Six Enterprise Departments Invest in Infrastructure, Jobs and Highlight City Budget Reform Measures

05/02/11— Mayor Edwin M. Lee today presented his proposed balanced budget for six City departments totaling $1.6 billion. The initial proposed budget that is due on May 1st every year focuses on six enterprise departments, which are agencies within City government that generate their own revenue or are funded with special funds, rather than by general fund revenues.

“This May 1st budget proposal focuses on our enterprise departments and is the first step in crafting a balanced budget for the coming year that will keep our City safe, solvent and successful,” said Mayor Lee. “There is much more work to be done in the coming weeks. While our economy is slowly stabilizing after the sharp downturn over the past several years, we must continue working to steer the City back toward long-term economic and financial stability. Investments in transportation and infrastructure, utilities, the Airport and the Port are critical for creating thousands of jobs today and critical for our City’s tomorrow.”

The City departments included in this May 1st proposed budget are critical to the short-term and long-term economic health of the City. These enterprise departments include:
· Airport
· Board of Appeals
· Environment
· Port
· Public Utilities Commission (PUC)
· Rent Arbitration Board

The funding in this proposed budget will be used to protect San Francisco’s water supply after a major earthquake, invest in our Airport as an economic engine for visitors and business travelers, and continue the revival of our eastern waterfront, including laying the foundation for the 34th America’s Cup, an international sailing event that will be hosted in San Francisco in 2013. These investments will also provide much-needed jobs for city residents as we struggle to emerge from the economic downturn. Over the next two years, these departments will support 3,200 jobs in San Francisco by infusing $487 million into our local economy through capital projects. These infrastructure investments will provide an opportunity to implement our new local hire ordinance, which will ensure construction and trade jobs funded with City dollars are used to hire local residents.

A Safe City. Ensuring our City is safe is a principal responsibility of government. In this budget, we propose a series of projects that will enhance the safety and security of much of the City’s infrastructure. The Public Utilities Commission proposes spending $316 million over the coming two years to maintain and improve the water, wastewater and power resources for the City. These investments are in addition to two major, multi-year capital programs to seismically strengthen our water and sewer systems, ensuring a reliable water supply and quick recovery after the next major earthquake. Additionally, this budget includes the first phase of San Francisco International Airport’s 10-year, $206 million investment in the development of the Runway Safety Area Plan. The Port of San Francisco will continue to invest in the seismic safety of our waterfront piers and facilities, and our waterfront facilities to improve safety and detect possible terrorist activity. A safe city also refers to our City’s social safety net. We must provide a basic level of support and services to youth, families, seniors and others who need them most.

A Solvent City. While we continue to invest in our infrastructure, a familiar financial picture is evident in this proposed budget: if we do not take action to address our growing pension and benefit liabilities, the rapid growth in our employee costs will soon restrict our ability to make the investments our City needs for the future. Next year, employee benefit costs will grow by $27 million for these seven departments alone. Over the next five years, citywide pension costs will approach $800 million. This growth in costs means less funding is available for seismic safety improvements and upgrades to infrastructure needed to keep our economy competitive. To address this issue, Mayor Lee has been working closely with City employees to develop a pension reform proposal for the November 2011 ballot that will help reduce costs while providing a dignified retirement for public servants.

A Successful City. A successful city is one that creates an exciting, unique and enjoyable environment for its residents and visitors. Despite our economic challenges, we know San Francisco can continue to be successful. In this budget, we will begin the investments needed to host the America’s Cup in 2013. This event will bring in an estimated 250,000 visitors to the City, and generate more than $1.4 billion in economic activity to support local businesses.

“This budget is not about making new promises; it is about fulfilling the promises we’ve already made,” said Mayor Lee. “This budget reflects the City’s second year of two-year budgeting for our largest enterprise departments, and we will also issue the first draft Five-Year Financial Plan for San Francisco. We need to shift to a longer-term view of our City’s finances, and begin to think practically and strategically about the steps we need to ensure San Francisco remains the exciting, diverse city we love.”

The Mayor will submit a balanced budget for the City’s General Fund departments to the Board of Supervisors on June 1st, which will close a $306 million General Fund budget deficit.

The Mayor’s proposed May 1st Balanced Budget is available online, go to: http://sfmayor.org/index.aspx?page=5