‘Padded budgets,’ overtime debate set tone for mayor’s budget review

In an unusual move, six city departments nearly had their increased overtime spending blocked by the progressive bloc on the Board of Supervisors.

Amid criticism of a “padded” city budget full of “magic money,” a handful of board members threatened to not authorize spending some $25 million in overtime costs incurred by six city departments, which had exceeded what was budgeted at the beginning of the fiscal year. The spending included $7.9 million for the embattled Police Department.

(Click here to view the calendar of the upcoming Board of Supervisors Budget and Finance Committee hearings on Mayor Ed Lee’s proposed two-year city budget.)

Initially supervisors John Avalos, David Campos, Malia Cohen, Jane Kim, Eric Mar and Aaron Peskin voted against the funding, signaling next month’s review of the mayor’s budget may be more contentious than previous years with the new progressive board majority.

“They need to live within their means and not give us crap to approve,” Avalos wrote in a text message to the San Francisco Examiner immediately following the vote during Tuesday’s board meeting. “The [Board of Supervisors] needs to work harder to take the fat out of the budget. We’ve been rubber stamping the mayor’s budget for years.”

But the vote soon attracted a lot of attention, prompting the board to revisit the proposal later in the meeting.

The Mayor’s Office and the board’s Budget and Finance Committee Chair Supervisor Mark Farrell argued the board should reverse its position and approve the spending. If not, they argued, the city departments wouldn’t be able to spend any more overtime for the rest of the fiscal year — which would adversely impact emergency services like police, fire and 911 response.

“The impacts would be really serious,” said Melissa Whitehouse, Mayor Ed Lee’s deputy budget director.

Avalos modified the proposal to approve the overtime spending of $4 million for the Fire Department, $1.3 million for the Department of Emergency Services and $8.4 million for Sheriff’s Department, but stood firm on opposing the spending for police along with the $2.3 million for the Department of Public Health and $575,000 for the Public Utilities Commission.

It didn’t help that the police’s overtime included expenses incurred when The City hosted the controversial Super Bowl 50 event this past February, an event Avalos and his political allies have decried as a bad deal for The City.

In the end, Avalos only had the support of supervisors Jane Kim, Aaron Peskin and David Campos, and the total $25 million in overtime was therefore approved.

The accuracy of budgets is important because annually the board members comb through the mayor’s budget proposal looking for savings to reallocate for their own spending priorities, which are often services for San Francisco’s most vulnerable residents.

But if departments’ “squirrel away money” that means less transparency and oversight and other needs may lose out.

“When we get to the tail end of the year, we have all this magic money that appears in our department budgets,” Avalos said, describing the budgets as “padded.”

While the departments didn’t exceed their total budgets, they required board approval to shift unspent money that was previously designated for other uses, like positions that went unfilled.

The debate has ramped up the political pressure on Farrell as budget chair. “I understand the comments that were made around this item,” Farrell told the board. “As your chair of the budget committee I certainly do not want to have any padding going on in our budgets at all.”

The more moderate Farrell has chaired the budget committee in the past but during an era when the board lacked a progressive majority. The debate Tuesday indicates this will be Farrell’s most challenging year as chair to date as he now faces more progressive than moderate supervisors on the board.

Mayor Ed Lee must submit his proposed two-year city budget to the board for view by June 1. Seven days later the committee will begin its public hearings on the budget proposal.

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