Pairing Fiscal Discipline with Technology

Todd Gloria has served as mayor of San Diego since December 2020 and won reelection in 2024. A native San Diegan and former state assembly member and council president, he leads the eighth-largest city in the country, home to about 1.4 million residents, and currently serves as president of the United States Conference of Mayors.

At his State of the City address on January 15, Gloria was candid about the budget deficit surging to $258 million. He made clear that he was not content to simply accept a diminished city government and framed the shortfall as a reason to rethink how the city works. He has taken on the role of chief operating officer himself, saving on salary costs and getting direct visibility into how priorities are executed.

The city is piloting InnovateSD, a suggestion box that invites staff to submit ideas that improve efficiency and customer service or generate revenue. The mayor's message is that financial strain is an invitation to propose new ways of working.

The best example is pothole repair. Working with academic partners, the transportation department helped develop an AI model that analyzes Google Street View images to find potential potholes before residents complain, at a fraction of the cost of sensor-equipped trucks. Field crews then visit flagged locations and review photographs to train the model. Transportation Director Bethany Bezak said the city has repaired its first pothole found this way and plans to expand the effort.

Inside city hall, employees use Copilot and Gemini for daily tasks such as pulling questions from email threads, building slide decks for council presentations, and assigning tasks after meetings. The city has trained chatbots from multiple cloud vendors to search its intranet, and it is exploring AI for transcribing council meetings, processing public records requests and redactions, and answering calls on the police nonemergency line. City policy requires a human to review every AI output.

The early results have been encouraging. The city polled over 400 employees, and among technology workers, 98% reported saving time along with improved communications, accuracy, and analytics. CIO Jonathan Behnke has also been open about the risks, warning that automating entry-level work could leave junior employees without the reasoning skills that come from doing it themselves.

The council passed a $6.4 billion budget in June that includes more than $132 million for the Department of Information Technology, which manages 15,145 devices, 721 applications, and 1,231 servers for over 14,000 internal users. Behnke serves on the board of the GovAI Coalition, and the city recently completed a post-quantum cryptography preparedness project that inventories its critical applications.

In July, Waymo announced a new testing phase that will bring autonomous ride-hailing vehicles to parts of the city, including Pacific Beach.

The technology agenda has also drawn scrutiny. San Diego's smart streetlight and license plate reader network expanded after Gloria took office, and the city's Privacy Advisory Board twice recommended against renewing the contract. Council President Sean Elo-Rivera criticized $2 million in the budget for AI surveillance of residents, while Gloria defended the spending, citing declining crime rates and the city charter's public safety mandate. The disagreement has made San Diego a national reference point for how cities weigh surveillance tools against privacy oversight.

Gloria's May budget revision closed a $118 million gap while restoring library and recreation center hours in historically underserved districts, funded by a modest rise in tourism revenue. For cities facing their own shortfalls, San Diego offers a working example of pairing fiscal discipline with technology, directly asking staff and any consultants for ideas, keeping humans in the loop, and accepting public arguments over where the limits should sit.

This webinar explores how unified visibility across devices, applications, and user experience helps IT leaders prioritize investments, respond to issues before they escalate, and stretch limited resources. Speakers include Dan Gohl, chief technology and strategy officer for US SLED at HP, who will share how visibility supports modernization and improves experiences for employees and constituents. Attendees of the live session receive a complimentary certificate of attendance. Details →

This regional summit at the Grand Prairie Events and Convention Center convenes public-sector leaders from across North Texas to address challenges in cybersecurity, AI, data governance, and digital service delivery. Sessions are designed to spark insight and foster collaboration, pairing strategy discussions with actionable guidance that attendees can apply in their own agencies. Registration is free and open to public sector attendees. Details →

The report examines how government agencies can pair automation with cost control as AI investment in the sector grows at an estimated 19% compound annual rate through 2027. Citing a Deloitte analysis of more than 19,000 government tasks, the report finds that automation can save between 75% and 95% of time spent on functions such as drafting reports and routing documents, but warns of a cost paradox in which one midsize state agency saw its monthly AI bill triple after automating benefits-eligibility queries. The report identifies aging infrastructure, disconnected data, escalating cloud spend, compliance obligations, and the skills gap as the main barriers and argues that open-source tools, small language models, and federated learning offer agencies a path to lower costs without moving sensitive data. Read →

State health and human services agencies are managing Medicaid redeterminations, payment errors, workforce shortages, rural access gaps, and aging systems as separate crises. HHS 2030 argues that these pressures should instead shape a common long-term plan for technology, staffing, program integrity, and citizen self-service. The risk is that agencies continue funding isolated fixes without defining the system they want in place by 2030.

Angelina Panettieri walks through how reliable internet access and accessible online platforms have become essential for communities and covers federal measures, such as the American Broadband Deployment Act, that aim to accelerate infrastructure expansion. The conversation also covers new web accessibility rules that are shaping how governments design and deploy digital services so that no resident is left out.

Was this email forwarded to you? Subscribe here to get Fractional Leader delivered to your inbox every Tuesday & Thursday.