every patrol officer with a body worn camera.

Departmental oversight will be increased with $1.8 million in new funding for the Office of Citizen Complaints (OCC) over two years, which will support a 25 percent increase in investigators, ensuring a timely and thorough response to every officer involved shooting.

Improving the Quality of Life in Neighborhoods
Unique and diverse neighborhoods are what make San Francisco a wonderful place to live, and the Mayor’s proposed budget includes funding for services to support the new, neighborhood-based Fix-It Teams with the strategy of “See it, Fix it.” As City workers observe improvements or clean-ups that need addressing or people that need help, interdepartmental teams will fix what they can on the spot, and call for additional resources as needed.

Investments that improve quality of life in our neighborhoods include more than $6.1 million in new funding for enhanced street cleaning across the City, and two new Pit Stops to expand the program to 15 locations. With the addition of 30 staff and 6 new steamer units, Public Works will remove over 2,000 additional tons of garbage from City streets over the next two years.

Mayor Lee’s six year police hiring plan, which is now fully funded over the next two years, will accelerate hiring to increase the number of police officers in neighborhoods. The City plans to add two more police classes in the current year, for a total of seven. This is in addition to the three planned classes in FY 2016-17 and another two in the following year, putting the City on pace to meet its goal of 1,971 sworn officers by 2017.

Our parks and libraries serve as hubs of activity and community building in our neighborhoods. The Mayor’s proposed budget includes over $29 million for capital investments in Recreation and Parks playgrounds, parks, and facilities. Over the coming year, the Library will expand service hours at 14 neighborhood branches, increasing their hours from 45 to 50 hours per week (a five percent increase system wide). The expanded hours of operation will provide additional library services and programs for approximately 300,000 residents, including 49,000 youth residents.

A Compassionate City
San Francisco is a compassionate City that cares about inclusiveness and providing opportunities for all its residents to succeed. The Mayor’s proposed budget includes the following investments that embody these values:

• More than $2.5 million in new funding over the next two years to create, develop, and implement the San Francisco Legacy Business Program, which was approved by voters last November. The goals of the Legacy Business Program are to stabilize, strengthen, and sustain longtime San Francisco small businesses, especially those that have played a big part in the City’s local economy, diversity, and history.
• The City will invest $6 million in programs over the next two years to strengthen the nonprofit sector. This investment includes an unprecedented $4.3 million to create a Nonprofit Space Investment Fund for the acquisition of permanent affordable space, $1.3 million to launch a Nonprofit Space Stabilization Program to address nonprofit sustainability, and $0.3 million to support planning and evaluation for long-term partnerships such as program expansions or shared administrative staff.
• The budget assumes passage of a November ballot measure to set-up the Dignity Fund, dedicating an additional $6 million of existing revenues in FY 2017-18 for this purpose. Additionally, the budget includes over $3 million in new General Fund support in FY 2016-17 to pilot a home care subsidy program and senior employment program; continues and expands meals programs; and supports for people with disabilities transitioning back into the community from institutional care settings.

A Resilient and Responsible City
Although the City’s economy is strong, it is important to take responsible steps now to ensure stability over the long term. The Mayor’s proposed budget does just that by making a number of strategic investments:

• The proposed budget does not draw down on any reserve funds. By the end of FY 2017-18, the City projects $380 million, or eight percent of General Fund revenues, will be placed in reserve funds, available to smooth out revenue losses during an economic downturn. These reserves function as the City’s savings account, protecting the City from economic uncertainty and helping continue to strengthen San Francisco’s credit rating.
• The General Fund capital, information technology (IT), and equipment budgets will be fully funded mostly without the use of debt. Paying in cash today reduces long-term financing costs and is less expensive overall.
• Over the next two fiscal years, the City will invest $262.5 million in capital funding, $52.2 million in IT, and $45.5 million in equipment purchases through the General Fund.
• Additionally, included in the Mayor’s equipment budget is a historic $14.3 million investment in critical first responder equipment for the Fire Department that represents the first two years of funding for a long term apparatus replacement plan, similar to the five year hiring plan. Over the next two years, the funding will enable the acquisition of 13 fire engines, 4 aerial ladder trucks, and 8 ambulances.

The City Charter requires the Mayor submit a balanced budget proposal by the first working day in June. To deliver this two-year consensus budget proposal, Mayor Lee worked with the Board of Supervisors and heard directly from community leaders and residents, and met with hundreds of residents, nonprofit organizations, City Commissioners, labor organizations, business owners, and advocates to discuss priorities and address concerns. This year, in addition to having conversations with community stakeholders, Mayor Lee developed an online budget education website to make the budget process more accessible to San Franciscans. Mayor Lee will continue to work with the Board of Supervisors to develop the best possible balanced budget for the City and County of San Francisco over the next month.

The Mayor’s proposed balanced budget for Fiscal Year 2016-17 and 2017-18 is available online, go to: sfmayor.org/index.aspx?page=880.