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SF’s Budget Includes ‘Enterprise Departments’. Here’s What That Means
Monday, July 04, 2022

SF’s Budget Includes ‘Enterprise Departments’. Here’s What That Means

A guidebook for city managers describes San Francisco’s government as “like a giant jigsaw puzzle.” The city’s six enterprise departments make up a huge chunk of the puzzle, and up to half of the city’s multibillion-dollar budget.

The San Francisco Municipal Transportation Agency, the San Francisco International Airport, the San Francisco Public Utilities Commission, and the Port of San Francisco are four large agencies that are most recognized as enterprise departments. The Recreation and Parks Commission and the Fine Arts Museums Board of Trustees are also in this category, but their budgets are far smaller. 

Much like a business enterprise, SF’s enterprise departments earn revenues by charging fees for services: examples include Muni fares and water charges. That revenue is restricted in how it may be spent, and largely flows back into funds to support their own departments. They also have their own budget timelines and commissions that decide on spending. 

On May 2, Mayor London Breed submitted the first of two budget books that lay the groundwork for the city’s annual budgeting process. Here’s a look at the proposed budgets for each of the four major enterprise departments, and what role they play in the city. 

Public Utilities Commission

What do they do? The third-largest municipal utility agency in California, the SFPUC makes money by selling utility services, including electric power, water, and wastewater services, to customers both in the city and regionally. It also manages large wastewater and water supply systems that include tunnels, pipelines, treatment facilities and the Hetch Hetchy reservoir.  

What’s their budget like? 

  • SFPUC is requesting a $1.65 billion budget for fiscal year 2022-23 and $1.69 billion for fiscal year 2023-24.
  • Covid had mixed effects on the agency, with water revenues up slightly and power revenue up, but only because of association with carbon credits. Power sales volume actually went down. 

How are they governed?

  • The Public Utilities Commission is a five-member body that tends to attract heavy hitters: current commissioners include former Supervisor Sophie Maxwell and former Labor Council President Tim Paulson. The Commission president is Anson Moran, a former general manager. 
  • The agency was ensnared in the bribery scandal around former Department of Public Works director Mohammed Nuru and developer Walter Wong, forcing the resignation of General manager Harlan Kelly in November 2020.
  • Last year, former City Attorney Dennis Herrera was appointed to replace Kelly. 

What else should I know? 

  • San Francisco is one of a handful of cities that maintains a combined sewer and storm drain system. SFPUC promotes this as being more sustainable because stormwater, street runoff, and sewage are all treated together. 
  • SFPUC delivers drinking water to almost 3 million customers throughout the Bay Area, with service to San Francisco property owners and wholesaling to 26 regional customers. The agency lauds its drinking water, from Sierra Nevada snowmelt and regional reservoirs, as among the purest and greenest available, as it comes from a mostly gravity-fed system.

Municipal Transportation Agency

What do they do? Pretty much anytime you step outside in San Francisco you interact with SFMTA. The agency is best known for the Muni system, which operates a diverse fleet of over 1,100 transit vehicles ranging from buses to cable cars. The agency also designs, builds and maintains San Francisco street and related infrastructure

What’s their budget like?

  • SFMTA is proposing budgets of $1.4 billion for fiscal year 2022-23 and $1.47 billion for fiscal year 2023-24.
  • The agency suffers from a historic structural deficit which could run up to $76 million by 2025. In past years this has resulted in deferred maintenance, especially impacting Muni service. 
  • Covid drastically cut into SFMTA’s typical revenue streams, bringing a sharp drop in fare revenue that is not expected to fully recover for years. Transit service was scaled down, and safe street activation programs such as Slow Streets cut parking revenue. 
  • On the other hand, federal and other relief provided an opportunity to perform needed maintenance and restore efficient service. 

How are they governed?

  • SFMTA has a seven-member Board of Directors, appointed by the mayor and confirmed by the Board of Supervisors, which sets policy and approves the budget. 
  • The Supervisors pay close attention to appointments, and have recently rejected appointments and reappointments based on their own priorities. 

What else should I know?

San Francisco International Airport

What do they do? SFO handles the largest number of air passengers in the Bay Area and is the second-largest airport in the state after the Los Angeles International Airport. It also hosts a globally significant aircraft maintenance facility, serving United Airlines along with forty other carriers.

What’s their budget like?

See Also
  • SFO has submitted a budget of $1.16 billion for fiscal year 2022-23, a $16 million decrease over the previous year. The fiscal year 2023-24 budget then increases by almost $152 million to $1.31 billion
  • The Covid-19 pandemic severely depressed passenger levels, which are still less than half of pre-pandemic levels. In fiscal year 2021-22, the airport lost close to $20 million in parking revenue and $80 million in concession revenue. Full recovery is expected to take “several years,” according to the May budget book. 

How are they governed? 

  • The Airport Commission has five members, appointed by the mayor and with similar profiles to SFPUC commissioners. The current commission president is Eleanor Johns, a former chief of staff to former mayor Willie Brown
  • Former commissioner Linda Crayton resigned from the commission in 2020 after being named in the ongoing Public Works scandal. She did not accept any payment and was not charged with a crime

What else should I know?

  • In March, SFO funded a trip by Mayor London Breed to several European cities to drum up tourist travel business. 
  • The airport hosts a small but significant museum and library

Port of San Francisco

What do they do? The Port of San Francisco manages 7.5 miles of bayside waterfront property in the city, from Fisherman’s Wharf to India Basin in the Bayview. While cargo facilities remain at Piers 80 and 92-96, much more of the agency’s portfolio is devoted to managing property for other uses, including real estate development. Other active maritime uses include cruise ship and regional ferry terminals. Attraction sites include Fisherman’s Wharf, Pier 39, and the Exploratorium.

What’s their budget like?

  • The Port has submitted budgets of $193.2 million for fiscal year 2022-23 and $149.1 million for fiscal year 2023-24.
  • The pandemic cut Port revenue by 40% due to loss of retail and cruise business.

How are they governed? 

  • The Port has a five-member commission, appointed by the mayor and confirmed by the supervisors. Like with SFO and SFPUC, the seats attract policy veterans with previous commission or legislative experience. 
  • Former Congressman and State Senator John Burton is a Port Commissioner.

What else should I know?

  • An exemplar for future use of port property is the Pier 70 project, where a ship repair facility site will be redeveloped into office and residential uses. 
  • The Port maintains engineering staff and has partnered with the Army Corps of Engineers to protect the waterfront from earthquakes and sea level rise due to climate change. To that end, a $425 million general obligation bond to shore up the city’s seawall was approved by voters in 2018. 
Mike Ege can be reached at [email protected].

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