San Francisco Government SmartTranscripts:

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Good morning. The meeting will come to order. Welcome to the January of the Budget and Finance Committee. I am supervisor Connie Chan, chair of the committee, and I'm joined by vice chair supervisor Matt Dorsey and member supervisor Danny Souter. And our clerk, it's Brent Halipa. I would like to thank sue ethnos from sf gov tv for broadcasting this meeting. Mr. Clerk do you have any announcements?

[Brent Jalipa (Committee Clerk)]: Thank you madam chair just a friendly reminder to those in attendance to please make sure to silence all cell phones and electronic devices to prevent interruptions to our proceedings. Should you have any documents to be included as part of the file, they should be submitted to myself, the clerk. Public comment will be taken on each item on this agenda. When your item of interest comes up and public comment is called, please line up to speak on the west side of the chamber to your right, my left, along those curtains. And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the tray by the television to your left by the doors if you wish to be recorded for accurately recorded for the minutes. Alternatively, you may submit public comment in writing in either of the following ways. Email them to myself, the budget and finance committee clerk at brent.jalipa@sfgov.org. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. You may also send your written comments via U. S. Postal Service to our office and city hall at 1 Doctor Carlton be go to Place Room 244 San Francisco California 94102 and finally madam chair items acted upon today are expected to appear on the board of supervisors agenda of February 3 unless otherwise stated. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you mr clerk and just a general reminder for everyone and in the pop for the public that for any items on our agenda that have budget and legislative analyst reports we will go to the department presentation first and then we will go to the budget and legislative analyst and then this body will ask questions and comment then we will go to public comment and so with that Mr. Clerk please call item number one.

[Brent Jalipa (Committee Clerk)]: Yes item number one is a resolution authorizing the city and county acting by and through the mayor's office of housing and community development to execute a standard agreement with the California department of housing and community development or h c d for a grant awarded in the amount of 1,500,000.0 under cal h c d's pro housing incentive program except and expand anticipated revenue of pip grant funds in the amount of 1,500,000.0 for the period effective upon the execution date of the standard agreement through 06/30/2029 and authorizing mo c d to enter into any additions amendments or other modifications to the standard agreement and any pip documents that do not materially increase the obligations nor liabilities to the city or materially decrease the benefits to the city. Madam Chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have the mayor's office of housing and community development here.

[Sheila Nikolopoulos (Director of Policy, Mayor’s Office of Housing & Community Development)]: Good morning and Sheila nikolopoulos director of policy at Mayor's Office of Housing and Community Development. Before you today is a resolution authorizing MOHC to accept and expend $1,500,000 grant from the State Department of Housing and Community Development's Pro Housing Incentive Program. The California Pro Housing Designation Program is a state run initiative by HCD designed to incentivize local governments to go above and beyond baseline law and streamlining housing production. It was established through the California's twenty nineteen-twenty Budget Act, and it recognizes cities and counties that exceed state housing requirements by, for example, expanding zoning, reducing development hurdles, lowering costs, and subsidizing housing. And these pro housing jurisdictions earn priority in state grant programs and unlock access to these funds, the Pro Housing Incentive Program, which provides additional funds to help speed up affordable housing production and preservation. San Francisco received its pro housing designation from the state in October 2024, which acknowledges our policies such as inclusionary zoning and no minimum parkings. This grant will help reduce the city's contribution towards affordable housing. The pro housing funds will be used to support the construction or rehabilitation of a project in MOHC's pipeline. When we applied for the funds in December 2024, we anticipated using the funding for senior housing at 97 Mission. But due to changes in the financing of that project and the timing of this grant, we now anticipate using the funds for 835 TERC, which is a building with 106 affordable units. Although using the funds for 835 TERC is tentative because we're still pending notification of several other state funding resources. So a decision about which project will receive the funds will be made in the next few months,

[Eric Manke (Office of the Treasurer & Tax Collector)]: and the grant funds will be spent within five years. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I don't have any other questions. I don't see any name on the roster. Let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes. We're now opening public comment for this item number one, if we have any members of the public who wish to address this committee. Madam chair we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no public comments public comment is now closed. Supervisor Dorsey I see that you're a cosponsor to the legislation what is your will for the item?

[Supervisor Matt Dorsey (Vice Chair)]: Thank you chair Chan I would like to move that we send this item out to the full board of supervisors with our positive recommendation.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And with that a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion by vice chair Dorsey that we refer this resolution to the full board with the recommendation vice chair Dorsey. Aye. Dorsey aye. Member Sauter. Aye. Chair Chan. Aye. Chan aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. Thank you and with that mr. Clark please call item number two.

[Brent Jalipa (Committee Clerk)]: Yes, number two is an ordinance amending the business and tax regulations code to revise how access line tax applies to voice over internet protocol services to require collection and remittance of the alt and VoIP services through the lower of the number of telephone numbers provided to a subscriber and the number of calls that the subscriber can make and or receive at the same time using those telephone numbers. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have the office of treasurer and tax collector.

[Eric Manke (Office of the Treasurer & Tax Collector)]: Good morning chair tann supervisors I'm eric manke with the office of treasurer and tax collector I' presenting for your approval an ordinance that makes a targeted and technical change to how San Francisco' access line tax applies to voice over internet protocol services or VoIP services. By way of background the access line tax is a per line tax imposed on subscribers to telephone communication services in San Francisco and applies to each access line within the city' jurisdiction. The tax is collected from the subscriber by the service provider and then remitted to the city. An access line is broadly defined and includes the assignment of a 10 digit phone number and under existing law the tax applies to each telephone number. However voice over internet protocol or VoIP providers often provide customers more 10 digit numbers than customers can use to make or receive calls at the same time so this ordinance revises the application of the tax to VoIP services requiring the collection remittance based on the lower of either the number of 10 digit phone numbers or the number of calls that can be made or received on those numbers. So for as an example under existing law if a service VoIP service provider provides a customer with 100 telephone numbers but the customer can only make 25 calls or make or receive 25 calls the tax would apply to all 100 telephone numbers. Under this ordinance the access line tax would apply to the 25 access lines based on the number of calls that can be made or received. So that's the technical change that would be made. So with that, I'll conclude, I'm happy to take any questions.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Could you walk us through what is voice over internet?

[Eric Manke (Office of the Treasurer & Tax Collector)]: Yes. So VoIP is basically the ability to make phone calls over the internet instead of over traditional phone lines. No expert on it, but that's my general understanding of it.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Like, if I may, if it's okay. Yeah. I'm not trying to single out or any companies. It's it's something like would it be anything that is, like, on an app that you can make calls over like be it Yes. I don't know like WeChat, Signal, Google, and all sorts and

[Eric Manke (Office of the Treasurer & Tax Collector)]: Yes. That would be because the voice is being carried over the internet versus a traditional telephone line. I think generally that would be referred to as VoIP or voice over internet protocol services.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And are we currently collecting tax like for the voice over internet?

[Eric Manke (Office of the Treasurer & Tax Collector)]: We are collecting the tax, yes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And so how would this would this change oh, would this change, how would it in our projection of collecting that tax revenue?

[Eric Manke (Office of the Treasurer & Tax Collector)]: We do not project since this is very targeted and technical, we do not project there would be a significant revenue change, not even to the level of requiring a BLA report.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Understood. And so then why is it necessary? I'm I know I'm the cosponsor of this legislation. I think I'm I'm trying to help us understand, like, this is super technical in my opinion. So I I'm just trying to help all of us to walk through like why would this be necessary and how is this in the best interest of the city.

[Eric Manke (Office of the Treasurer & Tax Collector)]: It's a modernization and provides more flexibility.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: To the category of identifying the voice Internet like company. The companies are telecom telecommunications companies are actually using to codify and clarify how we as a city tax any telecommunication companies that are currently being taxed and utilized and operates under voice over internet. You.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Thank you.

[Eric Manke (Office of the Treasurer & Tax Collector)]: Sure, sure. No problem.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: I just want to have you also validating what I'm saying. That's all. I appreciate it. Thank you. And I don't have any additional questions. Let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Thank you. So, if we have any members of the public who wish to address this committee regarding this item number two, that was your opportunity? Madam Chair, we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and seeing no public comments and public comment is now closed. Colleagues I would appreciate for your support and would like to move this item to full board with positive recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to forward this ordinance to the full board with positive recommendation vice chair Dorsey.

[Jacob Bintliff (Office of Economic & Workforce Development)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey aye. Member sotter aye. Chair Chan

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: aye.

[Brent Jalipa (Committee Clerk)]: Chan aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. Thank you Mr. Clerk please call item number three.

[Brent Jalipa (Committee Clerk)]: Yes item number three is a resolution approving amendment number one to the agreement between the city acting by and through the department of public health and health right three sixty to provide withdrawal management and resident tenant treatment services to extend the term by two years from 06/30/2026 for a new term of 07/01/2024 through 06/30/2028 and to increase the amount by approximately 28,600,000.0 for a new total not to exceed amount of approximately 38,500,000.0 and to authorize dph to enter into amendments or modifications to the agreement had to not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of this agreement or this resolution. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have department of public health here.

[Kelly (Director of Substance Use Services, DPH Behavioral Health Services)]: Good morning supervisors my name is Kelly I am the director of substance use services for behavioral health services. The department of public health seeks approval to extend this agreement with health right three sixty for withdrawal management and residential treatment services. These programs are critical components of San Francisco's behavioral health continuum allowing us to serve our most vulnerable residents. This amendment extends the term by two years from 06/30/2026, to 06/30/2028, for a total of four years. The amendment would increase the not to exceed amount by $28,600,000 bringing the total contract to 38,600,000.0. Just a little bit about what the services include, so the these first slides here are photos of acceptance place which is located at 890 Hayes Street. We are contracted to fund 10 beds here. Acceptance Place is focused on providing residential services for gay, bisexual, transgender men with substance use disorders. The average stay is approximately thirty to ninety days, but is based on medical necessity. And in last fiscal year, they served 53 clients. Next slide. These next photos here are of the withdrawal management services that are provided at 815 Buena Vista. The contract provides for 20 funded beds for clinically managed residential withdrawal management services for adults experiencing withdrawal symptoms. The program also provides incidental medical services. The stays are short term ranging from about five to seven days And in fiscal year twenty four-twenty five, they served seven ninety three clients. This next slide is just a summary of the details that I just explained. So in closing, the next slide, DPH agrees with the BLA recommendations and respectfully requests approval. These services are essential for stabilizing individuals in crisis and supporting recovery of LGBTQ communities. It also allows us to fulfill our obligation to DHCS to provide an organized delivery system, the full continuum of care. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: You.

[Nick Menard (Budget & Legislative Analyst’s Office)]: Morning. Nick Menard from the Budget Legislative Analyst Office. Item three is a resolution that approves an amendment to a TPH contract with Health Right three sixty. The amendment extends the agreement through June 2028 and increases the value to $38,600,000 The agreement funds two drug treatment programs, a withdrawal management program, and a residential drug treatment program. We show the performance of programs on page five of the report. They are both meeting the obligations of the contract. And we show the budget for the contract on page six. This is about a $10,000,000 a year set of programs, 80% of which is funded by the general fund. And we also note in our report that the bed rates in this contract are slightly higher than DPH bed rates for similar services and that the extension is short. It's only about two years to allow TPH to reprocure the entire portfolio, which will allow them to harmonize bed rates across their system of care. We recommend approval of item three.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I am in support of this, but certainly I will go to public comment for now. Let's go to public comment for now.

[Brent Jalipa (Committee Clerk)]: Yes, we're opening public comment for this item number three. If we have any members of the public who wish to address this committee? Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no public comments public comment is now closed. I want to make sure I wouldn't claim expertise sort of this area around public health. I just want to see if Vice Chair Dorsey, what is your will on this particular contract amendment?

[Supervisor Matt Dorsey (Vice Chair)]: I do support it. I actually know some I know people who have benefited from these programs. And I know that there can be frustration sometimes with the amount of money that we're spending on these. But this is ultimately about withdrawal and recovery. And one of the good things to remember about the biggest problem that we're facing in drug policy today, which is fentanyl, is that opioid use disorder does have gold standard strategies and medications that can really help people get on the other side of their addiction and maintain their recovery. Often, it's the maintenance that is the problem. And I think this is the right approach. I know that sometimes people this does cost a lot of money. One of the things that I would say is the alternative is more expensive. So I'm going to support this. And I would move that we send this to the full board with our positive recommendation.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I concur with the sentiments. I think that what I do hope to continue to see is for Department of Public Health to continue. And of course, I'm sure we are already and that there's clearly, the federal government is posing a challenge for us. I would definitely want to see the Department of Public Health continue to push against the federal government and to provide additional funding. Right now, it's 16% of the program that is coming from the federal funding. I like to see more of that coming from our city. But that's the case, like, across all programming that I I seek and encourage, strongly encourage, Department of Public Health to seek the federal and state support, and I would like to see that continue. And so with that, roll call, please, on the motion.

[Brent Jalipa (Committee Clerk)]: And on that motion by vice chair Dorsey that we refer this resolution to the full board with recommendation vice chair Dorsey. Dorsey aye member sotter aye chair Chan

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: aye

[Brent Jalipa (Committee Clerk)]: we have three

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: ayes The motion passes. Thank you. Mr. Clark please call item number four.

[Brent Jalipa (Committee Clerk)]: Yes item number four is a resolution approving the tenth amendment to the contract between the municipal transportation agency and tegs co llc for services related to the towing storage and disposal of abandoned and illegally parked vehicles to increase the contract amount by 22,100,000.0 for a total contract amount not to exceed 158,800,000.0 and to extend the contract term by nine months with up to six additional one month extensions for a potential new term of 04/01/2016 through 06/30/2027 effective upon approval of this resolution. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have sfmta here.

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: Good morning, Madam Chair, members of the committee. Rob Malone, senior manager in the Streets Division of the SFMTA, with a responsibility over the towing contract with TEXCO. What's before you today is a proposed tenth amendment to this contract that, as noted in the intro, would extend the agreement by up to fifteen months and would increase the spending authority by $22,100,000 to $158,800,000 This would increase the total term from the inception to eleven years and three months, which is why we are here with you today for seeking your approval. Next slide, please. A quick review of the history. Our contract with Texco began 04/01/2016. There was a five year extension uptake that extended the term to its allowable maximum through March. At that time, the extension increased the contract from its original $65,400,000 to $136,700,000 Next slide, please. Again, before you today, the tenth amendment would extend by fifteen months and $22,100,000 Next slide, please. Break the numbers down a bit within the tenth amendment, and a little opening the door on that total fee a little bit. This contract with the vendor is composed of two primary components. You know, 60 about two thirds or a little less of the cost is within what we call the fixed management fee. This is a fee for all sorts of things, for all the customer service staff that is provided by the vendor, software licensing, management of the two tow yard locations, payment processing, management of lean sales, etcetera. This is a fixed cost. So regardless of or these are the monthly fixed costs that's the same regardless of how many vehicles are towed in a given month. The remainder of the fees are variable fees that are by the piece and that vary based on how many actual tows happen per month. So to break down what's requested within the tenth amendment, it was $22,100,000 About $5,600,000 of that is projected to be needed to complete the current fiscal year 'twenty five-'twenty six. And then, through a request for an additional $16,500,000 that would be a spending authority that would allow the contract to go as far as the maximum allowed fifteen months proposed in the amendment. And that gets you to the total of $22,100,000 Next slide, please. A primary reason that we are requesting this extension is, along with a couple other areas in the agency, we, given the very challenging budget times that we are in, there's pretty much a comprehensive review of every program in the agency. How is it being provided? Where are there efficiencies available that we could gain that would allow us to potentially save money while also delivering still a high value of service. So, our strategy for that within this program was to plan for a more robust competitive solicitation process that actually started with a request for information that was issued to the industry in July, in which the vendor community was asked for their input regarding the most efficient methods for rescoping the very detailed scope of work requirements in our contract for their advice on the most efficient ways to trim the existing scope of work to gain some efficiencies while still providing the best possible service we can. Next slide, please. We received a couple responses to that RFI with some good information. We are incorporating that feedback into the development of a request for proposals that's nearing completion. We are planning to bring that request for proposals format to our MTA board for their approval sometime in the early part of this year, With the overall goal of saving 10% within that to clarify, within that fixed monthly fee portion, our goal is to save 10% in that monthly portion versus what we are paying today. That is the end of my presentation. I'm, of course, happy to answer your questions.

[Nick Menard (Budget & Legislative Analyst’s Office)]: Item four is a resolution that approves an amendment to MTA's agreement with TexCo. The amendment extends the agreement through June 2027 and then increases the value by $22,100,000 to $158,800,000 We show the contract budget on page 15 of our report. And on page 16, we also discuss that this is one component of the towing program. Other costs include MTA's own enforcement costs and rent for two parking lots where the vehicles that are towed are stored. And so in fiscal year twenty four-twenty five, the fee revenue did not cover the full cost of these operations. There was a deficit of about $8,400,000 driven by waivers for low income people and for the police department. Those net costs are funded by MTA transit revenues. We recommend approval of item four.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I oh, Supervisor Sauro.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Thank you, Chair. Just a quick question a couple of quick questions on this. So TEGsco, they are operating the facilities. Are they doing any of the towing? Or what role do they play in terms of, like, actually the tow trucks?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: Sure. Thank you. Texco is an overall management company. So Texco operates both the impound yard on Bayshore Boulevard and the short term stores location on 7th Street in the city. But they are just management and have all the kind of operational staff, customer service staff. All of the actual towing is done by subcontractors.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: And in terms of those contracts that we have with those companies, are you going through a similar RFI process? Or do you anticipate going through a similar RFI process with those companies?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: Specific to the tow subs themselves, frankly we hadn't. But we certainly can do some outreach with them directly.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: And then just kind of thinking ahead in terms of some of the options that came out in this RFI for reducing costs, do you foresee the consolidation of two facilities to one being feasible?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: I think it would be a significant challenge. But we have been asked to at least do the cost benefit feasibility on that. So it's potentially feasible, but has some really significant challenges to it.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: And then one last question. I know it kind of gets into a different topic. But one of the other suggestions, limiting the number of times someone can receive a low income discount. Do you have a sense of how often that's happening? I mean, I think are people doing this five, ten times? Is there truly no cap to that program?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: There is truly no cap right now. We absolutely have done deep dives on that data. And there are you know, it's not a huge number percentage wise of people that are exercising those waivers multiple times. But they're absolutely you know, and to be clear, we tow around 40,000 vehicles a year. And to I apologize, I don't know the exact numbers. But let's say we issued 10,000 of those waivers last year, which probably in the ballpark. There's a couple 100 folks in there who have exercised that waiver six, eight, 10 times.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: So

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: we are looking at it and in coordination with our partners at the police department as well to look at the pros and cons of potentially limiting that because there's some significant concern from police and also SFMTA enforcement about that the way it is right now, it's kind of there's a perverse incentive for folks. And both they, those law enforcement folks, and we get feedback from other stakeholders with concern about why do I see this same vehicle it's gone, and then it's back. It's gone, and then it's back, and then it's gone, and then back. So our goal is to just analyze how much financial impact there would be to potential alterations of that, whether it's a limit of one or two or what have you. It could be different things. At the moment, we're just in the stage of analyzing what we think, as the program staff, the financial impact would be. And others are weighing in, again, with the MTA leadership regarding the policy and political implications of different options.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Very good. Thank you.

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: You're welcome.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. And I think building on top of what Supervisor Sauter was indicating, you know I think here in the bla report indicated there's a significant increase of tolling for unlicensed and suspended vehicles in here in this chart it's 112% increase I'm also just trying to understand how this actually related to the most recent passage of the RV, like large over large size RV vehicle toll policy with the two hours. How has that been in terms of from SFMTA with this contractor, and then also in coordination with Department of Homelessness and Supportive Housing, Enforcement, and Towing?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: Sure. So I'll be happy to answer the portion of your question that I have direct knowledge of. Just so Madam Chair and members are aware, I do have a colleague here from Department of Emergency Management who's actually managing that overall program that we are helping to implant. If you happen to have any broader questions, he said he'd be happy to answer them. The impact on the towing vendor this contract that we're here today has been somewhat significant in implementing this new policy. Just to clarify, it's not just when we say the large vehicle program, there's the large vehicle program. And when you say that, when I hear that, I hear the permit program. Where folks have, working with those other agencies that you mentioned, have been issued these permits so that they can stay on the street until they potentially accept housing. There's another element of this new ordinance, which is actually just enforcing the two hour parking restriction for large vehicles for anyone. And there's impacts on towing of both of those things. And I would say to date, the larger impact has actually been from just enforcing the two hour restriction across the city at all. So it has resources have been had to be rejiggered a little bit in terms of I don't speak on behalf of SFMTA enforcement staff. However, I'm aware that they've had to do some little bit of reprioritizing their staff and how it's being deployed day to day, because we are part of the team who is implementing this very high priority program of the mayors. So it's being handled within the typical day to day operation of the program, starting from how MTA enforcement is being deployed. But then our vendor, of course, as they do every day, they just implement tows that are requested by law enforcement, either PCOs. All our vendor is doing is just towing vehicles that have either been sighted or on those few vehicles to date I think it's only been it's been around 10 or so, and it's ramping up vehicles of folks within that permit program who have agreed to relinquish their vehicle when they accept housing.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Yeah. I guess let me ask more specifically about the towing of the RVs or large vehicle. I totally understand there's a permitting process going on and still underway. And but simultaneously if there's the enforcement and I think that's specifically asking about the enforcement related to towing not necessarily just citation has with the passage of large vehicle enforcement towing enforcement or allowable tow has have you seen an increase of large vehicle towing under the circumstance under the new passage of law?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: Yes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And how significant is that?

[Rob Malone (Senior Manager, Streets Division, SFMTA)]: It's ramped up. I don't have the exact numbers off the top of my head, but it has ramped up significantly. We'd be happy to follow back up with you and share the kind of incremental data of that.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Yeah. So I want to parse out. Today's question is I a it's not a contracting question from this body that's clearly what I'm asking is a towing policy question so on a contract itself I am supportive of expanding extending it for another fifteen months so that you can complete the, request for proposal process so that there's a competitive bidding process that we have agreed that it's it's almost ten years of a contract with this existing contractor. It is time for us to for SFMTA to go through the competitive bidding process. So I can understand it would require another fifteen months and and require an extension. And I appreciate the fixed rates management fee to kinda keep the cost, consistent for that for the next fifteen months. I appreciate. So the contract itself, I have no problem with. I think that today, I would love between this time to as we potentially, if this pass out of this body to full bore, I would like to understand have a better understanding about, similarly, the projection of actual tolls. There is not such a category here in the bla report but I would like to understand the large vehicle toll that was actual similarly to the category in the bla report of page 17 is that there's a category for actual twenty four-twenty five and then a projection of for twenty five-twenty six or year to date, I should say, and then also the projection. So that kind of help us understand the whether what is the change of toll for the RV or large vehicle. With that, thank you, and let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes, members of the public, I wish to address this committee regarding this item number four. Now is your opportunity.

[Eliana Binder (Glide; End Poverty Tows Coalition)]: Morning supervisors. Eliana Binder with Glide and the N Pavritos Coalition. I understand this is an extension and not the upcoming new RFP for the towing contract but I wanted to lay out some of the broader concerns with sfmta's towing contract and the fact that the mta loses money on the towing program overall in part due to this towing contract San Francisco has the highest towing costs in the country starting at $675 within the first four hours and quickly rising to over $1,000 after several days. The MTA could save money on towing if it deprioritized poverty tows such as tows for vehicles parked in the same spot for seventy two or more hours and for expired registration. Towers for expired registration were among the third most common reason for tows last fiscal year. Low income people including those who live in their vehicles and large vehicles face challenges in paying off tickets and paying for registration and are therefore more likely to face registration tows. Even with the towing discount sometimes people cannot pay the fees to recover their vehicle and as the bla report states sfmta pays these fees to the vendor for every tow performed regardless of whether the agency collects revenue from the vehicle owner therefore the sfmta is likely to lose money on poverty toes like for expired registration when it comes to other ways to save costs in the upcoming rfp the sfmta should reduce their program costs and consolidate from two storage facilities to one The other potential strategies, including eliminating discounts, increasing fees, or reducing customer service, would be harmful to low income people and all customers. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you much, Eliana Binder. Next speaker, please.

[Flo Kelly (End Poverty Tows Coalition)]: Hi, I'm Flo Kelly and I work with the end poverty toes with Eliana who just spoke. The BLA's report cites one of many cost saving strategies to eliminate or reduce fee waivers and lower fees for towing low income residents this is not a good idea. Those lowering of fees is very important if we have way too many neighbors who are homeless we will only have even more if s f doesn't honor the waivers and reduced rates of the towing of people's homes or the towing of cars that people need to get to their jobs and and work their way out of homelessness. Our elected San Francisco treasurer instituted the financial justice project. Staff from that project worked with the community, represented by stop poverty toes with about 80 nonprofits throughout the city we met with staff of sfmta to work toward a system of waivers and fees that could work There is way too much towing of vehicles now. People get that the city bans rvs. There is not a path for people to get permits now if they don't have them even though they were here in March 2025. It feels like San Francisco has taken a playbook directly from our king. If you need a hand up, the city gives you a pushdown. And success is measured by not seeing poverty. A recommendation I do like is that to combine the two lots even though it might be a headache a person can then deal with finances and fees and pick up their vehicle no matter the size of the vehicle.

[Brent Jalipa (Committee Clerk)]: Thank you Flo Kelly for addressing this committee. And with no other speakers, Madam Chair, that completes our queue.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no more public comments, public comment is now closed. Clearly, we have some work to do around poverty toll policy, as well as just helping us understand the status and as well as the percentage both in actuals and projection help us understand the large vehicle toll in this case. But I think today colleagues I am in support of making sure that sfmta can continue the process of working on a competitive bidding process for this contract. And one of the ways to do it is to really to extend this by 15. And so I will make a motion to move to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to refer this resolution to the full board with a recommendation vice chair Dorsey. Dorsey, aye. Member Sauter? Aye. Sauter, aye. Chair Chan? Aye. Chan, aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. Mr. Clerk, please call items five through seven together.

[Brent Jalipa (Committee Clerk)]: Item numbers five through seven are resolutions authorizing the recreation and park department to accept and expand grants for the following entities amounts and terms for the India Basin shoreline park project and redevelopment project and to enter into modifications and amendments to the grant agreements that do not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the respective agreements or resolutions item number five is in the amount of 1,150,000.00 from the san francisco bay restoration authority measure a a grant to enter into the associated grant agreement as required by the charter that requires the continued operation of the property for public recreation for a period of twenty years upon project completion item number six retroactively accept and expend a grant in the amount of 2,000,000 from the united states environmental protection agency for the brown field cleanup program to support environmental remediation and park redevelopment at India Basin Shoreline Park for a term of 10/01/2025 to the estimated end date of 10/31/2029 and approving the associated grant agreement and item number seven is for a grant increase in the amount of approximately 3,000,000 for a total grant amount of approximately 8,600,000.0 from California state coastal conservancy and approving an amendment to the existing grant agreement to require a contract performance period that will remain in effect through 12/31/2048. Madam Chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have rec and park department here.

[Kaitlyn Hall (Partnerships & Capital Associate, Recreation & Park Department)]: Good morning chair Chan and Supervisor Stoddart and Dorsey. My name is Kaitlyn Hall, and I am the Partnerships and Capital Associate with the Recreation and Parks Department. I'm here to present the legislation for the three grants that were just listed that have been awarded to the city to help fund the India Basin shoreline park project. The first item is to accept and expend a grant in the amount of $1,150,000 from the San Francisco Bay Restoration Authority Measure AA grant for the India Basin Shoreline Park project, and to ask for your recommendation that the Board of Supervisors approves the grant agreement requiring the city and county to maintain the open space for public recreational use for a period of twenty years upon completion, and to authorize the department to enter into modifications and amendments to the grant agreement that do not materially increase the obligations of liabilities to the city. I would like to note that, this grant is now considered retroactive because the grant agreement was signed on 12/18/2025, but no funds have been expended to date. So with that, I have a few amendments to the legislation on file. So on page one, line one, adding the word retroactive. And then on line three, adding retroactively. And then on page two, line 14, removing the phrase substantially in the form of the example contract, because we now have a official contract. And then on line 20, adding the word retroactively. And then on page three, striking the language starting on line five that says, and be it through line eight to strike that language. So an update on the legislation. So a bit of background. The San Francisco Bay Restoration Authority was established in 2008 by the San Francisco Bay Restoration Authority Act as a regional entity to generate and allocate resources for the protection and enhancement of tidal wetlands and wildlife habitat along the San Francisco Bay shoreline. The San Francisco Bay Clean Water Pollution Prevention and Habitat Restoration Measure, also known as Measure AA, passed in 2016 and authorized the authority to collect a special parcel tax that is expected to raise approximately $25,000,000 annually for the next twenty years. India Basin Shoreline Park was awarded $1,150,000 to support the third phase of the India Basin Waterfront Initiative, which will serve the adjacent economically underserved community of Bayview Hunters Point by providing new shoreline access, enhancing the existing shoreline, reducing bay water pollution by supporting the new bioretention infrastructure, and creating new bay water trail access. The India Basin Waterfront Initiative completed phases one and two of the three phase project through the nine hundred Innis remediation and park construction that were were completed in October 2024. And the phase three groundbreaking took place on 08/19/2025, with a project completion anticipated in early twenty twenty eight. So these particular grant funds will pay for shoreline work that will take place towards the end of the project within phase three, most likely in 2027. So that concludes the first part of my presentation. So I'm respectfully asking the Budget and Finance Committee to recommend that the Board of Supervisors adopt this resolution, and I'd be happy to answer any questions.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I I think that these are long term agreements with the grants funding, twenty years and and more for one of them. And would love to see if possible, not today, but really on the record, that we can provide, again, the breakdown of funding for the entire project and scope of work. I think that that's part of recompart memo that is included here and then also the grant budget. But we'd love to have also photos of before and after. I think that's like it will be great to go inside with sort of like the scope of work and a little bit of before and scope the work of like once we have the project that's been ongoing and what does that look like it would be really helpful I think to help those general public to kind of see the investments along with these grant funding comes with and what that looks like especially before and after I think for someone that we have or I have visited before and to see what has the progress that it's been making it's amazing so I think we should have those on the record we look forward to seeing those before February 3 if you have them that we can include on the legislative file

[Kaitlyn Hall (Partnerships & Capital Associate, Recreation & Park Department)]: Okay. Will do. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: I don't have any other questions, and let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Madam Chair, did you wish to get the presentation on six and seven? And Oh, hold public sorry. Comment for

[Kaitlyn Hall (Partnerships & Capital Associate, Recreation & Park Department)]: Yeah, have two other items, but I wasn't should I just go through one by Please. Okay.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Yes.

[Kaitlyn Hall (Partnerships & Capital Associate, Recreation & Park Department)]: So the second item I have on the agenda is to retroactively accept and expend a grant in the amount of $2,000,000 from the United States Environmental Protection Agency for the Brownfield Cleanup Program to support environmental remediation and park redevelopment at India Basin Shoreline Park for a term of 10/01/2025, through an estimated date of 10/31/2029, and to ask for your recommendation for the Board of Supervisors to approve the Associated Grant Agreement and to authorize the Recreation and Park Department acting in consultation with the city attorney to enter into modifications and amendments to the grant agreement that do not materially increase the obligations of liabilities to the city. And just to note, India based in Shoreline Park was awarded $2,000,000 in funding from the EPA for the fiscal year 2025 Brownfield Cleanup Grant on 05/15/2025. This grant is considered retroactive, as I mentioned, because the grant contract period began on 10/01/2025, but no funds have been expended to date. And these funds will be used in the coming months for remediation at India Basin Shoreland Park. So this concludes item six. Should I move on to item six? Please. Okay. And then finally, I'm presenting a resolution to accept and expend a grant increase in the amount of $3,091,148 for a total amount of $8,591,148 from the California State Coastal Conservancy for India Basin Shoreline Park, and ask for your recommendation that the Board of Supervisors approves an amendment to the existing grant agreement that requires extending the grant performance period through 12/31/2048. So, bit of background. On 09/03/2024, the Board of Supervisors adopted Resolution Number four forty nine-twenty four authorizing the Recreation and Park Department to accept and expend a grant from the California State Coastal Conservancy in the amount of $5,500,000 for the India Basin Shoreland Park redevelopment project and approved the associated grant agreement with a grant performance period of 09/24/2024, through 12/31/2027, which is on file with the clerk of the board under file number 240679. On 09/18/2025, the State Coastal Conservancy Board approved a grant increase of up to $3,091,148 to the Recreation and Park Department to augment the previous $5,500,000 grant for the project. These funds will be used to support features that provide access to the bay, including the addition of a gravel beach, boathouse, and floating dock. So that concludes the third and final part of my presentation. So I'm respectfully asking the Budget and Finance Committee to recommend that the Board of Supervisors adopt these resolutions, and I'd be happy to answer any questions.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. My request for photos is for all three.

[Kaitlyn Hall (Partnerships & Capital Associate, Recreation & Park Department)]: Got it. Yeah.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank Yes. Thank you. And so with that, let's go to public comment on these three items.

[Brent Jalipa (Committee Clerk)]: Yes we are opening public comment for the all three items five through seven. If we have any members of the public who wish to address this committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no public comments public comment is now closed. Colleagues, I would first like to amend the item number five as requested by the department, inserting retroactive and retro indicating that this resolution is retro active, include and including, language like retroactive and retroactively, authorizing the accept and expand of this grant, and also, cross out on any reference in in pay on page two and page three that indicating that this has yet the contract has yet to be executed so with that motion to amend item number five and then and then to move all three items included the amended item to full board with recommendation and a roll call please

[Brent Jalipa (Committee Clerk)]: and on that motion to accept the amendments to the resolution in item number five as so stated and to refer these resolutions to the full board with recommendation with number five with item five as amended. Vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey aye. Member Sauter. Aye. Chair Chan. Aye. Chan aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. Thank you. Thank you. Mr. Clark please call item number eight.

[Brent Jalipa (Committee Clerk)]: Yes. Item number eight is a resolution approving the award of professional services agreement for program advisory services related to the waterfront resilience program between Jacobs Engineering Corps Inc. And the city and county acting by and through its port commission in an amount not to exceed 40,000,000 for a term of five years commencing on 03/02/2026 through 03/01/2031 with a single option to extend for five additional years exercisable at the sole discretion of the port commission pursuant to the charter. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and today we have San Francisco Port here.

[Brad Benson (Waterfront Resilience Program Director, Port of San Francisco)]: Good afternoon Chair Chan, committee members. Brad Benson. I'm the Port of San Francisco's Waterfront Resilience Program Director. I appreciate the opportunity to address you today on this important contract that really is foundational to the Waterfront Resilience Program. As you've heard, it's a $40,000,000 five year program advisory services contract. We're proposing award to Jacobs Engineering. They are also the incumbent coming off of a prior predecessor contract with the port. The major work that is going on in the program right now is a flood study with the Army Corps of Engineers that started in 2018 with a new start that our congressional district helped This us is really the means by which the Army Corps of Engineers determines whether or not there's a federal interest in dealing with local flood problems. It's a highly technical study. It started as a three year, dollars 3,000,000 study. But under core direction, it has grown to a $19200000.0.8.2 year study that we expect will end this year. Through that effort, we've analyzed flood risk to the shoreline along port property. We've looked at sort of damages projected through coastal storm events over a hundred year period of analysis. And through a planning process with city departments and the community, we've developed a recommended plan of coastal flood defenses, which I'll show in just a moment. The cost estimate for that plan in 2024 was $13,500,000,000 If the Army Corps recommends that plan to Congress and Congress authorizes the project, that opens the city up to a path of up to 65% federal funding with a 35% cost share. So where we are right now with the study is going through final policy review with Army Corps headquarters. We expect a chief's report to Congress around about May or June year, and expect the Water Resources Development Act to be adopted by Congress in late twenty twenty six. And that's where Congress authorizes studies like this. So briefly, I mentioned that recommended plan. This is a system of coastal flood defenses that would raise the shoreline along port property to address between a foot and a half and three and a half feet of sea level rise. It would adapt historic buildings that intersect the shoreline. It would provide the city with a new way of handling storm water. It includes more than three miles of engineering with nature features. We've also signed an agreement with the Corps that will allow the city to lead design of this plan because of our knowledge about city infrastructure systems and urban design in the city. We're planning two additional contracts that we would bring back to the board for your consideration that together are over $100,000,000 to advance design of that effort. We're going to need to choose a location to start implementation of a plan this large. We can't build it all at once, so we're going to have to build it in pieces. These pictures are showing the king tides that happened in early January. So this really is the low point along the Embarcadero, where we have BART, Muni, that underground Muni system rising up to the surface exposed to flood risk today. So the water level here was about 8.8 feet North American vertical data, and you can see it's overtopping the shoreline. We've had events like this. We've also had big storm events with large waves. We haven't had the intersection of the two yet, but if we did, we would have serious flooding in this area of the waterfront. So just turning to the contract, this is providing a suite of services, program management services, standing up a large infrastructure project like this. We have some skills at the port, but we need outside expertise to undertake standing up a program like this. This would provide environmental support for CEQA and permitting. Army Corps support services, it's a very technical agency to work with. So having folks who come from the corps and have that history of working with the corps will help us. Planning, design, and engineering technical services, communication support so that we can have robust public outreach and engagement as we advance design, as well as finance and legislative support, workforce development, and small business support. Finally, real estate and maritime services. So that's the general scope. We had a very robust competitive solicitation process. We had brought outreach to OBEs in the city. We had two pre proposal conferences. We actually extended the proposal due date to give people more time to respond to a big contract like this. We only got one proposal at the end of the day, and we'll talk about that, I'm sure, in the back and forth. We have a highly qualified firm with 26% LBE participation across 39 consultants. So about Jacobs, we did a complete review of their qualifications. They have excellent experience across environmental permitting, funding, legislative support, just beyond the typical program management and engineering services that you might expect from a company like this. They've obviously worked with us over the past six years, seven years in the program. So they have a deep understanding of the problems that we're addressing, as well as relationships with our city partners, the Army Corps staff that we've been working with. So they've also demonstrated commitment to diversity with this 26.6% LBE participation rate, which exceeded the CMD requirement. So in closing, know the budget analyst is going to testify and had a recommendation about doing sort of post work evaluation. And that's something that we've done in the program primarily with our engineering work. We've done the lessons learned and documented how we could work better together. We accept the budget analyst recommendation and want to extend that practice to all elements of the program. We think it's just good government. So I'll stop there, and I'm available to answer any questions when you have them.

[Nick Menard (Budget & Legislative Analyst’s Office)]: Item eight is a resolution that approves a new contract between the port and Jacobs Engineering. The value is $40,000,000 And the contract has a term of five years with one five year option to extend. The $40,000,000 is really sized for that initial five year term. And so if the contract is extended, the port would likely have to come back to the board to get approval for additional spending authority. This is for program management services for the Waterfront Resilient Program. It's a capital program to improve infrastructure along the waterfront. And that will ultimately result in up to $15,000,000,000 of spending to improve the seawall along the waterfront and make that infrastructure resilient to rising sea levels. We show the contract budget on page 23 of the report. This contract is primarily funded by twenty eighteen general obligation bonds Seawall for projects. And we also note in our report that the port right now does not have a policy or practice of evaluating its contractors. We think that they should adopt one we sent them, but the PUC has because we think it's good. Before they embark on a $15,000,000,000 infrastructure project, they should really be incorporating those best practices. But otherwise, we recommend approval of item eight.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. Supervisor Sauter.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Thank you. Just a quick question for the board. I think you noted 90 attendees to the workshops and then just one proposal. Is that common? Or is there something that scared off those other 89 from submitting a proposal?

[Brad Benson (Waterfront Resilience Program Director, Port of San Francisco)]: It's question. A We certainly are hoping when we do these competitive solicitations that we have robust competition. I think what may have hindered competition in this case is those other design contracts that I mentioned. We had been to our commission sort of advertising that we were going to go out for design services to advance the recommended plan through design. And

[Nick Menard (Budget & Legislative Analyst’s Office)]: there

[Brad Benson (Waterfront Resilience Program Director, Port of San Francisco)]: are important state conflict of interest provisions. The California government code section ten ninety, I believe, sets forth conflict of interest rules for consultant efforts like this. There are a couple of principles at play there. One is that you shouldn't write your own scope of services. That's sort of like writing your own paycheck in the future. And you also cannot review your own work, either from a design review perspective or a cost perspective, because you lack the sort of distance to do a fair review. And that's a lot of what the program advisory contract is going to help us do, is independent design review of the work coming out of other design contracts in the program and independent cost estimating. So there's a good reason that these companies decided to potentially opt out waiting for these other contracting options.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: And then in terms of the BLA recommendation recommendation on an evaluation method, is that something you'll consider?

[Brad Benson (Waterfront Resilience Program Director, Port of San Francisco)]: Yes, we accept that recommendation. As I mentioned earlier, we've been doing that with respect to the engineering work in our prior contract, but we have not had, as the budget analyst stated, a program wide policy, and we're going to adopt one so that it applies to all elements of the contract.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I have a question. Just kind of wanted to understand the contractor in this the selected contractor, particularly if you could name either a project that they have worked on specifically that includes sort of a technical assistance. In this case, they're providing the technical assistance for us so that we can secure a $13,000,000,000 of funding from the federal government and in this case through the U. S. Army Corp. And I'm pleased to see that is part of what they're going to part of the service that they will be providing. But could you just kind of walk us through if they actually have done similar, providing similar service to other municipalities?

[Brad Benson (Waterfront Resilience Program Director, Port of San Francisco)]: Sure. You know, one example program that they managed was the City of Seattle Waterfront Projects. I don't know if you're familiar with that effort. It was not an Army Corps effort. I want to be clear that Seattle pursued Army Corps assistance, but didn't get it. But the Jacobs team led program delivery of that set of projects, which is largely complete now. And it's the kind of, you know, waterfront investment in transportation that we would aspire to through this program.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Great. Thank you. I don't have any other questions. Let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes. If we have any members of the public who wish to address this committee regarding this item number eight. Now is your opportunity. Madam chair we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no public comments, public comment is now closed. Colleagues I would like to oh I should say, supervisor Sauter, what is your will on this item, particularly in your district?

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Thank you. I'd like to send this item to the full board with recommendation.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Roll call, please.

[Brent Jalipa (Committee Clerk)]: And on that motion by Member Sauter, that we refer this resolution to the full board with recommendation. Vice Chair Dorsey. Dorsey, aye. Member Sauter? Sauter, aye. Chair Chan? Aye. Chan, aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. And Mr. Clerk, please call item number nine.

[Brent Jalipa (Committee Clerk)]: Item number nine is a resolution approving an emergency declaration of the port pursuant to the administrative code to provide immediate emergency repairs to stabilize Dry Dock Number 2 at Pier 68 for a total estimated not to exceed cost of 10,000,000 and adopting environmental findings. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. Please go ahead.

[Megan Wallace (Interim Deputy Director of Finance & Administration, Port of San Francisco)]: Good morning supervisors. My name is Megan Wallace. I'm the interim deputy director of finance and administration at the Port Of San Francisco. Today, staff is here to request approval to proceed with an emergency contract to stabilize our Dry Dock Number 2 located at Pier 68 in our Southern waterfront. For some context, staff will be returning for a future item seeking approval of a supplemental appropriation. So, begin to give you a little bit of background, the port owns two dry docks located at Pier 68. The first, more to the right of your screen, it's more eastward within the bay, is Dry Dock Number 2. This is a 55 year old single section steel floating dry dock, 900 feet. So actually for your interest, it's actually longer than the ferry building. It's intended to hold cruise ships and military vessels all needing repair. The Eureka to the left is a much smaller vessel as well, but it is part of the larger story about what the port is trying to accomplish at Pier 68. So previously the port had a shipyard operator named BAE, which unfortunately abandoned the shipyard in 2017. And since that time, the port has been working diligently, working in an attempt to find a new shipyard operator, trying to sell the vessels, but ultimately to no avail we have not been able to find an alternative than to move forward with disposal removal and disposal of these vessels. And, in 2024, the board sorry the port commission authorized the port to move forward with a supplemental appropriation of $18,500,000 at which time staff began engaging with consultants developing cost estimates and options for how to move forward with disposal of these vessels. Unfortunately, before we've been able to proceed with removal, in November 2025, San Francisco was hit with a significant storm and Drydock Number 2 began to take on water. And you can see in this image that the vessel was actually listing, so that's part of that taking on the water and beginning to sink. It did trigger our port director to ultimately declare an emergency, at which time staff began engaging with the Department of Public Works to identify an approach for seeking an emergency contractor to be able to manage just stabilizing the dry dock as a beginning. This is just some more imagery of just the deterioration of Dry Dock Number 2, how it's taking on water, and how the port has begun to run pumps into it. They're actually running 20 fourseven and require ongoing monitoring by staff. So now with the Department of Public Works support, the board has moved forward with the work to stabilize. We've actually, under our emergency declaration, have already issued a notice to proceed. But with regard within the city requirements, we're now seeking the Board of Supervisors formal approval. And so, we're currently engaged in construction phase 1A of Dry Dock Number 2, doing our emergency stabilization. The contract work is $8,100,000 with $500,000 for the Department of Public Works. So, that's the 8,600,000.0 that you see in this first phase of work. Additionally, we have 1,800,000.0 built into the emergency contract for our contingency. But the overall picture I'm showing here is ultimately to take us through the removal and disposal of both dry docks. And so to that end, that is where we're starting to also move forward with funding. As I mentioned, there's a separate ordinance seeking that appropriation. The $18,500,000 in addition to $1,500,000 that the port already has in hand will allow us to move forward with $20,000,000 potentially of initial work. For this particular contract, we've identified 10,000,000 of short term funds that upon approval of the supplemental appropriation, staff will move the expenses to those newly appropriated funds and return our short term funding for original uses such as parks and open space improvements in the Southern Waterfront, for example. So ultimately, we are looking to pull together $61,200,000 to complete all of this work. Our proposed budget for fiscal year twenty six-twenty seven we anticipate will include an additional $41,200,000 So, in closing, we are seeking your approval of this emergency contract. And I do want to note that I have colleagues here to help me answer any questions. But also, I would like you know to actually propose non substantive amendments to our resolution per the suggestions of the controller's office. So supervisors copies of the amendments were circulated to your offices by the clerk's office so if I may read into the record the specific amendment. Beginning on page two line 22 we added two whereas clauses that read whereas on 12/16/2025 the port introduced ordinance 25 dash one two four eight to appropriate $18,500,000 fund balance from the port harbor fund to fund emergency repair work and prepare for removal and disposal of Dry Dock Number 2 and whereas emergency work must be performed prior to approval of ordinance 25 dash one two four eight requiring the port to identify funds that will be used in the short term and restored upon availability of the newly appropriated funds to serve their original purpose. And from there, we also added fund ID tables on page three detailing the sources of the $10,000,000 and signature lines for the controller and our own department head. We respectfully request your support and the amended resolution. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you.

[Nick Menard (Budget & Legislative Analyst’s Office)]: Item nine would approve an emergency declaration from the port related to their repairs they need to do for one of their dry docks. This is not a contract approval, and it's not an appropriation. What this emergency declaration does is that it allows the port to suspend contracting requirements in chapter six of the administrative code and then other social policy requirements in chapters twelve and fourteen that would typically follow a city contract to speed up the contracting process. The port got quotes from three different vendors. They selected one power engineering construction company to perform this emergency work. And you can see the project budget on page 31 of our report. There's an initial $10,000,000 of emergency work that needs to be done to stabilize the dry dock. But then there's a larger $62,000,000 project to dispose of this and then another dry dock that the port has that they have not been able to find a tenant for. This money is being funded by the Port Harbor Fund. It's money that would otherwise be used for maintenance projects along the waterfront. But I think this is a genuine emergency, and I recommend approval of this item nine.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I don't have additional question. I appreciate that you are evaluating according to the budget and legislative analyst report, you're evaluating whether any state or federal funding may be available to offset the cost. Appreciate that effort. Let' go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes we' opening public comment for this item number nine if we have any members of the public who wish to address this committee. Madam chair we have no speakers.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no public comments public comment is now closed. Colleagues I I would like to first accept the amendments proposed by San Francisco Port as read out loud into the record by deputy director Wallace and move the amended item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to amend this item number nine as so offered by the department and written to the record, that we refer this resolution to the full board with the recommendation as amended. Vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey aye. Member Soder? Aye. Chair Chan?

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Aye.

[Brent Jalipa (Committee Clerk)]: Chan aye. We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. Thank you. Mister clerk, please call item number 10.

[Brent Jalipa (Committee Clerk)]: Item number 10 is a resolution establishing the San Francisco Downtown Revitalization and Economic Recovery Financing District approving the downtown revitalization financing plan, including the division of taxes set forth therein, and documents and actions related thereto in authorizing the filing of a judicial validation action. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you and vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you, Chair Chan. So in a meeting that has seen a lot of items where I feel like I've held my nose and voted for things just because we don't want to not spend the money, this is one I'm actually really excited about. Because I'm a member of the Downtown Revitalization Financing District. I have heard this item a couple of times now and I am an enthusiastic supporter of this plan. This is an approach that, in my view, helps to fulfill a vision for twenty first century urbanism that reimagines downtown as a reinvigorated and thriving neighborhood. One that is mixed use and mixed income with more residents, more commuters, more shoppers, more visitors, and more amenities to serve them. In many ways, what excites me most about the Downtown Revitalization and Economic Recovery Financing District and its financing plan is that it gives us a once in a lifetime opportunity to correct twentieth century land use decisions that contemplated nine to five neighborhoods and bring them into the twenty first century as vibrant twenty four seven neighborhoods. I am committed to using every tool we have as a policy maker to support these projects, and this is a key tool to make these projects feasible. I wanna thank OEWD staff and their and their team for work on this. I also like to thank members of the labor community who have expressed support and some of whom are here today. And I look forward to moving this item forward.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. And let's start with the presentation from Office of Economic and Workforce Development.

[Jacob Bintliff (Office of Economic & Workforce Development)]: You, Chair Chan. Good morning, Supervisors. Jacob Bentleft with the Office of Economic and Workforce Development. Thank you, Supervisor Dorsey, for those remarks. And actually, I'd like to start the presentation by reminding us in a similar vein of the larger policy goals that we are trying to achieve with this program, as well as others we have pursued in the past couple of years. The primary one being, as Supervisor Dorsey alluded to, creating a 20 fourseven mixed use downtown that is not just about the nine to five that would then of course increase foot traffic for our local businesses who have really borne the brunt of this office vacancy that we've had since the pandemic. This also means more riders for BART and Muni and our other transit operators in the downtown area. Also, of course, it means there's more people on the street, more eyes on the street, it's a safer environment, a more active environment for our streets, sidewalks, open spaces, especially in the evening time. All of this makes our downtown more resilient for the next downturn, whatever that looks like. You know, getting away from being so reliant on one use in this area would help us to avoid the situation we find ourselves in now after the pandemic. This all would ultimately help contribute to shoring up our city's long term tax base as well by shoring up the value of the office market itself, by taking some of the vacant underutilized office out of the market, by overall reinvigorating downtown, it's going to shore up the base value of all the properties throughout downtown in the long term for the city. And of course, that's all about downtown revitalization. There's a twin goal of the city that is being served here, which is of course creating housing as well. So this would help contribute to our housing goals. So specifically, today we are here to consider a resolution to approve the financing plan for a downtown revitalization financing district. This is a new tool from the state that was enabled by AB2488 that came into effect at the beginning of last year. It allows San Francisco to create one such district within the boundaries that you see on this map. It allows the key provision here is that we would use future property tax increment, so the growth in assessed value over time from a certain number of conversion projects that opt into this program, to provide an incentive payment to those projects over the course of thirty years to help compensate for the development cost of the project. The state law does have a sunset. Projects need to enroll in this program by the 2032, so that's about seven years from setting up the program. And it is governed by a separate district board, board of directors, and I want to thank Supervisors Dorsey and Sotter for their service on that board, as well as for their cosponsorship on the item today. We shared with you when we were back here in May to begin this process the estimates that we had about the impact of this program in downtown. Our consultant analysis from Bay Area Economics identified 1,300 parcels that would be eligible, with 48 buildings that would be likely candidates for conversion based on their vacancy, their size, their age, and so forth. This could account for about 4,400 new units in the downtown, or around 7,000 new residents in our downtown if all those 48 projects were to convert under the program. To put this in context as far as the process, and there is a rigorous process that we have been going through to set this up, we were last here at this committee in May for the board to adopt the resolution of intention, which it did in June, that started this process. There was also an ordinance that created that district board, which then began meeting in September and held their initial meeting, where they directed OAWD to develop the financing plan that is before you today. That financing plan was heard in draft form at a public hearing in October of the district board. The final version of that plan was heard by the district board and approved in their December meeting. Now we're here at the Board of Supervisors for this final step from the Board of Supervisors to approve this resolution. If so, then we would have a final public hearing of the district board, currently scheduled for mid February, to adopt and establish this program, and then we'd be ready to start receiving applications. So we're getting very close. The financing plan has a number of components. I'm going try to go through the key ones here. So it does set forth the district goals, which I alluded to, makes findings that the city does find that these conversions are of community wide significance and consistent with the general plan. Importantly, it establishes this boundary, this maximum boundary that we're allowed to do under state law, which as you can see, includes the Financial District, Union Square, Mid Market, Civic Center, as well as parts of SOMA East Of 6th Street in the Central SOMA area and East Cut, Rincon areas. The eligible projects under the state law and financing plan have to be located in a district that allows for residential mixed use housing. The projects need to be at least 60% residential. The financing plan is making a choice to exclude projects that are located within current and former redevelopment areas. This is because it would be very difficult to manage the apportionment of the increment going to redevelopment areas versus to this program. So those have been taken out. And also, the financing plan specifies that the tax benefit would only be proportional to the amount of the project that actually was converted from commercial to residential. So if you built if you converted the building and then added additional floor area for net new residential, that portion would not get the tax benefit. It's only to subsidize the conversion. The financing plan also codifies the state's affordability requirements under this program, which are that the projects, after the first 1,500,000 square feet of projects to enroll, would be required to provide a minimum amount of on-site affordable housing, which would be 5% very low or 10% low income units for a rental project, or 10% moderate income for a for sale project. The financing plan also specifies that the local inclusionary housing requirements would apply when they're higher. As you recall, we have waived the impact fee and inclusionary requirements for conversion projects in the C3 districts. So that's most of this area. But there are other areas of this district that are not in that zoning district where the local inclusionary requirements would apply, because they're currently higher than these numbers. Also, the plan specifies as far as any dwelling unit removal, which would be pretty much inconceivable considering that we're talking about commercial projects converting, but that it makes clear any such dwelling unit removal would have to follow all of the city's policies around removal. The financing plan also codifies the state law labor standards for these projects, which are that they all must pay prevailing wages. Projects of more than 50 units need to employ workers with registered apprentice programs and provide for health care benefits. Projects involving a building of more than 85 feet in height would use skilled and trained union labor for the project as well. The financing plan, really one of the key components is to identify the amount and use of the tax increment that we're talking about here. So it is using the full share of the city's share of the property tax that we're allowed to use under the state law. So we're maximizing the incentive payment that we're allowed to under state law. This means that of the incremental value of the project, the city's base tax is 1%. The city keeps 65% of that. That's the portion that would be used as an incentive payment over thirty years to the projects. The financing plan is not including revenue from what is known as the property tax in lieu vehicle license fee program, which is a lump sum payment that the city receives from the state every year that is based on property tax, but is very difficult to apportion to any one project. So that's been excluded, which means there would be additional revenue flowing to the general fund due to that. Financing plan lets us keep 5% for administrative costs, and it also includes a projection of a maximum of $610,000,000 over thirty years, over the forty five years of the program that could go out. And then there's a hard limit of double that to allow for if there are more projects to come in, or if assessed value grows by more than we projected. The financing plan also includes a fiscal impact analysis, which was a requirement of state law. This was prepared for us by BAE, who also did the initial projections for the program. The analysis finds, firstly, that if all 48 of these projects that we thought were likely do enter the program before the deadline, it would generate $1,600,000 in today's dollars of general fund revenue coming in. In addition, to look at the net fiscal impact, BAE estimated a range of a negative $8,200,000 to a positive $500,000 per year if all the projects opt in. The reason for that range is depending on how you estimate the service cost per person in these buildings. So using the traditional fiscal impact analysis methodology that the state requires, that's what generates the negative number. That assumes that you're going to spend the same amount for every one of these residents that you would spend for a unit that was built somewhere that there was never a service population that was ever served before. That's not the case in our downtown, where we have a built out, well served area of the city that has had significant population decline since COVID. So we're now backfilling that population. We had BAE run an adaptive reuse analysis of this that when factoring that in, that unique condition in, generates a positive impact to the general fund. There's a lot of uncertainty around how many projects will enroll, so we've also shown what that looks like on a per project basis, where you have a range of per project a negative 169,000 to positive 11,000 per year into the general fund on the net. Finally, all of that only covers actual tax revenue and spending by the city. It did not try to capture overall economic benefit, but we did look at a report in Los Angeles for a very similar program that was developed recently, and computing that over to San Francisco's, to this program, and the units we expect here, estimate that there would be around $133,000,000 of total economic activity and spending impact generated by these 7,000 new residents if all the projects move forward. Finally, the financing plan does also direct the district board to adopt some program guidelines that will be adopted at their final meeting after the Board of Supervisors acts to spell out the nitty gritty details of how the projects would actually apply to the program. And also importantly, it delegates the city's responsibility to issue an annual report to the state, to that district board, so we can do it all in one place and not have duplicative efforts. That's our staff presentation. We're here for any questions, and thank you so much for your attention.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. Item

[Nick Menard (Budget & Legislative Analyst’s Office)]: 10 is a resolution that approves the downtown revitalization district's financing plan. The resolution also delegates authority to the district board to approve agreements with property owners who enter into contracts to receive property tax distributions if they convert their buildings from commercial to residential uses. As we detail in our report, this is a tax increment financing district. So it takes the incremental increases in property taxes and provides them to to building owners that convert from commercial to residential use. This financing plan sets the rules for that program and projects that about $610,000,000 would be allocated over the forty five year lifespan of the district. There was a fiscal impact analysis completed as part of the financing plan development process, which determined that the projects on a kind of building by building basis would have either a negative $170,000 impact on the general fund or a modest positive impact of about $11,000 per project. That is driven by the fact that unlike other infrastructure financing districts or tax increment financing districts that have been approved by the board in the past couple of years, this allocates the entire incremental increase rather than 50%, as we've seen for other tax increment financing districts. We also know in our report that there's no individual needs assessment on a project by project basis whether they truly need these subsidies to be financially feasible. We did evaluate what the subsidies would what impact they would have on project feasibility. Depending on how much it costs to convert and the ultimate sales price of the projects and acquisition costs, we think that this will fund between 523% of project costs. That is within the range of other tax increment subsidies that have been approved by the Board of Supervisors, which generally range from 15% to 20%. But there's actually no cap, in a sense. And it does create a somewhat perverse incentive in that the higher end the housing is that's ultimately developed within this district, higher the increment will be and the higher amount of the city subsidy there will be for each project. So I think it's for that reason we did recommend that in addition to the existing cap that's already in the financing plan of not providing more than onethirty of project costs in a given year to the project, we found that that was not an actual limiting constraint, that the financing plan be amended to include a cap of, say, 15% of project costs, which I think would be reasonable. Reasonable people could disagree about the number. Maybe it's 20%. But there should, I think, be some cap, because this is primarily for market rate housing. We also note in our report that the city will incur administrative costs to make this district work. The clerk of the board is going to have to hold meetings for the district board. The controller's office provides a lot of support to the analysis that's required every year. And the administrative costs would not be covered until about fiscal year 02/2004 because the projects themselves are not going to really be opting into the district until fiscal year 'twenty eight, 'twenty nine. And then they finish opting in around fiscal year 'thirty five, 'thirty six. So there's a funding gap of about a couple $100,000 for the next couple of years. So I think if you're going to proceed with this, the board and the mayor need to actually appropriately fund the controller and the clerk of the board to pay for those administrative costs. I know OEWD is contemplating doing reimbursement agreements with developers. I think that process has not concluded yet. And it's not clear if anyone's going to opt in, say, for next fiscal year when there will actually be administrative costs. So that is a small but important number to keep in mind given the city's financial condition but happy to answer any other questions.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you chair Chan I did want to welcome the students from Hoover Middle School who are here. We really appreciate you being here. And I will just say it is telling that we have elementary school students who want to show up and support revitalization in downtown so that when they're in high school and college, they'll have a more fun downtown to go to. So you're welcome to speak on that in public comment. That's it.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. And Supervisor Sauter.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Well, welcome, Hoover. We're scaring them off.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: They're like, we're done.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: They're bored.

[Unknown student attendee (Hoover Middle School)]: We're not interested in I the finance

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: just briefly want to speak in support of the item as well. And thank you, Supervisor Dorsey, for your remarks. I think there's a lot of excitement about this program. And I appreciate the work that OEWD has done to stand it up. And also the kind of the remarks on maybe a better model to think about the fiscal impact and measuring the fiscal impact of adaptive reuse rather than the standard model. And the fact that this is modeled off of a successful program in New York City, which I think is what so many of us are looking at as a model for our downtown recovery and incentivizing housing. So we'll be in support of this item. Thanks.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. Which 48 properties? I don't think that it was listed.

[Jacob Bintliff (Office of Economic & Workforce Development)]: Thank you, supervisors. No, we don't have a list of the 48 properties. BAE did a high level scan looking at the full list of properties in the current assessor's role throughout the area, looked at the available data at the time to estimate that it looked like 48 of those properties were eligible at that time. The criteria they used are so variable, like including the currently reported vacancy rate of the building, and so on, that it didn't really feel wise to put out a list of projects that was based on a online scan that they did of available data of the vacancy, that also is a number that's going to continue to change. So we think it was a good method to let us know the rough quantity, while the particular number of properties that might be attractive for this will change over time. And also, each property is so specific. You know, the individual bones of the building makes such a big difference. We didn't feel like we had the level of specificity necessary to say we think it's exactly this building or that building, but to do a scan and say, Okay, this feels like a reasonable amount to expect might enroll based on those characteristics.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Sure. But I disagree. I mean, I think through public records, it's always good to know which 48. I would like to see that list of 48 to be included on the legislative file. I you know, I have questions about just generally we have waived impact fees for conversion. We have done a lot around the conversion of residential from commercial to residential. And we have also removed inclusionary requirements. We have done a lot for this area. I certainly want to understand the 48 potential candidates that could qualify to help, at least me, to understand the feasibility and how real this is and that but most importantly, also think that if we are going to approve a financing plan based on this 48 properties, projecting that they could be good candidate that both in terms of the revenue that we could generate it or the net impact that could generate based off this 48. I would like to see by the time that 2032 comes that this is whether we are projecting accurately or not. And then also whether this really truly become feasible for them or not, it is difficult it is very difficult in my opinion layperson opinion to convert a commercial property into residential in our downtown area just to in both in compliance of the building code and all that stuff I do also think that while I appreciate ab twenty eleven and s b four two three in terms of labor standard I certainly hope that if we're going to upsubsidize this also on a local level through our general fund tax increments I certainly also hope that we provide even a higher labor standard that's inclusive of a project labor agreement I know that today, colleagues may not concur with the suggestion. I am simply proposing them. But I certainly think that we should, and and the public should too if we're going to have a financing plan sponsored by the city giving away to tax increments also again by the city, the 48 properties should be public, to show whether they're good candidates, for this, whether it's feasibility. But but I I I think we should have that list. So I certainly am going to request for that list before we should I assume we will move this out for full board for the vote today. So I would like to have that. But for the district board to consider for me as budget chair is that, again, would like to have understanding and I think that the bla will be as well I have requested for a report help us understand fee waivers different kinds of impact, including EIFD, and in this case, a financial district, and how would all these really help us boost housing production. At the end of the day that I do concur with the sentiments that it is you know 2026 we should see downtown in a different lens it's not the same anymore it would be a much better downtown should we, have sort of this mixed use truly a mixed use of, residential and and commercial. I think there's a lot of thoughts kicking around now that Westfield Mall or San Francisco Mall has closed since closed down. I can't imagine, like, how it would be, but it would be certainly wonderful to see some of these, spaces convert into residential, a good, mixed use, not only to bring, housing to the space, but really a a different population to be able to mix into that space. It's a very good thing for a long term sustainable local economy. All which is to say I am in support of it. I do hope that you will take in consideration so with the district board to into the consideration of a cap for these 48 projects in terms of subsidized subsidies from the city because it would be helpful in the long run at some point. We have learned a lot from the payroll tax for mid market and and thought like if we have put a little bit more criterias, maybe it's boom time that it will help offset some of the city's like revenue loss a bit so I look forward to hope that you could relate that message to the district board when you have that further final adoption that these are the concerns from the BLA, think it's worth for consideration.

[Jacob Bintliff (Office of Economic & Workforce Development)]: Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And with that, let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes. We have members of the public who wish to address this committee regarding this item number 10. Now is your opportunity.

[Jack Sylvan (Developer)]: Good morning, supervisors. Thanks for having this hearing and thank you to o e w d they've done a tremendous job marshaling this my name is jack sylvan I spent many years working here in city hall and now I run a small development company that has spent a fair bit of time evaluating the office of residential conversion and I think the thing that is and I appreciate that I think everybody in the room agrees it is crucial that what we've learned is that San Francisco's current downtown land use is just not resilient it absolutely has to have housing and to me whatever can be done to support that should be done as much as possible and I appreciate the recommendations for having caps but I can just tell you having looked at 20 to 25 buildings that anything we do that could limit conversions is just going to hurt us in the long run and at the end of the day were the general fund isn't giving anything up that it actually has these property tax revenues only exist because a conversion was made viable through this program and the investment was made in that building and that actually creates the tax increment that it is being used so as Jacob referenced, the places where conversions are happening are using the same tool. And I know there hasn''t been a lot of conversation about what''s happening in the office market downtown and one could read the headlines and go why why do we need this and I think it''s just worth pointing out in the record that there's still 30,000,000 square feet of vacant space in downtown it's by any standard it's historically massively a problem so appreciate your support for this

[Brent Jalipa (Committee Clerk)]: thank you much jack salivan Next speaker please.

[Peter L. Muñoz (Bay Area Council)]: Good morning supervisors. My name is Peter Lorre Munoz and I am representing the Bay Area Council which represents about 400 of the largest employers in the Bay Area. We were proud to have sponsored AB 2,488 by Assembly Member Ting, the legislation authorizing the EIFD that you were voting on today, and we're thrilled to see the city take up that opportunity with such alacrity and attention to detail. San Francisco is a place of constant innovation and renewal, and this district falls squarely in line with that spirit. Crime is down, foot traffic is up, but offense vacancy still lingers around 30%, although it is good to note that that is descending as well. This tax district gives another tool in the tool belt to accelerate the recovery and bring more people to our downtown area. By helping finance these office to housing conversions, we can build more housing in the best place for it while also filling empty office space holding us back. That is good for businesses, sales tax receipts, tourism, and so much more. We urge you to support this measure today and look forward to working with you in the years to come to ensure it is a success. We also want to give a special thanks to your wonderful staff at OEWD, especially Jacob Bintliff for their diligence and partnership. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you Peter Laro Munoz. Next speaker please.

[Jesús Mendoza (Carpenters Local 22)]: Chair and members of the finance and budget committee thank you for the opportunity to speak today. My name is Jesus Mendoza and I'm here on behalf of carpenter's union local twenty two and its 4,000 men and women who build and reshape our city and county of San Francisco. Like many of you our members are deeply concerned about the challenges facing downtown. High office vacancies, stalled projects, and a slowing construction market effect not just buildings but the people who depend on this work to support their families and remain in the city. Approving that the downtown revitalization financing plan offers a thoughtful and fiscally responsible way to address those challenges. San Francisco can help move forward office to housing conversions that are currently difficult to finance. These projects are especially labor intensive and require skilled trades working over multiple years providing steady employment at a time when private development has slowed. We appreciate we appreciate that this approach is performance based It relies on future property tax growth that would not exist without these projects and it does not divert existing city revenue. That balance supporting housing production while protecting the city's fiscal health is important to working families as well. Keeping construction workers employed locally strengthens the broader economy. It allows workers to stay in San Francisco, support local businesses, use public transit, and remain part of the communities they help build. At the same time, adding permanent residents to downtown supports small businesses, safer streets, and more active city core. We view this as a we view this as a practical step towards shared goals, housing, economic recovery, and good local jobs. We respectfully urge your support of this item and look forward to continuing to work in partnership with the city. Thank you for your time and consideration.

[Brent Jalipa (Committee Clerk)]: Thank you much, Jesus Jesus Mendoza. Next speaker.

[Lisa Fullman (Architect, Skidmore, Owings & Merrill)]: Thank you for the opportunity to speak. My name is Lisa Fullman. I'm an architect at Skidmore Wings and Merrill, where I also lead our Global Adaptive Reuse program. I care deeply about this because I don't want us to return to a downtown that only works from nine to five Monday through Friday. We've seen what happens when offices empty out. Housing is what keeps downtowns active, safe, and resilient. I support downtown revitalization and economic Recovery Financing district as a tool to create a more vibrant mixed use downtown. A successful downtown needs people at all hours, not just during the workday. Adding housing brings life to the streets, supports local businesses, and strengthens our community identity. Over the past few years, my deep research of the building stock in the C2 and C3 Districts shows that there are real potential for residential conversions, not many. But some of these buildings are well suited for adaptive reuse, allowing us to make the most of what we already have rather than starting from scratch. A good chunk of the proposed financing district overlaps with the boundaries of the adaptive reuse program, meaning planning framework is already in place to encourage housing and mixed use in this area. Residential conversions help create safer, more active streets, support local businesses, and build a downtown that can adapt to changes in how and where people work. This is about shaping a downtown for the long term, not just returning to the pre pandemic office only model. Supporting this district helps ensure we move forward toward a downtown that's lived in, dynamic, and resilient. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you very much, Lisa Paulman. Next speaker.

[David Harrison (San Francisco Chamber of Commerce)]: Hi, supervisors. David Harrison here on behalf of the San Francisco Chamber of Commerce. First, huge thank you to the OAWD team. I know this has been years in the making of work and thought about how to solve the downtown challenge. I'll be brief. I think we've heard a lot of the positive policy considerations for this and the chamber shares those goals. Think for so many reasons, obviously we have this high office vacancy number. A significant amount of that vacancy is functionally obsolete in its current use. It is important to the extent that we can to move that building stock off the market and to a better use. That will in turn lead to some of the other goals that we have for downtown and for the city, transit ridership, property tax values, foot traffic. And so for these reasons and for the chamber being able to collaborate with folks from all across the country, primarily New York City, to hear about how they've thought about these challenges in the past. We're here in support of this program. So, thank you, and I look forward to continuing to work on the downtown challenge. Thanks.

[Brent Jalipa (Committee Clerk)]: Thank you very much, David Harrison. Next speaker, please.

[Erica McClitus (SPUR)]: Good morning. My name is Erica McClitus, and I'm here on behalf of SPUR. Our research indicates that redeveloping obsolete office buildings into housing is one of the best ways to help solve two issues that have hindered Downtown San Francisco's recovery, and that's the lack of diversity of land uses, and the lack of workforce housing near employment and transit. As mentioned, other cities, including New York, Chicago, and Denver, have used tax increment financing combined with other policy tools and incentive programs to support office to residential conversions. And, these conversion projects have helped transform sleepy central business districts into those mixed use 20 fourseven social hubs with housing, restaurants, retail, entertainment, and cultural institutions altogether. Here, these conversion projects represent a potential thousands of housing units in an area that already has high quality transit connections in place, and could bring thousands of new people who can help support the small businesses and cultural institutions that have been struggling with fewer people and less activity downtown. Because of this, Spurs supports creating the downtown revitalization economic recovery financing district to finance these conversion projects and we really commend the mayor, board of supervisors, and staff from o e w d for their work to advance this legislation. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you much for addressing this committee next speaker.

[Supervisor Matt Dorsey (Vice Chair)]: Good afternoon supervisors mark mapson I'm president of emerald fund were San Francisco housing developers we did the big conversion at 100 of four eighteen units that's a decade ago. At

[David Harrison (San Francisco Chamber of Commerce)]: the

[Supervisor Matt Dorsey (Vice Chair)]: time the numbers were different. Construction costs were 70% less than they would be today to create the same exact building. This is why we're not seeing any unsubsidized construction of housing in San Francisco. Here we have a product type conversion of office to residential that could work, that we've got a demand for housing, we have excess office space, and we've done a great job over the past couple of years of putting several programs in place that would help make the numbers work. OEWDN Jacob has done a phenomenal job, as well as Lilly, at planning. This is the last leg of the stool that we've been talking about for two years, and took two years at the state to get through, and the state has given us the authority to great this district so I encourage you to go ahead and take the last step and please do not reduce the available property taxes because the numbers are so tight we really need every dollar to make it feasible so thank you very much.

[Brent Jalipa (Committee Clerk)]: Thank you much mark betson. Next speaker.

[Wit Turner (Housing Action Coalition)]: Good afternoon supervisors wit turner on behalf of the housing action coalition in support of this item. This is really a critical step towards addressing two problems, the underutilized vacancy of office buildings downtown and the housing shortage that we're facing. Estimating to advance approximately 48 projects, potentially thousands of units of housing, bringing more and more residents downtown. That's really meaningful progress and can put a dent in our arena numbers. A key part of this transformation is making downtown a 20 fourseven mixed use neighborhood. We really want a place where people can live and access public transportation and support local businesses. So we're really excited for that. And we're proud to be supporting this alongside the NorCal Carpenters, our members Emerald Fund. And we thank the OEWD team, especially Jacob, for their leadership on this. We know this is a viable step towards more housing. We've seen the example in Manhattan that helped convert obsolete office space into over 12 new homes. So we believe this approach can deliver. The housing action coalition urges you to support this item. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you much with Turner. And seeing no further speakers madam chair that completes our queue.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you seeing no more public comments public comment is now closed vice chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you chair Chan and I want to again reiterate my gratitude to o e w d and everybody who came out to support this. I also want to express my gratitude to our colleague, Supervisor Sauter, who is doing a lot of the heavy lifting and sweating the details as the chair of the district board. I am happy to be an enthusiastic cheerleader, but he's doing a lot of the work, I wanted to just express my gratitude to him and to his office as well. And I'm happy to make the motion. I'd like to send this out to the full board with our positive recommendation.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion by vice chair Dorsey that we refer this resolution to the full board with recommendation vice chair Dorsey. Dorsey, aye. Member Soder, aye. Chair Chan,

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: aye.

[Brent Jalipa (Committee Clerk)]: We have three ayes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The motion passes. With that, mister clerk, please call items eleven and twelve together.

[Brent Jalipa (Committee Clerk)]: Yes. Item number 11 is an ordinance authorizing the mayor's office to accept and expand the grant in the amount of 7,000,000 from Bloomberg of philanthropies to fund the mayor's office of innovation from 01/01/2026 through 12/31/2028 approving the associated grant agreement under the charter amending the annual salary ordinance for fiscal years 2025 and 2026 and 2026 to 2027 to provide for the creation of four grant funded full time positions in the office of the city administrator with one position in each of the following classes. Class nine thirty one, manager three, class ten fifty three, IS business analyst senior, class ten fifty four, IS business analyst principal, and class ten forty three I s engineer senior and item number 12 is a resolution authorizing the mayor's office to accept and expand the grant in the amount of 700,000 from tipping point community for the establishment of a director of strategic partnerships to advance public private partnership initiatives aligned with mayoral priorities for the period of 01/20/2026 through 07/01/2028. Madam chair.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you Mr. Clerk. And what I would like to help to proceed with this one is noted that item 11 has a budget legislative analyst report. So let's go to item eleven first and then we''ll go to b l a and then we''ll go to item 12, presentation. Thank you.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Thank you so much, Madam Chair, supervisors. Good afternoon, and thank you for having me. My name is Florence Simon. I'm director of the mayor's office of innovation. I'm here on behalf of the mayor's office to ask for your support on accepting and expending a $7,000,000 grant from Bloomberg Philanthropies. This grant will fund my team, the mayor's office of innovation, for the next three years from January through the December 2028. And I know we have not signed the grant agreement yet. We are awaiting the approval of the board to do that. So the $7,000,000 will fund the current team, which is six people, and allow us to expand the team to 10 people. That's going to be nine people funded by Bloomberg Philanthropies and one person funded in our city budget in the Department of Technology. I

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: want

[Florence Simon (Director, Mayor’s Office of Innovation)]: to emphasize that this is big news. Among dozens of innovation teams and offices that Bloomberg Philanthropies has funded around the world in the last decade, this is the biggest grant they've ever given to any city anywhere. It's a win for a whole city, a testament to the leadership of the board, the mayor, the departments on innovating in government, delivering better outcomes for residents. It's recognition what we've already done. It's a vote of confidence in the energy run government innovation in city hall and also the ecosystem of technology and innovation that is growing and evolving out in San Francisco every day. And what Bloomberg hopes to achieve by partnering with us is to support us in being a lighthouse model of innovation. In other words, testing new approaches, scaling them, and using them to deliver for San Francisco. And I hope that is something that we can work together to achieve. I'll talk a bit about our office's value proposition as well as our work to date. So our office uses new approaches, data, software, hardware, human centered design, public private partnerships, best practice from other cities. We use that to drive progress on key priorities of the city and make sure we're really meeting the needs of our residents. We're able to do research, look at data, qualitative research to find the right solutions, challenge assumptions, not just think that the right solutions are the ones that we've assumed we needed for the last ten years. For example, if someone comes to us and asks us, and this is pretty frequent, I want you to build software. What we are able to do is say, do we really need software? How do we really meet the needs of our residents and deliver results for them? I think it's also important to emphasize that as an innovation office, we are able to try things, test them out, learn, adjust and then if they work, then scale it. And I think that approach of being able to test something and then scale it only if it works, it's really powerful in the budget constrained environment that we are living in today. So we have a lot of different skill sets on the team, policy implementation, product management, data science, service design, technology evaluation, and many of these skill sets are rarer in city government, and we've already started to demonstrate their value as demonstrated by the work that we've already done to date in this last year with the mayor's office of innovation, working with the mayor, the chiefs on the city's key priorities, from safe streets, revitalizing the economy, to better government services for San Franciscans. So there's six projects we've already made a lot of progress on or delivered, but there's so much more work to do. I'll tell you a bit more about what we've actually done to help you get a better idea of what the mayor's office innovation can be delivering for San Francisco over the next three years. So we take what I'll call a problem first approach. And what I mean by that is, importantly, we're not here to sprinkle, you know, tech or AI fairy dust on things. We are here to deeply understand the problem, find the right solution, and get that solution done. And that's been our approach to informing homelessness response, to sustaining benefits for San Franciscans who are on Medi Cal, on CalFresh, in the face of federal work requirements, on centralized, transparent, and efficient permitting, on making sure that we can fill our staffing gap of 500 police officers and not take two years to hire each one, on better violence prevention and incident response, on delivering better transit customer experience. There's so much of this work that is important that is ongoing. So I'll get into a bit more detail on each of these projects now. For homelessness, for example, what we are doing on homelessness is using data and technology to deliver the right resources and services to people experiencing homelessness so we can drive the right outcomes. For example, we built a mobile app to coordinate how fire, homelessness in support of housing, public health, and emergency management departments can deliver the right services and supports to individual clients. We're piloting a system to make sure that we can match clients to the appropriate shelter beds. That's solving two problems. The first is we're paying money for shelter beds, and people aren't actually using them. The second is that we have people experiencing homelessness, and they want to go to a shelter for the night, and they're talking to our street teams. And that street team member is calling 10 different shelters. That's a real number. That's not made up. 10 different shelters and still not able to place that person in a bed for the night. That doesn't work. And so what we are doing is building a tool that allows street teams to say, alright, here's where all the shelter beds are available in the city. Here's what's filled. Here's what's open. Here's what matches my client needs so that we can actually serve them quickly and easily. Another thing we're doing is really digging into the journeys, the needs, looking at data for our high need clients, people who are going to the ER multiple times a month, going to the hospital multiple times a month, and sadly there are many of these people in San Francisco. So we're trying to understand is let's look at the what we are trying to understand there is how do we get them to long term care, to shelter, to housing. And we know that if we can do that, not only is that great for them, but it could save us millions of dollars every year. So there's lots of potential that we are working to realize on homelessness. A benefit's another critical project for some of our most vulnerable San Franciscans. As I think that this committee knows, tens of thousands of San Franciscans are at risk of losing their critical Medicaid benefits, their food stamp benefits as early as July. And that is because last July, president Trump sponsored and congress passed legislation called h r one, and that's putting work requirements on Medicaid and food stamp recipients. And that means that thousands of people could lose their benefits, and it could also be a huge problem for our county health systems, our local businesses. And so what we need to do quickly is figure out how can we work together to make sure that people can be in compliance with the new law, compliance with the work requirements so that people can keep their benefits. And so we're trying to make sure we're helping San Franciscans at every step of the way. If they qualify for exemptions, get them exempted. If they're working, document that. If they're not working, connect with work, connect in the volunteer opportunities again so they can comply and keep their benefits. We know there's a lot of opportunities with on research and where we can improve awareness, where we can reduce paperwork burdens, where we can connect people to work better. And so we're gonna be launching some technology pilots. We're gonna be improving processes, having new volunteer and work programs so that we can really lead a best in class response on this huge issue for our county and city. On permitting, we're working to launch a single online citywide permitting system. It's coming out starting on February 13. The new system will have immediate impact on remodeling homes, commercial business improvements, fire safety systems, planning and launching special events. Applicants will be able to request permits online, and that's actually really big. So it doesn't mean they have to take the day off work, go wait around the permit center for forty four to eight hours, Pay for parking. It that's all gonna be done online in a modern system. Staff are gonna have a new system to work together easily, collaborate, process permits. We'll have reporting dashboards so people can actually see how their permit is progressing so that you as city leaders can track our performance, help us think about where we can be doing better. So we're really excited to be living with that impact starting in mid February. On police hiring, a great example of our work, what we did there is first just take a look at the data. Understand where are people getting stuck? Why is it taking two years to hire a police officer? And what we found out what some of the bottlenecks were, such as background checks, such as the battery of disparate exams that people have to be taking, We then figured out how to redesign processes so that it could be much easier for applicants. We did more digital marketing so we could attract more applicants, and we delivered some great results. 50% more applicants this year or in 2025 compared to 2024. We shortened that hiring timeline by 66%. We completely flipped the trajectory. So in 2024, our police force lost 40 police officers. In 2025, we hired 40 police officers. And so this demonstrates how our approach of, like, really taking a look at the data and designing the process to make sure that it's working for real people, how it can have results. A couple more examples, violence prevention incident response. Strange but true. We found back in the fall that there can be a lag of up to nine days between when our departments like public health, police, district attorney are doing violence response or violence prevention work and when we as the city and the mayor learned about it. And so we built a new tool so they could do reporting in twenty four to forty eight hours. We got them together around a group of shared outcomes. They could be working together. It's another example of how we're integrating data to drive better performance. On transit, we have piloted some proactive and rapid response models for cleaning some of the most written and complained about transit lines showing that we can be responsive to customer feedback, building support for transit in advance of the votes and revenue measures in 2026. So there's a lot of work for us to do still in 2026 and beyond, refining that shelter mat shelter and bed matching tool, the high need client tool, permitting launches in February and April, HR one response. This grant will allow us to keep doing it. Because these are critical projects for the city, I think that can help to answer the question of what are you doing when it comes to matching? Because as the BLA analyst will likely talk to you about, there is a one third match on this grant. What I emphasize there is historically from the current Bloomberg grant we have, what I know is that Bloomberg has been very flexible about this. When we're investing in a project in which the mayor's office of innovation is involved, that counts. So for example, if we're investing in broader HR run response, that counts. We're investing in data integration for the city, the unified data platform, that counts. If we have volunteers working on our projects, that counts as an in kind donation. So lots of different options, lots of flexibility to get that match done. I do want to speak quickly to what the four new people are doing since we are asking for four new positions. So first, we're going to hire a service design leader, and their initial focus is going to be outcomes based contracting. What do I mean by that? Well, as I think you know, we're spending so much money, billions of dollars on homelessness response, health care, food, workforce development. These are essential services for San Franciscans. Often we are spending this money with nonprofits. Often these contracts are getting very long and very convoluted. And so what we want to do is take a fresh look at how are these contracts, these partnerships, these billions of dollars actually delivering results for people? How do we measure that? How do we incentivize better performance? So that's what that person's gonna work on. We'll have another designer who's gonna be working more on the homelessness and HR one projects I just talked about because, as you can imagine, these are not just one person projects. They need a bit more support than that. We'll have a data scientist who's going to be working also on how we can drive better results on public safety, on transportation capital project delivery, and finally a product manager who's going to be working on just engaging our ecosystem of innovation, companies, philanthropy, academia, residents, the students that you saw today, everyone can contribute to innovation. Anyone can contribute new ideas to government. And so this person will be working with them on, for example, sourcing and piloting ideas to keep streets and neighborhoods safer, piloting technologies helping us maintain long term leadership on innovation. Lastly, because this is the budget committee, I do want to end by talking a little bit about our project's ability to help us deliver results for residents and improve the city's budget financial sustainability. I think we have a great opportunity here to show that we can do both, that we can deliver residents and not have to add to our budget deficit every time. So for example, with police officer hiring, we can deliver savings on the police overtime budget. On homelessness, if we're placing those high need clients in long term care and housing, it's better for them. And the city budget, if there's fewer ER visits, fewer hospital stays, we're going to be looking for better value for money on those contracts, on time, on budget, delivery for transportation capital projects. These are just a few examples of ways where our projects can serve both our budget priorities and San Franciscans at the same time. So in conclusion, I'm asking for your support and bringing more resources to San Francisco to find new and better ways to serve San Franciscans. Thank you.

[Nick Menard (Budget & Legislative Analyst’s Office)]: Item 11, this is a ordinance that would authorize the mayor's office to accept and expend a $7,000,000 grant from Bloomberg philanthropies. It amends the annual salary ordinance to add four positions to the city administrator budget, and then also approves the grant agreement for the grant award. This funding so this is $7,000,000 that will fund five positions at the mayor's office of innovation and then the four new ones that are being created here for the next three calendar years starting January 2026. The grant does have a 30% match, or $2,300,000 The mayor's office intends to fundraise for about half of that and then use related but existing general fund spending to meet the other portion of the match requirement. There's no fundraising to date. But my understanding is that the fundraising will be used to fund positions once the grant expires in three years. If the fundraising is unsuccessful, this would be a general fund cost of about $2,500,000 for these positions. So we can evaluate the status of the fundraising in this upcoming budget in the next couple of years to see if the positions are, in fact if the fundraising has been successful and if are continued if the positions are funded by the grant going forward. When we look at the positions in the budget, there's about a $300,000 funding gap each year if everyone was at the top salary step, even with this grant. I believe, after talking to the mayor's office of housing, that they're not expecting everyone on the team to actually be at that top step. And so they really do believe they can fit the $7,000,000 at least over these next three years to fully fund the positions in the budget. But again, we can look at that during the budget process going forward. But I think this grant now does allow the city to pay for existing staff costs, so we recommend approval of item 11.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. You're saying that you're currently, it's going to grow to a 10 people team. Are they actually filled position?

[Florence Simon (Director, Mayor’s Office of Innovation)]: The six people that are existing so it's six people right now, and we're looking at ways that we can bring on four more people.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And are they filled?

[Florence Simon (Director, Mayor’s Office of Innovation)]: The six positions that are existing are filled.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: And then the four are not?

[Florence Simon (Director, Mayor’s Office of Innovation)]: The four we are looking at ways if we can bring on temporary folks, but of course we want to wait for the budget ordinance to be happy bringing on permanent staff.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Oh yeah, you absolutely have Yes.

[Florence Simon (Director, Mayor’s Office of Innovation)]: You should

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: wait. And how is the fundraising going for the positions?

[Florence Simon (Director, Mayor’s Office of Innovation)]: We have started some initial fundraising conversations. It seems that folks are really excited to be funding government innovation at this moment. What I will say is that if and when we are able to pass this resolution or pass this ordinance and be able to announce this broadly, I think that will generate a lot more energy and enthusiasm for fundraising.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: What is your plan if you don't raise the money by the time that June comes?

[Florence Simon (Director, Mayor’s Office of Innovation)]: The June?

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: June is for budget.

[Florence Simon (Director, Mayor’s Office of Innovation)]: We don't need to raise the money by the time that June comes. Bloomberg You do?

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Because Yeah. I mean, I think that what is happening here is that you will if this money is actually so the budget and legislative analyst indicating that if you do not raise the remaining dollars, then it will come out of general fund for

[Florence Simon (Director, Mayor’s Office of Innovation)]: this Oh, no. Okay. Yep. I can speak to that. So the way that the the budget works for Bloomberg is that they actually are encouraging us to spend as much of it down as we can. So we are actually able to spend down all of the grant within the next three years. And then if there's a gap, and I think the gap in total would be about three months at the 2028, then at the 2028, we would need to have conversations in 2028, or fundraising conversations, or budget conversations. But we don't need to raise the money by the time that June comes because we're able to use the full amount of the grant in order to cover all the salaries and then push out that last gap until 2028.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: But then when you hire the individuals, you are putting them on a contract until 2028.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Yes.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: But you are not fully funded from this point until 2028 for all four FTEs?

[Florence Simon (Director, Mayor’s Office of Innovation)]: Yes. Well, there's there is a three month, essentially, if we are gonna be funding the 10 or the nine FTEs because one is already funded, then we will have a gap of about $900,000 over three years. However, what the Bloomberg contract will allow us to do, and I know this because I have managed the existing Bloomberg contract, is it will allow us to push that out until the very end of the the grant and so this then that means the gap will not actually hit us until September 2028.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: So take that equally that's not how budget works.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Okay.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: For the budget it's two year two fiscal years projection. Yep. Right? For the the twenty six-twenty seven and twenty seven-twenty eight and that go along with the ASO which is really indicating the position. If you're not this is the reason why I'm saying you do need to actually have it by June as part of the budget unless someone wants to correct me if I'm inaccurate that in your budget in the mayor's budget proposal, by the time it comes to the board, that you would then indicate it whether it's fully funded with those position or not.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Yes. We will look at the position levels. We will speak with Bloomberg. And by the time that June comes around, I believe that given the position levels as well as the flexibility that Bloomberg gives us, it will be fully funded for the 2026, '27, and twenty twenty seven, twenty eight.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Great. That's the answer I was looking for. Yes. That you do have to get back to us by June Yes. Whether you're fully funded or not. I do want to actually say this, and this is what I say. I I think for anyone who has seen me doing this for the fourth year in a row, for any grant funded position I've said that to the public defenders too. For any grant funded position, with the terms of the grant, it should be fully funded by the grant. And if there were general fund involved, it will be up for the budget process discussion because now you're pulling into general fund and meaning they are general fund. And that it will not necessarily be I will not necessarily be supportive for general fund position. Not to mention the project that you indicated, which is the homeless individuals using the ERs. I believe this will be the third year of this very ongoing project.

[Florence Simon (Director, Mayor’s Office of Innovation)]: And

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: here we are still on the third year. It sounds to me, though, it's still listed as one of your top projects in your presentation, and that is well into 2028. How long do you anticipate or when do you anticipate this project will be completed that we can then understand the really, the structure or, like, the best practice in reducing the emergency or ER visit?

[Florence Simon (Director, Mayor’s Office of Innovation)]: I anticipate it will be completed by the end of this calendar year, so between September to December 2026.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Wonderful. Thank you. Supervisor Sauter.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Thank you, chair. I had a question on after the funds from Bloomberg, what other sort of engagement is there with Bloomberg philanthropies? Are they giving advice or direction? Are you meeting with them regularly? Do you meet with other similarly funded offices of innovation?

[Florence Simon (Director, Mayor’s Office of Innovation)]: Yes and yes. So we are meeting with Bloomberg once every month or two to discuss the projects we're working on. And we're meeting with other similarly funded cities probably once or twice a year.

[Supervisor Sauter (Member, Budget & Finance Committee) — identity uncertain]: Okay, good. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Vice Chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Great. Thank you, Chair Chan. I will say I'm a fan of Bloomberg philanthropies, and I had the opportunity in 2019 to work with one of them in Tobacco Free Kids. I really appreciate the work that they do. And I think one of the things that I have heard from people, leaders in the philanthropic community, about the rationale for matching grants is that they need to know that their partners have skin in the game on it. So I do appreciate that there's flexi it sounds to me like Bloomberg is appreciative of flexibility on this. One thing that is a priority for me, and I appreciate that this is actually mentioned in here about identifying drug treatment beds, for example. There's also something that I just want to flag that I really appreciate process improvements and new technologies to sustain Medicaid and SNAP benefits for recipients. In 2027, we're going to have new rules around Medicaid. And I believe that the estimate that I have seen is about, at least nationwide, one point six Medicaid enrollees who are enrolled in treatment for substance use disorder will lose insurance because of HR1. This is going to be the hammer is going to drop. And I really am worried about the progress that we're making on our drug crisis and getting people into well, suddenly, we're going to be in a very difficult situation. I'm really interested in that. And I think that's going to be really important. I see that it's in here, but I would just wanted to give voice to that is going to need to be something that we really focus on. Because unless there's something that changes, and it's not impossible that it will change during this election year, it's going to be really bad when HR1 takes effect on 01/01/2027 for Medicaid recipients, especially those in drug treatment.

[Florence Simon (Director, Mayor’s Office of Innovation)]: Yep. That's why we're starting now, to work on it. And we can keep you updated.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. And last couple questions. Wanted to just make sure we could include an org chart if you're growing the team for this office of innovation, that I would appreciate prior to again, I assume we're supportive of it. That will go to the full board of this item. So I would appreciate to have an org chart before it goes to full board for approval. And my last question is on this Office of Innovation, specifically for the Bloomberg grant. I asked these questions before. How is data sharing goes? Particularly, you're going to have a new data scientist on this. What does data sharing with Bloomberg and with the Citi look like?

[Florence Simon (Director, Mayor’s Office of Innovation)]: Oh, we're not sharing any data with Bloomberg. Not other than very high level, like forty four seventy seven people are experiencing this, 70% but there's no individual data going to Bloomberg categorically. Thank you. Alright.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: With that, we'll go to item number 12.

[Ali Bondi (Deputy Chief of Staff to Mayor Daniel Lurie)]: Good afternoon, Chair Chan and members of the committee. Good afternoon. Thank you. I'm Ali Bondi, Deputy Chief of Staff for Mayor Daniel Lurie. I'm excited to present this accept and expend request that would enable the city to launch a pilot effort to strengthen strategic private public partnerships. Today's action would authorize the mayor's office to accept and expend a $700,000 grant from Tipping Point Community to fund the salary and benefits for a director of strategic partnerships housed in the mayor's office. The grant would fund the position fully for two years and 50% in year three with the remaining 50% in year three coming from the mayor's office budget the position authority already exists It's just currently unfunded. So today's item allows us to stand up the capacity without creating a new position or ongoing obligation. Over the years, San Francisco has had different versions of this role, most recently, I believe, in Mayor Lee's office. And it's becoming increasingly common in other major cities as well. We all know that San Francisco has a vibrant philanthropic community. And when we do partnerships well, we can deliver more to our residents and communities than we could alone, whether that's on housing and homelessness, economic recovery, government effectiveness, or future areas. We're very pleased to have found a wonderful person to step into this role, Cynthia Wong. Cynthia is a proud North Beach resident, has a long history in non profits, philanthropy, spanning CZI, LISC, Bay Area, Seattle Foundation. She's the proud bilingual daughter of immigrants and grew up working in her family's restaurant. I am really looking forward to introducing each of you to her in the coming weeks. And with that, I respectfully request for your support and recommendation. I'm happy to answer any questions. And I also would love to read into the record a small retroactive amendment that's been distributed to all of your offices. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. Help me understand similar questions I had. So will this, as a grant funded position so I see that it's for two year calendar years, 2026 and 2027. So is that the term agreement also with Ms. Wong? Like she

[Ali Bondi (Deputy Chief of Staff to Mayor Daniel Lurie)]: No, she's at will.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: She's at will. Yeah. But I should say this but that she is expected that that her position is gonna last for two years. Is that what it is? Or what is the mayor's vision?

[Ali Bondi (Deputy Chief of Staff to Mayor Daniel Lurie)]: It's a this our vision for this is that it's a pilot. It may work. It may not prove to be worth having a position in the mayor's office for it may be something that we want to fundraise for and continue or it may be something that the mayor's office decides we can work into our own staffing model and keep it for years beyond that But don't want to we honestly, we're still developing the vision. And that's in part why we need Cynthia to come in and help us develop what is the true roadmap for public private partnerships.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: I appreciate the inclusive of the just job subscription like kind of help us understand like where you the mayor's vision like is is heading toward and so I appreciate with that. And typically, that would be totally enough. Mhmm. Except we're doing this retroactively. So I would also appreciate to have miss Wong's resume to be inclusive Oh, absolutely. Register. I mean, a job description usually is good. Sure. Yeah. Because then it goes out, we will know. But in this case, since it's a retroactive, I would appreciate that. I don't have additional questions. I think that clearly there's a need for, I think, along with some of our effort early on to grant the mayor and the mayor's team some mayor's team behest payment waivers that there was never a need or there was not a position to sort of cultivate those relationships and but also to help us track the waivers, it would be helpful to have someone that we can go to and say, how has the list of last six months been? And what is the list of waivers or donors and contact? I think that provides a level of transparency that I look forward to. So help us gauge, should the mayor comes back for another six months of waiver, it will help us have a better understanding how much we're accomplishing and what what more needs to be done. So I I appreciate actually having someone who does just that. Okay. I don't know if when if yeah. Okay. I'm going to leave it like that for now. I mean, think that we will I want to learn more about sort of what the end results that we're looking for. I mean, I can hear to see, like, the break the cycle fund and the whole listing of topics well, or issues that the mayors is trying to raise dollars for. So I look forward to seeing more details in the budget like meaning I think that there's a lot of things that identify here I concur with and would like to see how then with this position with the staff coming on board and how would that incorporate into our budgeting or not I think the last year when we start to providing the behest payment waivers with the understanding there are certain items I'm going to give an example like immigration defense fund that was part of waiver to say let's waive let's develop some funding and let's see where that money could be raised and come from and therefore during the add back process or during the budget process we have decided that there's a certain level of funding and programming that we we think we could probably delegate you know to actually have have the mayors who say, let's raise dollars for outside of the city and means outside of public fund. We'd love to see more of that in details in the budget that he's gonna propose in June to say, these are his visions Mhmm. And dollars and goals now that you have someone on board to help set fundraising goal. I think Yeah.

[Anya Worley Zigman (People’s Budget Coalition)]: That's that's

[Erica McClitus (SPUR)]: The priorities. Yeah.

[David Harrison (San Francisco Chamber of Commerce)]: Yeah.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Yeah. Makes sense. So I just wanna not to it's not explicitly discussed in the job scope, but that's probably what I anticipate to see in the budget process.

[Eliana Binder (Glide; End Poverty Tows Coalition)]: Understood. Thank you.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Thank you. I don't see any other name in the roster. Thank you for the presentation. Let's go to public comments for both items eleven and twelve.

[Brent Jalipa (Committee Clerk)]: Yes, if we have members of the public who wish to address this committee regarding these items 11 or 12, that was your opportunity.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Hi folks I'm anya

[Anya Worley Zigman (People’s Budget Coalition)]: ANNIE whirley WARLEY zigman with the people's budget coalition and this is a good thing that this is not being paid for out of the general fund but it' worth being wary of what this means when we are privatizing all of these important tasks of city government. This is something to really keep in mind, what happens when our next or future mayors are not as well tied with the funding community. Is this something that could be used as a cudgel in the future for the ultra wealthy to control the outcomes of San Francisco? And it's a good thing in the moment, but we have to be really wary about what we're privatizing and what we no longer control as San Francisco. It's also worth noting that so much of this is on community engagement and on outreach and coordination and not direct services that are going to be fundraised here, which is we have to point out that disparity a little bit when all of our providers at DPH just were notified about $17,000,000 of cuts because they do not provide direct services. None of this presented here today is direct services. This is all community engagement. This is all outreach. It's the very programs that are being cut that serve black and brown and queer San Franciscans. So that's a little frustrating. It's worth acknowledging. So that disparity coming out of the mayor's office is, are we going to pay $50,000 to operate a homeless oversight commission? Or are we going to fundraise $1,000,000 to pay a consultant to do that work that is done by the commission? That is what we're talking about. This is sort of the direct one to one comparison here. And this is sort of the steps in which the city will take instead of perhaps talking to nonprofits, talking to community members, talking to the people who are on the streets, actually doing this work. Although this is helpful to have people in this position. It's good that it's not going to be general fund. But it is worth keeping these disparities in mind on the paycheck that these folks will be receiving compared to the direct service providers. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you, Anya Worley Siegman. And Madam Chair, that completes our queue.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: Seeing no more public comments, public comment is now closed. Thank you and colleagues thoughts vice chair Dorsey

[Supervisor Matt Dorsey (Vice Chair)]: I would like to move this move that we send this to the full board with our positive recommendation

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: under I think we'll amend item 12. And then could I add to that motion Sure. To Roll call, please.

[Brent Jalipa (Committee Clerk)]: And on that motion by Chair Chan to accept the amendments in item number 12 and the motion by vice chair Dorsey that we refer the ordinance in item 11 and the resolution in item 12 to the full board with recommendation item 12 as amended vice chair Dorsey. Aye. Dorsey aye member sotter sotter aye chair Chan

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: aye

[Brent Jalipa (Committee Clerk)]: Chan aye we have three

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: ayes The motion passes. Thank you. Mister Clark, do we have any other items before us today?

[Brent Jalipa (Committee Clerk)]: Madam Chair, that concludes our business.

[Supervisor Connie Chan (Chair, Budget & Finance Committee)]: The meeting is adjourned.