The San Diego City Council approved a $3.8 billion budget Monday that triples spending on infrastructure projects.
The city swelled infrastructure spending to $559 million while shouldering increased pension costs without affecting core services restored in recent years, according to the mayor’s budget message.
Mayor Kevin Faulconer called the budget a big down payment on the city’s future as it maintains key services while making the “largest infrastructure investment in city history.”
Faulconer plans to sign the budget Wednesday without line item vetoes at the Chollas Operations Yard.
The infrastructure spending targets street repairs, sidewalks, park projects and building maintenance.
The city's pension payment has increased to $324.5 million, a $63 million increase from fiscal 2017. The general fund’s share of the pension payment is $236.4 million, increasing $45 million, which exceeds the projected growth in major general fund revenues for fiscal year 2018.
The increase principally stems from changes in actuarial assumptions calculated by the San Diego City Employees’ Retirement System’s independent pension board. These changes include projected longer lifespans for retired employees and lower-than-expected investment returns in the past fiscal year.
The city tapped its new pension reserve fund and excess risk management reserve balances along with slight budget reductions from all operating departments to cover the pension costs and adopt a balanced budget.
The budget adds another $28.3 million for police recruitment and retention.
The City Council approved a plan in October to increase compensation up to 36% over the next two years to help fill 200 open positions in the San Diego Police Department. The mayor announced in January a national recruiting campaign with the aim of fully staffing the department in two years.
Fitch Ratings analysts said in an October report the substantial salary hike wasn’t likely to have budget implications.
The City Council restored cuts made in the mayor's original budget proposal allocating an additional $2.3 million for streetlights, $882,000 for tree trimming, $300,000 for graffiti abatement, $555,000 more for brush management and funded five additional code compliance positions.
City Councilman Scott Sherman called the restored spending and the addition of $835,000 for repairs to the Chicano Park Community Center and the Mira Mesa Teen Center a case where city leaders “always seem to find the money for hungry, hungry hippos so council members can chew away at things they want in their communities,” according to City News Service.
Sherman wanted the city to instead to pay off city debt ahead of schedule. The city has $2.1 billion in outstanding long-term debt, according to budget documents.
The additional spending was offset by $1.8 million in excess equity in the current budget and shifting $3 million in capital resources, according to the mayor’s office.
Reserves are funded to policy target levels. The budget also pre-funds the fiscal year 2019 general fund reserve target of 15.25% with an additional $10.3 million contribution and allocated $3.5 million to the pension stabilization reserve.