Controller reports $32.7 million midyear improvement; departments show mixed surpluses and shortfalls

Michelle Laersma of the Controller's Office presented the six-month budget status review and said staff now project a $32,700,000 increase in the current-year projected ending balance compared with the prior forecast. Laersma attributed gains to stronger-than-expected property transfer-tax receipts and improved concession revenue at the airport, and said some of those gains are offset by the prior inclusion of FEMA reimbursement revenue in the earlier projection.

Laersma identified departments with surpluses — notably public health and the Human Services Agency — and those with shortfalls, including the Police and Fire departments where a supplemental appropriation remains pending at the Board of Supervisors. She said the controller's office is projecting approximately a $12,000,000 workers' compensation shortfall citywide and that recent COVID sick-leave extensions could generate additional overtime and backfill costs in the $10 million–$20 million range depending on usage.

On the use of emergency funds, staff said $2,000,000 was shifted from the COVID emergency budget to Tenderloin emergency purposes, used to cover costs associated with a linkage center. Laersma said the controller's office will continue to refine projections in the March update and the nine-month report and offered to provide a multiyear reserve table on request.

The committee filed the six-month report after questions about contingency plans for department overages and the origins of recent revenue gains.