Supes are told to do better as city’s budget is created

The City Controller’s Office presented the San Francisco Board of Supervisors with a number of recommendations Monday that outline ways its members can improve their role in the reliably fraught annual city budget process.

In addition to floating often overlapping suggestions, like improving communication among the throng of city employees who have a hand in crafting the budget each year, the controller’s report also recommended restructuring what’s called the “add-back” process, in which the supervisors haggle — sometimes argue heatedly — over a pool of funds they can spend in their own districts.

The controller’s report was compiled from the responses of 33 individuals involved in passing the city’s $10.1 billion budget last year who were surveyed on how the supervisors’ involvement in the budget process could be improved.

Those who responded to the survey included representatives of the supervisors, the mayor’s office and other city departments, labor organizations, nonprofit groups, and members of the business community. The survey was commissioned in July by Supervisor Malia Cohen, chair of the budget committee, in the wake of a bruising budget season laced with an unusually high amount of tension and political friction.

Cohen also has requested that the budget and legislative analyst prepare a more quantitative assessment of how other large California cities pass their budgets, in an effort to glean best practices from other municipalities.

“The controller’s survey has demonstrated that our existing budget process lacks clarity,” Cohen said Monday. “We need to start the dialogue earlier in the year, to debate policy priorities openly, and make a board-level commitment to understand how department and community demands align with those priorities.”

While a third of the survey’s respondents said the supervisors did a good job of making themselves accessible to the public and inviting wide participation in the budget process, 75 percent said the board was falling short when it comes to making that process adequately transparent. Some 35 percent also said that last year’s budget process was strained by a rash of last-minute decision-making.

“A common refrain among respondents was that the close of the board’s budget process felt rushed, with key steps occurring late in the process and late into the night,” the report said.

That complaint came into sharp focus around the supervisors’ addback process. Every year, the city’s pool of add-back funds is determined after the budget analyst’s office combs through the budget and recommends cuts, primarily from departments with leftover money from staff attrition or positions that have gone unfilled. That money — which totaled $46 million this year — is then “added back” into the budget, and supervisors have broad discretion on how it is spent.

The money is sent to city agencies who contract with nonprofits and other organizations administering a range of social service programs. Despite being seen as essential for funding crucial services, the process of distributing the add-back funds has long been criticized as being messy and opaque, with arguments stretching in the small hours of the night with little public oversight.

Notably, the report found that, in recent years, the board has increased the number of individual add-backs and decreased their average value, “a trend that indicates the board is increasingly allocating funds for more narrow purposes,” the report said.

In all, 45 percent of the survey’s participants said the board’s addback process was in need of improvement. The controller’s report recommended beginning add-back discussions earlier and placing the funds in “larger buckets rather than narrow allocations” to “reduce the perception that funds are being allocated to specific organizations.”