San Francisco Mayor London Breed is asking city department heads to submit proposed budget cuts by June 12. (Chris Victorio|Special to S.F. Examiner)

San Francisco Mayor London Breed is asking city department heads to submit proposed budget cuts by June 12. (Chris Victorio|Special to S.F. Examiner)

Breed orders departments to make 15 percent budget cuts to close deficit

Supes raise concerns about impacts on mental health services

In about three weeks, San Francisco department heads must submit to Mayor London Breed plans to slash their budgets by a total of 15 percent over the next two fiscal years to help close a more than $1 billion deficit caused by economic impacts of the coronavirus.

Breed directed departments this week to come up with the cuts to offset the latest deficit projections, which show a $1.7 billion deficit through June 30, 2022.

Departments have until June 12 to submit their plans with “clear, written description of service and staffing impacts of reductions,” according to the budget instructions.

They must reduce their budgets by 10 percent next fiscal year and by an additional 5 percent in the subsequent fiscal year, for a total of 15 percent. However, Breed may ask for the 5 percent cut to happen next year and not the subsequent year if budget projections worsen.

Ashley Groffenberger, deputy budget director in the Mayor’s Budget Office, told the Board of Supervisors Budget and Appropriations Committee Wednesday, “We recognize that 10 to 15 percent reductions will come with incredibly difficult tradeoffs.”

“We’ve advised departments that those reduction plans can include contract savings, reductions in personnel cost — either through the elimination of vacant positions, continued salary savings due to hiring freeze — or project suspensions,” Groffenberger said.

Breed has already implemented a hiring freeze, which will continue at least until the end of next fiscal year, although there are exceptions for workers needed for COVID response and for other “essential” workforce.

Many boards and commissions that oversee city departments are not meeting due to the coronavirus pandemic and would need special permission from Breed or the Board of Supervisors to meet. Mayoral spokesman Andy Lynch told the San Francisco Examiner Wednesday that meetings will be authorized to accommodate review of the budget proposals.

“Given the importance of these budget discussions, we plan to issue permissions to relevant commissions giving them approval to meet to discuss their revised budget submissions,” Lynch said.

Members of the budget committee expressed concerns Wednesday about how cuts could impact mental health services and about what will happen to plans to launch Mental Health SF, an at least $100 million a year program meant to reform behavioral health services.

Supervisor Rafael Mandelman said there was a broad consensus reached over “the desperate need for more places for people” in need of mental health services and help for substance use disorders.

“We can’t just retrench,” Mandelman said. He called on the Mayor’s Office and the Department of Public Health “to figure out ways, through all this cutting, to either unlock some additional resources for placements or think about how to do placements differently.”

Supervisor Hillary Ronen said there is a need to reimagine Mental Health SF, which she helped pass.

She suggested it may need to roll out in two phases with “a second phase of it as we come out of this recession.”

“We need to reenvision this,” Ronen said, adding that she is not expecting to have the $100 million needed to fund the program as previously expected.

In addition to the cuts, department heads must reimagine how their agencies function in the coronavirus era, where social distancing and staying at home are the best ways to reduce the risk of becoming infected.

Department heads are tasked with figuring out which employees can work from home, which services must be handled in person, how that can be done safely and what services should be moved online.

Because of the timing of when the pandemic took its toll on the economy, The City has pushed off by months its usual timeline for the budget process.

Instead of Breed having to submit a proposed city budget by June 1 to the Board of Supervisors for review and adoption, she will now submit it by Aug. 1.

Breed instead will introduce an interim budget on June 1 to carry over departments’ operations until the budget is approved by the board.

The mayor is scheduled to sign the budget into law on Oct. 1, after the board’s budget committee holds hearings through the month of August and ultimately votes to approve it in September.

The interim budget will cover the months from July 1 through October and “will largely be a status quo budget” to maintain existing services until the final budget is adopted, Groffenberger said.

“Largely, the big policy choices that we need to make to close the shortfall will be discussed in August,” Groffenberger said.

The deficit breaks down to $250 million in the current fiscal year and $1.5 billion in the upcoming two fiscal years.

As the next step in the budget process, Breed is expected to announce next week is the plan to close the $250 million budget deficit in the current fiscal year.

Supervisor Sandra Lee Fewer, chair of the budget committee, said she will hold a June 3 hearing on Breed’s plan to close the current fiscal year deficit and a hearing on June 10 to discuss the interim budget.

jsabatini@sfexaminer.com

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