Planning Department warns of $3.7 million fee shortfall, proposes furloughs and staff reassignments

A presentation to the San Francisco Planning Commission on Dec. 4 laid out a rapidly changing revenue picture for the Planning Department and upcoming choices about staffing and long‑range work.

Alicia Jean Baptiste, planning department staff, told commissioners that building permits and environmental review make up roughly three‑quarters of the department’s fee revenue and that the department is highly sensitive to shifts in the real‑estate cycle. Early data show a sharp decline in application volumes: building‑permit volume in the first quarter was about 19% lower than the same period last year and environmental review filings are down roughly 60% from a few years ago, staff said.

Based on current trends, the department projects an $3.7 million fee revenue shortfall for this fiscal year—about an 18% gap relative to the fee budget—and a further multimillion‑dollar uncertainty for the next fiscal year depending on whether application declines continue. To address the gap, staff proposed a package of revenue and expenditure measures. Revenue steps include tighter time‑and‑materials billing, reassessing undervalued project valuations and collecting delinquent accounts, and using a deferred‑credit account to fund some refunds. Expenditure steps favor reducing compensation costs while minimizing layoffs: staff identified roughly $500,000 of salary savings by not filling positions, voluntary one‑week unpaid time (estimated $250,000 if universally adopted), and about $200,000 from position reclassifications or substitutions. There are also planned layoffs and unfilled vacancies to achieve additional savings.

David Allenbaugh, who presented changes to the citywide long‑range planning work program, said staff have reprioritized projects so mandated or high‑priority work continues while some studies and lower‑priority items are deferred. The department reported moving roughly 6.3 full‑time equivalent (FTE) positions onto new funded work while putting about 3.3 FTE of work on hold, producing a net staffing gap that will require further choices.

Commissioners asked about the role of the general fund, possible use of impact or grant funding to smooth cycles, and whether major pipeline projects could be accelerated to generate fee revenue. Staff said the general fund currently covers only a limited set of activities (code enforcement, certain legislative tasks) and that long‑term policy discussions are needed about whether the general fund should pay more of long‑range planning. Staff also noted some positions remain critical to operations and that the director has decided to fill a small number of key posts (assistant director, chief of neighborhood planning and select transportation planners) even as other positions are deferred.

Staff emphasized a preference to preserve core institutional capacity so the department can deliver mandated programs and respond quickly when the development market recovers. The commission did not take a vote on specific cuts during the presentation; staff said formal budget actions will come later in the city budget process.

The presentation and discussion are likely to inform upcoming budget hearings and the department’s follow‑up on options to stabilize fee revenue between cycles.