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San Francisco Environment Department approves draft FY21 operating budget despite projected shortfall
Summary
The commission voted to approve the Department of the Environment's draft FY2020-21 operating budget. Staff said revenue is projected at about $21.4M to $22.3M with a current net shortfall of roughly $865,000 driven by the loss of two large grants; the department will submit a balanced AO/AAO package to the mayor by Feb. 21.
The San Francisco Commission on the Environment voted on Jan. 28, 2020 to approve the Department of the Environment's draft operating budget for fiscal year 2020-21 and to forward a balanced submission to the mayor's office.
Joseph Salem, the department's fiscal manager, told commissioners the department's operating-expenditure budget for FY21 stands at about $22.3 million. He said the city is projecting a combined general-fund deficit of about $419 million over FY21 and FY22 and the mayor's office has directed general-fund departments to reduce ongoing expenditures by 3.5% for FY21 and another 3.5% for FY22. While the Environment Department is not a general-fund agency, Salem said non-general-fund departments still face cost pressures and must absorb certain increases.
Salem identified a current operating revenue shortfall of about $865,000. He attributed most of the department's drop in operating revenue to the elimination of two large grants that previously funded pass-through project work: a roughly $6 million Energy Watch grant and a roughly $2.7 million California Air Resources Board electric-vehicle grant. On the expenditure side, he said most of the lost grant funding covered professional services and pass-through purchases rather than core department salaries.
Commissioners asked for detail on departmental program budgets and revenue composition; Salem said the draft operating budget's revenue mix is approximately 56% impound, 28% grants and 16% work orders from other city departments, with a small amount of fee revenue tied to specific programs. Commissioners expressed concern about the loss of energy-efficiency funding and encouraged staff to pursue alternate revenue sources and partnerships.
The operations committee recommended the draft budget for full-commission approval. Commissioner Stevenson moved to approve the draft FY21 operating budget and Commissioner Ahn seconded; the commission approved the motion by voice vote.
Salem said the department will continue to analyze expenditures, pursue grants and partnerships and present a finalized balanced AO/AAO submission to the mayor on Feb. 21.
