The Budget Cycle
Beginning in September and concluding in July, the annual budget cycle can be divided into three major stages:
Budget Preparation: Budget development and submission to the Board of Supervisors.
Approval: Budget review and enactment by the Board of Supervisors, budget signing by the Mayor.
Implementation: Department execution and budget adjustments.
The City’s budget process begins in September with preliminary revenue projections for the upcoming budget years. In December, the Mayor’s Office and the Controller’s Office issue budget instructions to departments, which contain detailed guidance on the preparation of department budget requests. Departments then prepare their budget requests and submit them to the Controller by mid-February. The Controller consolidates, verifies, and refines the departments' proposed budgets, and turns the proposals over to the Mayor's Office of Public Policy and Finance. From March through June, the Mayor’s Office analyzes each budget proposal, examining policy and service implications in order to meet citywide needs and reflect the Mayor’s goals and priorities for the upcoming year. Concurrently, the Mayor conducts budget outreach to obtain feedback from the community on budget priorities and to ensure the budget reflects the City’s collective priorities and voices.
The Mayor presents her balanced budget proposal for Enterprise departments on May 1 and for all other City departments on June 1. The Board of Supervisors Budget and Finance Committee holds public hearings on the budget in May and June, and makes recommendations for approval and any changes on the budgets to the full Board. The entire budget is heard and must be voted on and approved by the full Board of Supervisors by August 1st. Finally, the budget returns to the Mayor for her approval and final passage.
In November of 2009, voters passed Proposition A, which amended the City Charter to require the city to transition to a two-year budget cycle for all departments by Fiscal Year (FY) 2012-13. In FY 2010-11, the City adopted two-year budgets covering FY 2010-11 and FY 2011-12 for four early-implementation departments: the Airport, the Municipal Transportation Agency, the Public Utilities Commission, and the Port Commission. FY 2012-13 was the first year that all City departments submitted a two-year budget for FY 2012-13 and FY 2013-14. Also for the first time this year, the four early-implementation departments mentioned above will have a “fixed” two-year budget. This means these departments will only amend their budget next year if revenues or expenditures are five percent above or below projections. All other departments will still have a variable two-year budget for a few more years while they adjust to the new system. The two-year budgets are developed, approved, and implemented pursuant to the same process as the annual budgets.