San Francisco Government SmartTranscripts:

[Supervisor Connie Chan (Chair)]: Good morning. The meeting will come to order. Welcome to the 03/18/2026 meeting of the Budget and Finance Committee. I am supervisor Connie Chan, chair of the committee. I'm joined by vice chair, supervisor Matt Dorsey. Today, our clerk is Brent Halipa. I would like to thank, Jeanette, you Yukonov, for SFGOV TV for broadcasting this meeting. Mister 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 that 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 for your name to be 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 supervisors and also included as part of the official file. He may also send your written comments via the U. Postal Service to our office in City Hall at 1 Doctor Carlton b good that 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 March 24 unless otherwise stated madam chair.

[Supervisor Connie Chan (Chair)]: Thank you mister clerk and before you call item number one we will need to excuse supervisor Sauter. Can we please do that without objection? Okay. He is excused. And I would like to remind the public that we have budget and legislative analyst report for items two, five, six, seven, eight on today's agenda. For those items, we will have the department presentation first, followed by the budget and legislative analyst. Then we will take questions and then public comment. With that Mr. Clerk please call item number one.

[Brent Jalipa (Committee Clerk)]: Yes item number one is an ordinance amending the health and business and tax regulations codes to revise the definition of a mobile food facility permit had definitions for compact mobile food operations mobile support unit and permitted auxiliary conveyance permits to reflect recent amendments to the California retail food code revising existing definitions of various other terms to reflect state law definitions in that code and expand the definition of stadium concession to include food facilities and stadiums with a seating capacity of 5,000 or more established annual food per I'm sorry established annual permit and plan check fees for auxiliary conveyance, compact mobile food operation and mobile support unit permits, and waive license and permit fees for compact mobile food operations, amending the public works code to include a definition for compact mobile food operations and to expand the department of public works street vending authority to include regulation of compact mobile food operations and to require that that department to consult with the department of public health and the fire department on issuing new rules and regulations that regulate street vendors. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and in conversation with supervisor jackie fielder's office and seeing that there is also a request from the vendor group, what we plan to do is that we're going to duplicate the file today. And we're going to pass one out as previously amended. And Then we're going to continue the other one to the co chair that we so that allow us the opportunity to either create language for potential waiver or that we could either have a trailing legislation or within the legislation itself that we could address the issue around micro kitchen. With that I would like to go to public comment on this item.

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

[Supervisor Connie Chan (Chair)]: Seeing no public comment, public comment is now closed. And so with that, I would like to make the motion to duplicate the file and then to send the the one that is amended to full board with recommendation and to continue the duplicated file to the call of chair with that a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion, that we refer the ordinance and file number two five zero nine six seven to the full board with the recommendation, and that we continue the duplicate of this ordinance to the call of the chair. Vice chair Dorsey. Aye. Dorsey, aye. Chair Chan.

[Supervisor Connie Chan (Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Chan, aye. We have two ayes with member Soder excused.

[Supervisor Connie Chan (Chair)]: The motion passes. Mister clerk, please call item number two.

[Brent Jalipa (Committee Clerk)]: Yes item number two is a resolution approving the second amendment to the grant agreement between lutheran social services of northern california and the department of homelessness and supportive housing for money management services extending the grand term by twenty four months from 06/30/2026 for a total term of 07/01/2021 through 06/30/2028 and increasing the agreement amount by approximately 5,200,000.0 for a total amount not to exceed approximately 15,200,000.0 and authorizing h s h to enter into any amendments or other modifications to the amendment that do not materially increase the obligations nor liabilities or materially decrease the benefits to the city and are necessary or advisable to effectuate the purposes of the agreement. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and we have the homelessness and supportive housing here.

[Emily Cohen (Department of Homelessness and Supportive Housing)]: Good morning chair Chan good morning supervisor Dorsey Emily Cohen with the department of homelessness and supportive housing and I'm here before you today with the resolution to continue the Lutheran social services money management program this agreement was heard and approved by the homelessness oversight commission in February. The resolution is the second amendment to this grant agreement between hsh and lutheran social services and would extend the term of the agreement by twenty four months and would increase the not to exceed amount of the contract to just over $15,000,000 this and would continue the ongoing or would allow us to continue ongoing services for money management. Money management is a really important tool for helping residents in permanent supportive housing stay current on their rent and pay their most important bills which help stabilize their tenancies and prevent eviction for nonpayment. The way the program works is that it is something people can opt into. They sign up with Lutheran Social Services. Lutheran Social Services will receive their income from whichever sources it might be coming in from, pay their rent and whatever other agreed upon or requested bills that the participant has, and then receive the remainder cash back for the rest of their monthly spending money. This has been really effective. Eighty six percent of people who participate have achieved one of their financial goals eighty percent of clients have remained stably housed and you know not only is this somebody paying your bills for you and making sure you don't fall behind on your rent but there's also case management and financial coaching to help improve your financial outlook. We have seen a sharp decrease in payment of rent of permanent supportive housing tenants following COVID the COVID pandemic. And this has been one of our big tools to correct that, really encouraging people to sign up for this. We've expanded capacity by over 2,000 residents for this program. And with that Lutheran social services has stopped staffed up and have been very aggressively outreaching to tenants to encourage their participation in the program. And it's an incredibly cost effective program. It costs on average $13.73 dollars per tenant per year to participate in the program. And with that, I'm happy to take any questions after the BLA report.

[Nick Menard (Budget and Legislative Analyst)]: Morning. Nick Menard from the Budget Legislative Analyst Office. Item two is a resolution that approves an amendment to an HSH contract with Lutheran Social Services. The amendment extends the agreement through June 2028 and increases the value from just under $10,000,000 to $15,200,000 This would continue to fund Lutheran Social Services to provide money management services to people living in permanent supportive housing. The contract will continue to have a goal of serving or having an active caseload of 2,000 clients. We summarized the performance of the provider on page five of the report. You can see they're largely meeting the performance objectives of the agreement. And then on page six you can see that this is about a $2,700,000 a year contract for the next couple of years and it's about half funded by the general fund and half funded by our proxies. We recommend approval of item two.

[Supervisor Connie Chan (Chair)]: Thank you. And we do appreciate the work. It is critical. And so let's go to public comments on this item.

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

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed. I think the last it's not for this moment just overall just seeing the funding source where it's partly of that is 55% of it is coming from Prop C. And just I know that last year we had a conversation about the additional 19,000,000 That was the cap that could be incorporated into the upcoming spending. Wanted to learn more about that and how, overall, it's all being incorporated in terms of the spending in different categories. Thank you. And so, with that, I would like to move this item to full board I will move this item to full board with recommendation. A roll call, please.

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

[Supervisor Connie Chan (Chair)]: aye

[Brent Jalipa (Committee Clerk)]: we have two eyes with member sotter excused the

[Supervisor Connie Chan (Chair)]: motion passes the clerk please call item number three

[Brent Jalipa (Committee Clerk)]: yes item number three is a resolution retroactively authorizing animal care and control to accept and expend the gift valued in the amount of 100,000 from the wilt living trust in support of various animal care and control operational needs effective 09/30/2025. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you. And today we have the city administrator's office.

[Sophie Hayward (Office of the City Administrator, for Animal Care & Control)]: Morning, Chair Chan and Supervisor Dorsey. I'm Sophie Hayward from the Office of the City Administrator here on behalf of Animal Care and Control. And I'm here this morning to seek a recommendation of approval to accept expend a gift of $100,000 from the Wilt Living Trust. This gift will be allocated to Animal Welf to the Animal Welfare Fund, which supports operational costs for animal care and control, exclusive of personnel costs. The funds will support the mission to provide care for San Francisco animals in the city's only open admission animal shelter. And this gift to the welfare fund allows animal care and control to buy food, treats, and toys to provide enrichment for the animals in our care. Thank you for your consideration.

[Supervisor Connie Chan (Chair)]: Thank you. We look forward to a lot of treats for our animals. Thank you. And so, with that, let's go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Because 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)]: Seeing no public comments, public comment is now closed. Please extend our gratitude and appreciation to the wilt living trust for their contribution. I would like to move this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion that we refer this resolution to the full board with recommendation vice chair Dorsey. Aye. Dorsey aye. Chair Chan. Aye. Chan aye. We have two ayes and member sotter excused.

[Supervisor Connie Chan (Chair)]: The motion passes. Mister clerk, please call item number four.

[Brent Jalipa (Committee Clerk)]: Item number four is a resolution approving a port commission lease with dillon's tours inc, a limited liability company for approximately 1,500 square feet on the Ground Floor of a two story building located at 490 Jefferson Street for a term of five years to commence on 05/01/2026 through 04/30/2031 for an initial annual base rent of 72,000 with 3% annual increases and one five year option to renew. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and before I call on the San Francisco Port I would call on the aid to Supervisor Danny Sauter, who would like to make opening remarks.

[Tita Bell (Legislative Aide to Supervisor Danny Sauter)]: Good morning, Chair Chan, Vice Chair Dorsey, Tita Bell, legislative aide for Supervisor Sauter. I just wanted to offer a few remarks on his behalf, as he's not able to attend the meeting today. Before you is a resolution authorizing the Port Of San Francisco to enter into a lease with Dillon's Tours at the Port property at 490 Jefferson. This is a commercial space that's been vacant for fifteen years. And Dylan's Tours is a family owned, local, authentic tour company founded and operated by Dylan David, a native San Franciscan with deep community roots in North Beach. The company currently operates out of Columbus Avenue, and they're looking for a second location. Dillon's Tours offers small group and private tours in San Francisco, Muir Woods, Sausalito, and the wine country. They transport their clients on comfortable minibuses and open air vehicles. For the second location, they have committed to offering free shuttle service from Union Square to Fisherman's Wharf in order to entice visitors who may not otherwise make their way to the waterfront. This is a clear win for Fisherman's Wharf. It will breathe new life into a long vacant building and generate new revenue on a prime commercial strip in the area. We would like to congratulate the court and Dillon's on this exciting new partnership. And the supervisor hopes to have your support in moving this item to the full board with recommendation. And at this time, I'd like to invite up Scott from the Port to present on the details of the legislation.

[Scott Lancelot (Deputy Director of Real Estate, Port of San Francisco)]: Thank you. Scott Lancelot, deputy director of real estate for the Port. Good to be here again. I want to thank TITA and Supervisor Sauter for their great partnership in trying to improve the experience on Jefferson Street and The Wharf. I feel like together we're making great progress. As Tita pointed out, Dylan's Tours is local operator who really is excited about moving from his current location to a flagship down on Jefferson Street. We're here today because with options, spans a ten year term and was a retail process with a solicitation through Maven as broker to find the selected party, Dillon. Quick overview, 490 Jefferson sits on the North side, water side of Jefferson Street. This building has been vacant for some time. In total, it's 3,500 square feet. Dillon will be occupying the Ground Floor, really the street facing retail frontage of the property. Given that it's been vacant for a long time, there's significant deferred maintenance and hazmat abatement that the port and tenant will be doing in advance of opening, which we hope is later this year for Dillon. As I mentioned, Maven is a broker who was selected to solicit the space. And in early, well, last year, we engaged with Dylan in the final negotiation of the agreement. The agreement pays 6,000 a month in rent, has annual increases, has an option initial five year term, another option for another five that takes it to the 10. And the port participates in percentage rent over a $900,000 breakpoint this facility is also supported by an allowance a tenant allowance the port will be providing of $320,000 to facilitate some of those deferred maintenance and capital repairs that I mentioned. And with that, I will answer any questions. Thank you.

[Supervisor Connie Chan (Chair)]: Just kind of curious, looking at the map itself, or the location itself on your slide. So I see the premise, but there's a parking lot behind. Will the Dillon's tour utilize a parking lot behind it for their tour vans?

[Scott Lancelot (Deputy Director of Real Estate, Port of San Francisco)]: The vans will not be stored there. So they actually we are giving them a license area next to the facility on Jefferson where they will be able to park a single van, really more as a marketing opportunity for Dillon to attract foot traffic to the location and market his activation. But we will not be storing buses.

[Supervisor Connie Chan (Chair)]: And what about the pickup? Like, are they picking up there to go

[Scott Lancelot (Deputy Director of Real Estate, Port of San Francisco)]: to the hotel? They will be picking up at this location to start tours among a couple other locations that Dillon's runs kind of pickup points from. But this will be the main anchor location for the city.

[Supervisor Connie Chan (Chair)]: And for them to so would this be one of the pickup sites and drop off sites too?

[Scott Lancelot (Deputy Director of Real Estate, Port of San Francisco)]: Yes. Yes. And one of the things that I think is compelling about these too is that Dylan's really interested in engaging with adjacent restaurants and tenants that become potentially part of a tour experience where you might end and have a lunch at one of the restaurants nearby or something like that. As Tita mentioned, Dylan's also offering the shuttle service to and from Union Square, which I think is great just in further connecting these different tourist hubs.

[Supervisor Connie Chan (Chair)]: Yeah, nothing against the double decker. I do always appreciate them, like for hop on and hop off. Like it's always an experience to see and to be able to be on top and see the view of the city. But I also do appreciate this van shuttles style of being pick up and drop off, which is a lot more suitable for narrow streets, especially in Frischham's Wharf and around the city, around town, so that people can sort of being up and dropped off much easier, less inconvenient traffic flow, for Jefferson. It's narrow in terms of street good to know thank you we don' have any more questions we' go to public comment on

[Brent Jalipa (Committee Clerk)]: we' this opening public comment on this item number four we have any members of the public who wish to address this committee. Madam Chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed I would like to send this item to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion that we forward this resolution to the full board with recommendation of vice chair Dorsey. Aye. Dorsey aye. Chair Chan.

[Supervisor Connie Chan (Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Chan aye. We have two ayes with member sotter excused.

[Supervisor Connie Chan (Chair)]: The motion passes. Mr. Clerk please call item number five.

[Brent Jalipa (Committee Clerk)]: Just five or five and six together?

[Supervisor Connie Chan (Chair)]: Sorry my apologies five and six together please.

[Brent Jalipa (Committee Clerk)]: Yes madam chair item numbers five and six are resolutions approving and authorizing the director of property on behalf of the city and county to execute the second amendments to the following leases from k l w investments llc a california limited liability corporation extending the term by four years and six months from 03/31/2026 for a total term from 07/01/2015 through 09/30/2030 and granting a five year option to renew the leases for continuing use by human services agency and authorizing the director of property to enter into any additions amendments or other modifications to the lease that do not otherwise materially increase the obligation nor liabilities of the city to effectuate the purposes of the respective leases and resolutions item number five amends the lease of approximately 11,000 square feet of office space at 3,119, 3125, and 3127 Mission Street had an annual base rent of 410,000. And item number six, amends the lease of approximately 39,000 square feet of office space at 3,120 had an annual base rent of approximately 1,200,000.0. Madam chair.

[Supervisor Connie Chan (Chair)]: Thank you and today we have our human services agency here.

[Alfie Penaflor (Director of Facilities & Administrative Operations, Human Services Agency)]: Morning, Supervisor Chan and Supervisor Dorsey. My name is Alfie Penaflor, and I'm the Director of Facilities and Administrative Operations with the Human Services Agency, here just to introduce our space at 3119312025, And 27 Mission Street for our real property lease agreement. Our Mission Campus is a building for our economic self sufficiency and support services. And we have a service center there that supports our clients and the community. I have with me today managers, are site managers, Gabriel Jones and Dore Gonerra, who can give you a little bit more information on the services that we provide at that location.

[David Cruz (Spanish Interpreter)]: Thank you.

[Gabriel Jones (Business Service Manager, HSA Workforce Development)]: Morning, Supervisors. I'm Gabriel Jones. I'm the business service manager for the Human Service Agency for the Workforce Development Division, specifically. Many people know it as JobsNow. We've placed well over 35,000 San Franciscans, and going up. And more than that, we've connected with the community to offer not just CalFresh, CalWorks, MediCals, SF Benefitnet, but placement into permanent city jobs through our PST program, the Public Service Training Program, for decades. Were a multiuse facility we even have edd station there as well we work in the community with the private sector with our on-site training programs which is wage subsidized we also work with ucsf with the excel program medical assistant and placement we' been very successful with our outreach, and we collaborate with OED, and a variety of other mixed use organizations that provide workforce services. Thank you for your time. I would like to also introduce Dora, who co manages me at the site. Hi,

[Dora Granera (Program Manager, San Francisco Benefits Net)]: my name is Dora Granera, and I'm the program manager for SFBN, San Francisco Benefits Net. And what we do there is we help our Medi Cal clients and our CalFresh clients. We do see our primary clients are Hispanics, Spanish speaking, but we do also see all other languages. And we help them all if they come into our office. So, we do connect with the other programs that are there, CalWORKS and WDD. We make referrals to the JobsNow program. And we help the clients, you know, apply for their benefits. We also help maintain their benefits. They come in to get assistance from us for renewals for CalFresh and Medi Cal. We also help them get their EBT card and their Medi Cal BIC card. And so, we make those referrals as well, since we have distribution there. So, our center for SFBN opened last year. So, we have

[Natalie Ortiz (Community Leader, Mission District)]: a year

[Dora Granera (Program Manager, San Francisco Benefits Net)]: there, and it's increasing slowly, but it's increasing, especially because of word-of-mouth. And I personally was able to hear some clients tell other clients that we were now there. The Medi Cal office is now at 3001 20. So, is, you know, getting knowledge of us being there, and clients are coming in, and we are helping them establish. And so we are there for the 94110 area and 94112. However, we do help clients from any other zip code. Thank you.

[Sally Orth (Director of Real Estate, City and County of San Francisco)]: Good morning, Supervisor Chan, Supervisor Dorsey. Sally Orth, Director of Real Estate. And I'll just briefly go over the terms of the lease extension for you. So together, these two sites comprise a little over 50,000 square feet. And the lease term will go from 04/01/2026 through September 2030 with one option to extend for a five year term. The annual base rent will be a little over $1,600,000 with a standard 3% annual increase per year. We were able to negotiate a $371,000 rent credit from a retroactive adjustment, which is going to be applied to the tenant improvement project at the 3120 site. But the good news is that with this lease extension, the city is able to reduce the current rent over $685,000 annually, which totals over $3,000,000 in reductions over the term of the agreements. At the 3120 Mission site, the tenant improvements I mentioned are going to include restroom expansion and upgrades, break room improvements, and some associated mechanical, electrical, plumbing modifications for a net cost to the city of $47,336. I'm happy to answer any questions that you may have.

[Nick Menard (Budget and Legislative Analyst)]: Items five and six are two resolutions that approve lease amendments that HSA has with KLW Investments. These leases provide office space for HSA and the mission for eligibility workers and essentially a satellite office for HSA programs for clients in that area. We summarized the lease terms on page 10 of our report. You'll see that the lease rate is going down from a current $46 per square foot to $37 per square foot because the lease amendments basically reset the market rate of the lease and are backed by real estate comps in the area. We show the fiscal impact on page 11 of our report. You'll see that the city in the first year of the lease would pay $1,500,000 and then in addition to that pay $47,000 for the tenant improvement project that was mentioned. All of these costs are paid for by the general fund and we recommend approval of items five and six.

[Supervisor Connie Chan (Chair)]: Thank you. Just a quick question about these sites. It's been there for quite some time, and have there actually been coordination like across like the services and and just kind of show us it's been demonstrated that truly it's really a model like where you have city services a variety you know be it for children services and then be it for jobs and training and just being located in such a short distance or close adjacent to each other. That has been proven really work out for our constituents.

[Alfie Penaflor (Director of Facilities & Administrative Operations, Human Services Agency)]: Yes, Supervisor Chan. We've been in this building for fifteen years, and originally it was a WD workforce development. But in recent years, it has become a one stop center for us providing SFBN services. And, also, Family and Children's Services is also actually located in disability. And, they have a small unit to support those on the Mission District for our clients who are in the area. And across the street, the 3119 Mission is actually a building that we provide to our CBO, the Seneca Unit, also who are part of the Family Children's Services. So there is not just SFBN, WDD, but other human service agency program in this building that our clients and the community can benefit out of.

[Supervisor Connie Chan (Chair)]: Thank you. So with that, let's go to public comments on this item.

[Brent Jalipa (Committee Clerk)]: Yes, we're now sorry, opening

[Supervisor Connie Chan (Chair)]: but for

[Mr. Wright (Public Commenter)]: both Yes,

[Brent Jalipa (Committee Clerk)]: we are now opening public comment for both these items five and six. If we have any members of the public, wish to address this committee. Madam chair we have no speakers.

[Supervisor Connie Chan (Chair)]: Seeing no public comments public comment is now closed. I would like to send these two items to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion to refer both resolutions To the full board with the recommendation of vice chair Dorsey. Aye. Dorsey, aye. Chair Chan.

[Supervisor Connie Chan (Chair)]: Aye.

[Brent Jalipa (Committee Clerk)]: Chan, aye. We have two eyes and members are excused.

[Supervisor Connie Chan (Chair)]: The motion passes. And mister clerk, please call item number seven.

[Brent Jalipa (Committee Clerk)]: Item number seven is a resolution approving an infrastructure facility project agreement with prg portero properties llc for the design construction and financing of a bus storage and maintenance facility for the Portero Yard modernization project which project agreement provides for a thirty year term commencing after substantial completion scheduled for 2030 and expected to end in 2062 milestone payments of 65,000,000 at or around financial close and $250,000,000 during construction, a 5,000,000 development fee payable after substantial completion, annual availability payments commencing approximately one year after anticipated substantial completion and continuing through the end of the term projected to start at approximately 33,000,000 with an estimated cumulative total of approximately $980,000,000 potential delay event or termination compensation all as provided in the project agreement and as estimated not to exceed amount of approximately 1,400,000,000 expressed in nominal dollars and subject to adjustment on the terms of the project agreement affirming the planning department' determination under the California environmental quality act and approving for purposes of the internal revenue code of 1986 as amended the issuance by the California municipal finance authority of tax exempt obligations in an aggregate principal amount not to exceed 900,000,000 to finance the cost of the project and making related findings and determinations related thereto. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you Mr. Clerk I would say that what a full circle I think I appreciate I want to make the remark that this project has been long time actually even before these any of these agreements. Was in fact, I think this is interesting dynamic here that I was a to supervisor Sophie Maxwell who was the land use chair when this project was in discussion, which, Director Justin True was A2 Supervisor Gerardo Sandoval, who was also a member of the land

[Brent Jalipa (Committee Clerk)]: use committee,

[Supervisor Connie Chan (Chair)]: my memory serves me correctly. And so this has been a long time coming, I think. But it's just interesting where we're landing, but not surprising. I have a lot of thoughts, and I have a lot to say about this project. But I think I'm going to let SFMTA make the presentation today, and then we will have the BLA report. And then I would like to really provide some thoughts the entire history of this project beyond of what is before us today. So the floor is yours.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Thank you so much, Chair Chan, Supervisor Dorsey. It's great to be here today. My name is Judson True. I'm the Chief of Staff and Director of External Affairs for the San Francisco Municipal Transportation Agency. I'm joined today by Bonnie Jean Vungroe, who's our Public Affairs Manager, who's going to help with the slides. And we, of course, have other colleagues and department partners and many others today. I do want to start off, if you'll indulge me briefly, recognize that today is Transit Employee Appreciation Day. And so I really want to thank not only my colleagues at Muni and the SFMTA, but all the transit employees around the Bay Area and the world that keep us moving. So thank you very much for letting me do that. And I do want to just start in on a presentation on this project. As Chair Chan, as you've noted, it's been a long time coming. You know, I think that bringing this project agreement to the Board of Supervisors for approval is the culmination of more than eight years of work on the PetroRio yard modernization project. I think, as you've recognized, Chair Chan, it's actually more than eight years, that's sort of the formal timeline. But I think there were discussions going back to our days here walking these halls in the aughts. That history is important. I do want to emphasize that delivering a new Patrero yard is the highest priority for the SFMTA's Building Progress Facility Improvement Program. And with our Train Control Upgrade Project, it represents one of the two most important capital projects for the SFMTA in the years to come. A little bit about the project. I think the project need becomes clear very quickly. At over 111 years old, the existing patrol yard is functionally obsolete. Staff have been challenged by space, equipment, working conditions, going back to 1915 standards, when the horse drawn cart was the predominant mode of transit in the city. This has slowed down. This obsolescence has slowed down bus maintenance, repairs, and of course made it very hard for our staff. The yard has been operating at crush capacity, and is too small to accommodate needed growth of muni service. And, to continue to operate this yard, which we are not doing now, as I'll get to in a moment, puts both lives and property at risk from a major seismic event because of the antiquated nature of the facility not being up to today's seismic standards. The project scope should be fairly familiar. It's a new modern four level infrastructure facility. It's going to allow us to operate our transit service much more efficiently, and allows us to add about 100 trolleybuses to the capacity of the yard. We're also moving our training functions there, which will help us bring in each successive generation of muni operators. And, you know, because we this facility is, of course, in a dense urban area, we also are working to improve the streetscape around the project. I think it's important to emphasize here that that it it may not always be as obvious as it seems, but the bus yard is crucial to all of the muni service that you see on the street every day. It's it's It's a piece of infrastructure that is not a nice to have, it's a must have for the muni service that we get out on the street every day. The Potrero yard roll in particular, as you can see, it's essentially tied with Woods as one of the busiest yards, the busiest yard in our system, serving a little over a fifth of our total ridership. And, I do want to emphasize, in particular, that equity is at the forefront of the service coming out of PetroRio Yard. All five of the routes served by muni service coming from Petro are muni service equity routes that they serve neighborhoods including low income households, many people of color, and those with the fewest transportation options in our city. I do what I think it must go without saying for any project that's almost a decade in the making, but this project has been a tremendous collaboration effort across, you know, many city departments and partners outside the city, of course. Without their expertise and devotion of so many city staff and community partners, a project would not be possible. I do want to take just a moment to thank a couple colleagues, some of whom are here and some of whom are not here today, of course. Victoria Wise, who runs the street division that this project is under, Sean Kennedy, on her team, Perand Malecki, Chris Lazaro, Tim Kempf, Bonnie Jean, Von Crow, John Angelico, and Caroline Cabral, among many others who've been working on this project, in some cases for close to the length of the project. And then, we do have colleagues here from the Planning Department, and the Mayor's Office of Housing and Community Development as well. At different points, they've been essential partners, and we've also worked closely with OEWD, Public Works, and of course our city attorneys as well. I think when you boil this project down to what it's about, it's really about the muni service and about the staff that work at this yard. The project has widespread support among muni staff. They know firsthand the inefficiencies, drawbacks of working in the outdated yard today. And, what you see here is a few quotes from some of our key staff who have, or just representative and leadership staff on the maintenance side, have experienced the challenges of the yard, and look forward to a new one. We did cease to serve out of this yard last month, and that is part of this transition. And we were able to celebrate both with current employees, and as you can imagine, many employees have been coming to this yard for years, if not decades, and some people who used to work there came, and we celebrated them. And then we also joined some community members for the final pull outs of the yard recently on Valentine's Day actually in February. So again, just marking that important milestone. We are at decision time for the project. Following the approval of the project agreement, we plan to prepare the site for construction with significant construction starting later this year, early next year, and and some prep in the summer. Construction would last about four years, and the new yard would be slated to open in 2030. If this project agreement is improved, the housing development on Bryant Street, which I'll get to in a moment, can proceed with applying for their affordable housing funding sources and getting that project going. I do want to show a brief look at the project's evolution, specifically noting the variants that were entitled just a couple years ago in 2024. Development of the housing on the podium, and of course, and on the bright side, always subject to funding sources and availability, which is why we plan two variants. In the upper left, you see the version that includes the proposed four sixty five units of housing affordable and workforce. And in the lower left, the variant shows our intention to have Muni's paratransit fleet parked above the yard if the housing had never materialized. In either variant, the 100 units of proposed affordable housing on Bryant are shown. So you can see that on the photo on the right hand side, on the bottom right of that photo, where it says proposed Bryant Street housing. The final project has clearly been impacted by the SFMTA's financial crisis, and increasing development costs, and the challenge of development in general right now. Construction costs, interest rates, market volatility have all escalated since we started engagement on this project in 2018. It's worth noting, just since we did start in 2018 formally, we had a pandemic that intervened there, and the world is very different than it was when we started that. And I want to fully acknowledge that we had to make changes to lower the cost of the design and the construction. And on the right, you see the final project after those changes, where the and I'll get in a little more detail, but clearly there's no roof there, and the buses and washing are on the top. Again, I want to be clear and acknowledge and apologize for the fact that the scope of the overall project has been reduced from the original vision of a bus yard with housing or paratransit on top of it in order to reach an affordable price and make the project financially viable. We made a number of changes, and I think you'll hear from some of them from the budget analysts, like removing the public private partnership operation and maintenance of the project, but I want to focus on the decision to remove the roof and the podium, and therefore, potential for housing above the project. A major upfront cost was the reinforced podiums to support housing or paratransit above the bus yard. Removing the podium made the project affordable for the MTA, but unfortunately eliminated the opportunity to construct housing or paratransit above the bus yard. That was an extremely difficult decision, but it is what makes the project financially feasible today. We also want to clearly recognize that we approached this project and this change to the project as a technical process to reduce costs, but we should have highlighted the challenges to the community earlier in the process. We want to be upfront about that, and identify that learning moment where we wish we had improved our outreach and communication, and it's something that we intend to work on in the future. The changes to the project allow the MTA to move forward with developing a modern bus yard while still enabling the production of affordable housing on public land of about 100 units along that Bryant Street frontage. At the left, can see slightly more sketched out rendering of the Bryant Street housing, and at right is a view of the bus yard. The project has done incredible amount of outreach over the years, led by, in recent years especially Bonnie Jean and her team. They've done comprehensive bilingual outreach, meeting people where they are in the community. I was able to go some working group meetings last year, one in particular, the one where we talked about the housing, and I was just impressed by the level of engagement there. In the last five months, there have been 26 community meetings talking about the project changes. And I do want to specifically acknowledge the work of the Pretoria neighborhood working group. That started meeting in late twenty eighteen, and we recognize that many of the members of that group are frustrated and disappointed with losing even the possibility of future housing above the bus yard. Development projects like this one are impacted by many factors outside of our control, and again, a lesson learned here is that we must do better about highlighting those risks as we as a project proceeds. I do want to emphasize that many of the public amenities that got developed in consultation and collaboration with the working group and other community members are retained in the project, and I just outlined some of them here. There's a publicly accessible community room. I know as someone who's been going to community meetings in San Francisco for much of my career, it's really important for community members to have a great place for their neighborhood groups to meet, and we're going to be excited to provide that. There's a public restroom near Franklin Square, which will serve the park goers. And again, I mentioned the streetscape improvements. We've got some updated bicycle infrastructure in the vicinity, and again, the affordable housing on Bryant Street. Slide. So now we're here to talk about the project agreement. And Chair Chan, you'd like me to pause so you can recognize the addition of one of your colleagues, I'd be happy to do that. No? Alright. Welcome, Supervisor Cheryl. So following months of challenging negotiations, the SFMTA and our development partner, because this is a public private partnership, the Portrero Neighborhood Collective, have reached a final fixed price of the bus yard totaling $612,000,000 Like purchasing a home with a mortgage not something I've done, but I've heard about this the new Petrero Yard will be financed over a thirty year period through that public private investment. The SFMTA and you've heard some of these details when the project was last before you, Chair Chan, in late twenty twenty four. But so some of this might be familiar, but we must make two milestone payments before and after construction. One of them is now $65,000,000 and one is $250,000,000 which together are similar to a down payment on a new home. And then we must make availability payments of $33,000,000 per year over thirty years, similar to mortgage payments. I want to note that none of that funding can be used for housing and is only available for the bus yard. The process to reach this affordable price has not been easy. The project agreement locks in the final price, and any delay now would require repricing the project, which would very likely make it unfeasible and unaffordable for us to move forward. We are excited that the project is now governed by a project labor agreement, which promotes efficient construction, ensures adequate supply of skilled craft workers, and just helps with any potential labor disputes. We're glad to see that in place. And then finally, again, the project does enable the 100 units or so of Bryant Street housing. Those range from studios to three bedrooms. Construction, like any affordable housing project, is dependent on the project successfully competing for a variety of funding sources, but we look forward to be a partner there. We do not fund housing, but we are providing the land at a significant and not a very significant cost. Our board did approve, essentially, a term sheet, or a lease and disposition and development agreement, at our board meeting two weeks ago. And, the ground lease for the affordable housing will come before you in the next few years as the project proceeds. This is more of a request. We obviously know you're going to hear from the budget analysts, and we welcome the amendments that the budget analysts and legislative analysts are suggesting. We do have another suggested amendment that we have shared with your offices that responds and puts in the record some issues that were raised at our the MTA board meeting on March 3. And, that's here on the screen. At the right moment, it can be read into the record, I'm sure, but essentially just adds a whereas clause to, again, note sort of provide the breadcrumbs in the file of how this project interacts with the approved housing zoning plan and approved city housing plan, housing element that you all have acted on. I think that that is the conclusion of my presentation. Again, I want to appreciate everyone who's here today. I know we're going to hear from many in audience as well, and look forward to hearing from the budget analysts and then engaging with you, Chair Chan, Supervisors Dorsey and Cheryl, on this crucial project. Thank you.

[Nick Menard (Budget and Legislative Analyst)]: Item seven is a resolution that approves an agreement between mta and petrero properties l l c in which the vendor would secure financing, design, and construct a new bus facility at the Petraro Yard. The agreement has a thirty year term and a cost of about $1,400,000,000 Since we last looked at this agreement when it was at the board in December 2024, there have been a number of changes. At that time, we pointed out that that agreement, the prior version of the agreement, had an operation and maintenance component which was five times more expensive than what MTA was spending at the time for its own operations at that site. And in addition to that the financing cost of that agreement was about $120,000,000 more than if the city self funded this construction project this agreement actually addresses both of those points it removes operation and maintenance from this agreement saving about $706.06 $76,000,000 and it restructures the financing to essentially be equal to what the city would pay if it issued a bond to pay for these costs saving about $283,000,000 on the agreement We summarized the changes to the agreement on page 24 of our report. You can see it's about $1,000,000,000 in savings. In addition to that, the MTA went through a value engineering process to rescope the construction project to make it more affordable. The major change that we know in that table is that it reduces the capacity of the building to have housing on top of it. That's $160,000,000 savings over thirty years. As we show on page 25 of the report, this agreement, it's not it's a little unconventional. It's not like we issue a bond and then pay the debt service over thirty years. Instead, there are two milestone payments, one of $65,000,000 when the financing's secured, one of $250,000,000 once the building is complete, and then annual payments of about $33,400,000 for the thirty years after the building is constructed to essentially pay off the debt that the developer took on for the project. But again, there's no operation or maintenance component. And we can show on page 25 also the various funding sources to the extent that they've been secured for this agreement. The milestone payment to that $250,000,000 payment, dollars 200,000,000 is coming from the Easter bond that's scheduled for the June 2026 ballot. If that bond doesn't pass, there is another opportunity to go to voters to secure that payment before that payment would be due around 2030. We do recommend approval of this agreement we do also recommend that the resolution be amended to remove the word estimated from the resolution, as well as language around stating that the not to exceed amount can be changed subject to changes in the agreement because this $1,400,000,000 already has a contingency built into it to accommodate, changes between now and when the agreement is finally executed. Happy to answer any other questions.

[Supervisor Connie Chan (Chair)]: Thank you. I think that it's been long debated that for this specific site, whether it's a possibility to have a patrol yard or bus yard and then have housing on top, I think it's been a long conversation since I was a legislative aide to supervisor Sophie when she was the Land Use Committee Chair. And I think that there was a lot of concerns and how would that look like. And I think eventually, thanks to Supervisor Shimon Walton and Supervisor Hilli Ronen, I think there was a lot of effort along with SFMTA to be creative and innovative, recognizing housing is important, and that what we can do on public land, and in this case, SFMTA land, that if we have the opportunity to build a need that we need for a new bus yard then what can we do on top of that space so that we can have housing and will be a collaboration and creative and it will be something that meet all the needs. Because we have done something very similar to in San Francisco. And I think most recently, this very body has approved a project where there will be a hotel in downtown and then which allows the developer to also build the city a new fire station in the very same area adjacent to it. So it is disappointing for me to learn that today we're looking at a design that no longer have housing on top and that we significantly have lost numbers of affordable housing units. I am disappointed that SFMTA have made this decision without allowing more thought specifically to say, why are we cannot build housing on top right now because it's not feasible? That we could do whatever we can in the existing design, that be it reinforced podium, particularly to then allow for the future possibility. I get that is a cost saving for the design, but I think that there isn't a concrete effort that to say the fact that we are we' been supporter of sfmta to be part of the two you know twenty twenty six June bond that is actually not scheduled for to to be included there to say let' put in $200,000,000 of this $535,000,000 bond, which is almost half, to go into a patrol yard that I wish that we have more conversation and or more effort to say, well, within that bond dollars and what we can do to have a reinforced podium allow future opportunity. And I frankly, I also think that if we do that, I I think it will ease a lot of financial burden for developers to be able to come in and say, now we can talk. Now we can actually, like, you have sweetened the pot. So maybe we can now build housing on top. Besides this 100 something units of affordable housing on Bryant Street, we can be more creative and we can think bigger. For all the fights that we have last year about family up like family zoning plan and up zone and how we can build more and how we can build higher and denser so we can have more housing. This is a significant reduction and rollback from the city itself. And I am I'm befuddled. I I I am confused. I would like to see that today's discussion. I am supportive of what we got today because I think that it is important to have what we have. But I am not going to walk away today with ongoing conversation and, frankly, a commitment from SFMTA and from the mayor's office and from the mayor to say that we are going to figure out financing and possibility and design for a reinforced podium so that we can build housing on top, to not to give away that opportunity, and that we're going to do everything we can in figuring out with any developer available to us for to fulfill our obligation of the four sixty five units of affordable housing and that could be on-site and also including off-site at this space. I think that I would like to see a commitment a written commitment from sfmta and from the mayor and with with that commitment before next full board meeting. My thought is that we're probably in support I am in support of this as of today and would like to send this out to full board so that we can then continue that discussion and have that conversation. This has to move forward, I believe, to get the project going and get it done. But I'm not going to be in support of it on Tuesday if I don't see a commitment from SFMTA and from the mayor to say, we are going to figure out either additional financing or for meanwhile, because you're not gonna start construction, like, end of year. You're you're gonna you're gonna there's gonna be some time before you you're able to do that. I would like to see the effort of, from the mayor and SFMTA. I know you cannot fund housing, but what you can fund is a reinforced podium to then allow housing to come on top. So I want to see a commitment, written commitment to say that you will do that. That the we is it certificate of participation? Is it some other way that the city actually can utilize to add to the the project so that you can actually build reinforced podium or roof. So you'll last housing on top at a later date. And that could be something that I think is actually where the vision we all align. We want more housing. It can be done so why don'92t we do it is where I'92m at. Vice Chair Dorsey.\ Thank

[Supervisor Matt Dorsey (Vice Chair)]: you Chair Chan. I agree with much of what you said. I did want to tease out, if I might, financing from the EASR bond. It's my understanding from milestone payment number two is, I believe, dollars 200,000,000. It says $250,000,000 but I believe 200,000,000 of that would be from the EASR bond.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: That is correct, superintendent.

[Supervisor Matt Dorsey (Vice Chair)]: Before voters now I have sometimes heard and not just this EASR bond but previous ones over the years There are sometimes questions when there's a bond funding that's not specifically for emergency services people wonder why it's important. I always remind people that this is this this bond is called the the earthquake safety and emergency response bond can I just invite you to explain why this is important in terms of earthquake safety that this is a valid expenditure if it is

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Thank thank you, supervisor Dorsey, through the chair? Absolutely. Judson True again, chief of staff at MTA. So, the Petroyard project qualifies under both all of the letters of the acronym, emergency safe, earthquake safety and emergency response. So first of all, as I as I mentioned, the the building is a 110 years old. It is, to call it seismically unsafe is to, understate understate the case. And so it's very important for city buildings where people are working, doing things like maintaining our transit fleet to provide essential muni service, that those buildings are resilient and that they're they're going to exist after a significant seismic event. So that's sort of the baseline. I also want to emphasize how Central Muni is to the city's emergency response after a major event. We can transport first responders. We can move people around as needed. And having a modern, seismically safe facility is an important part of the city's response to emergencies. So we and I think one of the things that the conversation around the bond and I do want to thank all the supervisors for their support of the bond with the $200,000,000 for Petraro Yard that that did, is it's even further strengthened those conversations with the Department of Emergency Management, of course, the mayor's office, the fire department, and others. And so I think that we we have we make we believe very strongly that we are properly know, that that the Patroia Yard project fits well within that bond. Thank you.

[Supervisor Connie Chan (Chair)]: Supervisor Sherrill, and welcome.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: Thank you, chair Chan. I'm I pretty disappointed about the reduction in the affordable units. And so I want to make sure that I understand the financial considerations of all this. So basically, if I'm reading this all correctly, not building the podium that would allow the three sixty five additional units or whatever, that podium costs $70,000,000 to build. Is that about right?

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: At the time when we value engineered it, yes, the cost estimate was $70,000,000 plus financing if you add that

[David Cruz (Spanish Interpreter)]: So as

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: I just want to make sure I understand It says the project achieves approximately $70,000,000 as a onetime cost savings, which reduces total project costs by an estimated $161,000,000 including debt service costs. Over the life of the project, should I read that as no podium equals a saving of $161,000,000 or should I read it as no podium equals a savings of $231,000,000

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: I'll choose option C, supervisor. It means that it's a savings between 70 and the 160 because there's the upfront cost, and then depending on if housing did move forward at a future date, the housing would be required to pay for whatever the financing has cost up until that point. And so, you know, the the 160 is if it was built at the very end of the project, but it could be somewhere in between there if if the housing was built midway through. Because we're essentially paying for financing of the debt service, you know, year by year, and so whatever years we hadn't paid yet would not be included, but the ones we had would be included. So it's somewhere between that. But I do also want to emphasize that that was a moment in time, and at this point, we do not know how much it would cost to pause the project, go back out to bid for all the contract the general contractor and all the subcontracts. And our reasoned belief, based on all the facts that we have, is that the project would become infeasible because the cost would have increased beyond what we've negotiated over the last several months. And we think we would probably, almost certainly not be able to pursue the project right now. That would also then stop the 100 units of affordable housing from being able to move forward. So I do want to make that very clear.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: Okay. And understood. Thank you. But even at the most basic level, let's just say the podium costs $70,000,000 In order to build housing on top of the yard, it would be the cost to build that housing plus an additional $70,000,000

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Correct.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: So it would basically add like $200,000 in construction cost per unit.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: I would defer to MOCD on exactly That's my arithmetic. But essentially, would become that's like a way of thinking of the value of the land, which is significant right now. That's one way of thinking about it. But I would defer to Robert Baca, who's here from OCD, if you have particular questions about the Yeah. Housing

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: One of the reasons that I like the idea of using government land for affordable housing is that, theoretically, the land cost is zero. But in this case, the land cost is not, in fact, zero because of the podium needs. No. Is that Okay.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Cost of the land on 100 on the Bryant Street parcel, we've negotiated, is about $17,000 a year, just to Okay, give you great. An

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: And then, obviously, 200,000,000 of this whole project comes from the Easter bond. Great. I'm assuming the rest of the money comes from the SFMTA's capital plan. Is

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: that Yes. We have a variety of local, regional, state, and federal sources, and then the that we've identified for the first payment. And then we will identify them going forward. And then the availability payments will be sort of the first slice of our capital If spending in future

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: we were to decide to redeploy that minimum $70,000,000 probably more towards the podium here and take it away from something else. Do we have a sense of what other projects would go by the wayside?

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Well, we not specifically, but we couldn't do that at this point without the project essentially stopping. But we don't I mean, what we to be really clear on what happened, essentially we had an estimate of what the cost would be. We got to the point where we went out to the contractor market. We got cost back from the development, our lead development partner and their contractor, and those were far apart. Was about 30% higher than we'd estimated. So, we had to find a way to meet that in the middle to make it affordable, and the only way to do that was to do the value engineering on the podium, and to remove the O and M, the operations and maintenance that was originally in the plan.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: Got it. And then can I ask one other very basic question? What is the impact of the SMPA's capital plan on SMTA's operating budget? Does the operating budget include debt service costs?

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: The operating budget does include I mean, would defer to my partner, my colleague, Bree Mawerder, who's the chief financial officer. But I believe that we have revenue bonds and that the payments of those revenue bonds come out of our operating budget. But the availability payments for the Petroyard project are intended planned to come out of our capital budget right now. So I mean

[Supervisor Connie Chan (Chair)]: but I'm sorry to interrupt but either way that be it with housing or without housing the maintenance of it is still actually coming out of your capital project but typically when you actually go out for any capital projects your debt, so like fees, actually is being covered by the bond. It's not covered by the department. Not sure we understand the question. That's why we when we issue the bond, that is inclusive of the fee.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Correct. Yes.

[Supervisor Connie Chan (Chair)]: It's That's not being paid by a specific department.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: If I understand your question can you restate

[Supervisor Connie Chan (Chair)]: your I think that's the question.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: So I'm actually answering Supervisor Sherbro. What budget line does the do the debt service costs come out

[Mr. Wright (Public Commenter)]: of?

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: For this project, it will come out of our capital budget. But I want to one of the reasons this project is so important is because it is going to allow us to maintain the vehicles much more efficiently, which has a direct impact on our operating budget. Totally.

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: Yeah. That all makes sense. Thank you. I appreciate it. Thank you.

[Supervisor Connie Chan (Chair)]: Again, I I think that, what I'm seeing here is that there's a redesign of Ground Floor which will reduce the retail space. What I see is the lack of reinforce like the it's the lack of vision for a future opportunity that we're now basically spending to it's we're it it's very similar to what we have done with Transbay term bus yard or bus terminal. And what we actually have done is instead of figuring out and being able to build out for the future, now we're stuck with $2,000,000,000 bus, terminal at at Transbay. And here, what I'm seeing is we're spending 200 something million dollars to have a bus yard, which is critical. But what I'm also seeing is that in in the in the scale, if we were to invest additional $70,000,000 and that we can actually have housing both affordable and potentially a a and actually an economic engine on-site to pay for the maintenance on a in the long term for the actual bus yard. What you have actually forgo right now, in my opinion, is not is basically saying, well, yes, we get this bond dollars because it's immediate. We can get this project done, which is great, and this is the reason why I'm supportive of it. It's necessary. But what I also see that without the reinforced podium is then you are also now for goal as a as a department. The future opportunity for you to generate revenues is what I have seen. That is the reason why SFMTA is the was where you're at in with the budget deficits for so long. And because if you think about it for the long term, the be it the debt service, it's not one year. That debt service is gonna be paid over three decades time. And it's exactly what we did with recently a hotel in downtown. We are saying that it's over twenty, twenty five years of time for $40,000,000 for tax increments. And in the very same way that I'm looking at this is that we do investments in the upfront, then we allow future for building that could be actually a mixed use on top. It doesn't have to be all housing. It could, again, be mixed use that allow whatever it is that allows some kind because you're already doing retail on the ground floor. So I'm just saying that we are squashing a vision, and we're squashing an opportunity for future because now we're shortchanging ourselves because the cost of construction will, in my opinion, will only go up. It will not come down. So why don't we take the opportunity right now for the $70,000,000 investments and that be able to to come to that? I can understand that, you know, for right now, we we look at the bond dollars that we have, and we want to count on that bond bond dollars that we want to have in June and then be able to move forward. All I'm saying is I would like to see a commitment from SFMTA and from the mayor to say while we're committed to this bond dollars we're also not going to forgo to the commitment to seek financial solution and potential resources that allow us to actually be able to invest in a reinforced podium down the road and that we can then allow that opportunity for build housing and build more on-site and and that continue to seek be it regional bond and any other sources to fulfill the obligation of four sixty five units of affordable housing that ours that the city has promised to the community. So I'm I'm seeking a lot. I'm asking a lot, but I think that's my job to ask all of that because this has been eight years in the making for the very least, for just this project. And now we completely just reverse what all these eight years of work that that actually you all have done to get to where we need to be. And so I'm only asking for us to not give up and be able to hold on to that vision and have some commitment and that dedication from the leadership, both director Cushbaum as well as mayor Lurie, to say specifically and dedicating resources and efforts and staffing time that we will identify funding and resources to build for the future.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Thank you chair Chan and certainly understand your disappointment as I mentioned in my presentation we share the disappointment for us it's been a decision about it's been a binary decision about moving forward with a project without the podium, or not moving forward at all. Not we did not we have not seen a path that includes a podium, and I think that's even more true now than it was last summer and early fall when we moved away from the podium, when we made those project changes. But I we look forward to continuing to discuss this with you.

[Supervisor Connie Chan (Chair)]: Thank you. I am, for one I like what your answer is, is that option C. I am looking for option C. Thank you.

[Judson True (Chief of Staff and Director of External Affairs, SFMTA)]: Thank you chair

[Supervisor Connie Chan (Chair)]: Chan. Always cluck appreciate seeing my colleague here. Seeing no more names on the roster we will go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes right now opening public comment for this item number seven if we have any members of the public who wish to address this committee please line up by the by the curtains over to the right and as soon as I have my first speaker I' start your time in two minutes.

[Jesus Mendoza (Field Representative, North Coast Carpenters Union Local 22)]: Good morning chair and members of the budget and finance committee Thank you for giving me the opportunity to speak today. My name is Jesus Mendoza and I'm a field representative at north coast states carpenter's union local twenty two here in the city of San Francisco. Today we stand at a transformative moment for San Francisco Public Transit. The portrait yard modernization project will replace our century old seismically vulnerable bus facility at 2500 Mariposa Street with a modern efficient four story maintenance and storage yard. Designed to support our growing zero emission fleet and deliver more reliable muni service for every neighborhood. We understand this is a vital project for the SFMTA and we are genuinely excited to move into this next phase which is the construction phase. For nearly a year, we have collaborated closely with the plan the plenary team to develop a strong labor commitment that prioritizes good jobs, local hiring, and community benefits. We also look forward to working alongside our longtime industry partner in web core the selected prime contractor as they lead the construction effort bringing their proven expertise in building transportation infrastructure right here in San Francisco this public private partnership with the infrastructure facility project agreement before you today secures design, construction, and innovative financing, including up to 900,000,000 in tax exempt bonds, while capping our long term commitment at an essential 1,396,000,000.000. Approving this resolution clears the path for groundbreaking substantial completion by 2030 and a stronger more sustainable muni for generations. Thank you for your support and I hope we can move forward and work together.

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

[Tricia Gregory (Micro LBE, Bayview–Hunters Point)]: I always say it's hard to go after the carpenters. My name is Tricia Gregory. I am a micro first of all, excuse me. Good morning, supervisors. My name is Tricia Gregory. I am a micro LBE out of Bayview's Hunters Point for the last twenty five years. I'm here to ask for your support for the Botrell Bus Yard. For the last two to three years, Planary with the SFMTA has met with community groups. They have listened to us, understood what is important to the LBE community. They allowed us to give input to establish an LBE SBE plan, which is huge for a developer to sit with us. They listen to us as we encourage them to talk to Webcor who already has a plan and a blueprint in place, have what they have done at the SFPUC biosolids. They hired LBESPE liaisons and asked web corps to do the same to keep us informed and updated with all the contracts that are coming out. We ask at this time for your support. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you, Matt Dorsey Gregory. Next speaker.

[Ricardo Maroon (Owner, Ricardo Maroon Construction)]: Good morning supervisors. My name is Ricardo Maroon with Ricardo Maroon Construction. Local small business here in the city of San Francisco. Simply here to support the project. We are signatory to the carpenters, masons, and laborers. I think this is a project that serves the community, serves the workforce, and serves San Francisco. Thank you.

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

[Tristan Beyond (Owner, Streamline Drywall)]: Good morning board of supervisors thank you for the time and opportunity to speak my name is Tristan beyond owner of streamline drywall we' a small local business enterprise here in San Francisco and also signatory members of north coast states carpenters union we're here to speak to our desire to contribute to this project and to see it actually move forward it has the potential to provide economic opportunities for the local community which are greatly needed some of the high level benefits include improved safe and reliable muni service, public land leverage to build affordable housing, economic inclusion approach that prioritizes small business participation, and culturally relevant public art. We are requesting that carve outs and set asides be orchestrated as the trend in our industry has been for much larger primes and general contractors to self perform multiple scopes of work which creates exclusion for smaller contractors such as streamline and many others. The housing portion of this development which we are also hopeful comes fully back online and not just partially needs to have an s b e l b e requirement with a preference towards local business enterprises to help sustain the local business community. We strongly encourage a yes vote and urge you to support the patrol yard modernization project with over 520,000 daily muni riders the city of San Francisco needs both a new bus yard to improve transit reliability and new housing now. Thank you for your time.

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

[Mary Travis Allen (Co-Chair, American Indian Cultural District Leadership Council)]: Good morning. My name is Mary Travis Allen. First of all, I need to give acknowledgement that to the Ramatars shaloni, who are the original people of this land that they never ceded their homeland which this city and project exists. I' the co chair of the leadership council of the american indian cultural district I also sit on the equity councils for planning an sfmta. I worked for the city for thirty two years and retired as a senior operations manager at sfmta. I joined the petrero yard neighborhood working group in July 2023. I want to quote something that' on the project' website. Early in the project development, it was determined that while the modernization of the bus yard was crucial to keeping San Franciscans moving, there was a great need and opportunity to utilize the airspace above the facility for affordable housing. This goal is in alignment with the City Of San Francisco's housing element programs and initiatives to construct 82,000 new housing units by the year 2031. Where is that? Also there was a commitment from MOHCD to $35,000,000 for this project. I asked for accountability of the money. I asked for accountability of expenditures because the need for housing for the community we were asked to write letters of support we did we came out in support of this effort and we asked for the city to keep its commitment

[Brent Jalipa (Committee Clerk)]: Thank the

[Mary Travis Allen (Co-Chair, American Indian Cultural District Leadership Council)]: you.

[Brent Jalipa (Committee Clerk)]: You Mary travis Allen for addressing this committee. Next speaker.

[Marie Sorensen (Calle 24 Latino Cultural District)]: Hi, my name is Marie Sorensen. I'm with Calle Vente Cuatro. Several years ago, MTA came to the Mission Potrero community saying they wanted our help in bringing more affordable housing to the mission above the Petroyard. Well, the project moved along until the plan recently changed. Now only 100 affordable units can be built. It's typical bait and switch. Get the community in it. Use their their karma, and then screw them. The conundrum is the state mandate requires five sixty five more affordable units. And what can be done to make up for losing so many units while under the state mandate? Build on the Petrorero side or land bank in the mission. There's a lot of questions that need to be answered before this project can move along. And you know what? We don't need more afford we don't need more market rate slash luxury housing in the mission because that's what brings gentrification. And the mission has been fighting gentrification for the last many, many years. Thank you.

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

[Peter Papadopoulos (Mission Economic Development Agency)]: Hello chair Chan and supervisors peter popodopoulos with the mission economic development agency and on behalf of the petrero yard affordable development team including the tabernacle community development corporation as the mighty team we are proud to be developing the Petrero Yard site along with our city and development partners and that will be adding to this transit modernization project by bringing about affordable housing units that it so desperately needs for this neighborhood while we're disappointed that we aren't able to complete this full vision for the site we feel that joint development with the mp ta provides an important model that we do look forward to continuing to refine in future years. Building 100 affordable homes is an important outcome but given the size of need in the neighborhood with many thousands of low income residents continuing to be displaced, we want to see a path for our development team to complete the remaining three sixty five units somewhere in the mission with the help of city agencies. In the meantime it's critical to the stability and capacity of our development team that the city reimburse the team' out of pocket design costs incurred for advancing phase two of the housing project and used to entitle this bus yard. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you much peter pauldopoulos.

[Natalie Ortiz (Community Leader, Mission District)]: Hello, my name is Natalie Ortiz. I am a community leader in the Mission District that represent I represent many different vulnerable communities, so I'm always wearing multiple hats that be it I'm part of the sheriff's oversight board. I am the deputy director of Lovers Lane that also represents artists, also part of Nuestra Causa, Calle Venti Cuatro. And I come today to say that the I'm I'm representing vulnerable communities and currently working at a family shelter called the Oasis Family Shelter. And the need for housing as as someone who's constantly trying to house people, constantly advocating for those that are being not thought about in these processes, I'm coming to represent them. Right? And so I'm asking and urging that we advocate for more housing, that we make it what they said, like grandma Mary said. She said it was in their website. They said they would do affordable housing, and now the the number has been lowered, and it's just not matching up. So we really need that support for more affordable housing. Thank you so much.

[Brent Jalipa (Committee Clerk)]: Thank you much Natalie Ortiz. If we have no further speakers, I would also like to take this time. We do have a roll about standing in the chamber so unless you' in line for public comment I do ask that you take a seat. And with that, madam chair, that completes our queue.

[Supervisor Connie Chan (Chair)]: Seeing no more public comment. Public comment is now closed. Before I call on vice chair Dorsey, I wanna again articulate this. I I think that today, I'm in support of this. I'm not trying to hold this project up. And I do want to move it forward. I'm going to offer this as an option. And I want to have this conversation continue ongoing with SFMTA as well as with the mayor and mayor's office of housing and community development is this, That we could either receive a letter, you know, prior to Tuesday from SFMTA and from the mayor to commit with, you know, identifying additional, like, funding sources and ways and mechanism to have the reinforced podium and to fulfill its obligation of the additional four sixty five units total or whatever minus of the 100 something units that we're getting. And to say that, you know, there that we're willing to explore, you know, mechanism that will create an economic engine on sites that provide maintenance, you know, support for the bus ER and all that. Or or, that I will then work with our state attorney to draft a further resolve clause in the resolution indicating that the board supervisor urges the mayor at SFMTA to fulfill its their obligation, and the vision of this project as intended as previously approved by the board of supervisors. So I think there's two options. Either we receive a letter or that I'm happy to draft, of course, in conversation with SFMTA, draft a further resolve clause that we can make into the resolution next week Tuesday colleagues and that's that's kind of where I'm at like and because I think we are all frustrated the fact that we're not develop delivering more housing as we have intended so that' that' my my offer and and but not that' not to do it for today we don' have the I don' have the language and and I don' want to hold up the project but I hope to have it by Tuesday. Vice Chair Dorsey.

[Supervisor Matt Dorsey (Vice Chair)]: Thank you chair Chan and at this time I would like to move two amendments one offered by the SFMTA and the other recommended by our budget and legislative analyst and I'll read these into the record as follows. On page 10, line six, adding, whereas on 03/09/2026, the planning department issued a memorandum to file which found that development that with development of the housing project, the remaining sites identified in the 2022 housing element update are adequate to meet the requirements of California government code section 65,583.2 and to accommodate the city's share of the regional housing needs pursuant to California government code section 65,584 period. The board incorporates these findings as its own and incorporates the 03/09/2026 memorandum as though fully incorporated herein, semicolon, and then on page 12, at the recommendation of the budget and legislative analyst, on page I'm sorry, line 18, striking an estimated, replacing that with the letter a, not to exceed amount, and then striking the end of that sentence from the the word says, and subject to adjustment on the terms of the project agreement striking that. And that is the motion. And then I'd like to move that we send this to the full board as amended with our positive recommendation.

[Supervisor Connie Chan (Chair)]: Thank you. Deputy City Attorney.

[Brad Rossi (Deputy City Attorney)]: Deputy City Attorney Brad Rossi. The second amendment that Supervisor Dorsey proposed, the BLA's recommendation, should also be reflected in the long title, just for clarity. Thanks.

[Supervisor Connie Chan (Chair)]: Thank you. And so then with that, both amendments as indicated by Vice Chair Dorsey and in addition to what Deputy State Attorney Rusty has added, which is with the long title, and that motion and a roll call and send it to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion by vice chair Dorsey do we accept the amendments as so offered by the department and also accepting the BLA's recommendations and that we refer this resolution to the full board with recommendation as amended. Vice chair Dorsey. Aye. Dorsey aye. Member Cheryl. Aye. Cheryl aye. Chair Chan.

[Supervisor Connie Chan (Chair)]: Aye.

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

[Supervisor Connie Chan (Chair)]: Motion passes. Thank you. Mister clerk please I I understand we have a interpreter that is gonna have to leave at noon, and it looks like that there are actually individuals here to make public comments on item number one. So could we recall item number one?

[Brent Jalipa (Committee Clerk)]: Yes item number one or

[Supervisor Connie Chan (Chair)]: I should say we refer back to item number one.

[Brent Jalipa (Committee Clerk)]: Item number one is the ordinance amending the health and business and tax regulations codes as it relates to mobile food operations.

[Supervisor Connie Chan (Chair)]: Thank you and I just want to make sure that we' not resending the votes but I want to just reopen public comments for item number one.

[Brent Jalipa (Committee Clerk)]: Vice Chair we will need to resend the vote in order to accept public comment yes.

[Supervisor Connie Chan (Chair)]: Understood colleagues my apologies I would like to resent the votes for item number one a roll call please.

[Brent Jalipa (Committee Clerk)]: Or we can take that without objection.

[Supervisor Connie Chan (Chair)]: Take that without objection and would like to open public comments for item number one.

[Brent Jalipa (Committee Clerk)]: Yes we are now reopening public comment for this item number one this ordinance regarding the health and business tax regulation codes as it relates to mobile food operations I do understand we also have david crews from infographics here today if we could provide instructions and language that anyone who wishes to address this committee to line up against those curtains and we' have two minutes. Thank you much. First speaker please.

[Natalie Ortiz (Community Leader, Mission District)]: Thank you so much again for this opportunity to the board here the committee here my name is natalie Ortiz I am here as representing Nostracaosa today food vendors have been part of mission The mission's cultural and economic life for generations operating alongside merchandise vendors and other small street businesses. The San Francisco Food Vendors Committee is a vendor led group of over 60 vendors in the Mission District and a sister organization for the Mission Street Vendor Association. Organized with the support of Nostra Acaoza, vendors in the Food Vendors Committee are ServSafe certified through Mission Language Vocational School, reflecting a shared commitment to food safety, public health, and professionalism. A currently structured the as currently structured the ordinance risk pushing many existing food vendors out of legal operation so I just I want to say thank you again for giving us this opportunity just want to sort of introduce the food vendor committee of San Francisco, and again thank you for hearing them out. You.

[Brent Jalipa (Committee Clerk)]: Thank you much Natalie Ortiz. Next speaker.

[David Cruz (Spanish Interpreter)]: Okay. Thank you very much. Good morning. My name is Rosa. I'm a member of the Food Vendor Committee of San Francisco, and I want to say something very simple. Something about for us, for in order for us to be able to do what we need to do is we need more spaces and there aren't enough and which that means that many of the food vendors won't be able to make sales won't be able to take money and take it take it home. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you Matt Dorsey. Next speaker please.

[David Cruz (Spanish Interpreter)]: Okay. So good morning. My name is Dalis. I'm also part of the committee of of street twenty four. And the just like my colleagues, the reason of we that we're here as a team is because we've been trying to follow the rules that affect us, but also to accept them positively with your support. However, it's been very it's been hard and at the beginning we were told that because this is our second time, our first time we were told that the that the rule was gonna go under revision, and now we are told that it's gonna carry on. We are worried because this is the way that we support that we support our families. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you much for your comments. Next speaker.

[David Cruz (Spanish Interpreter)]: Okay. Hello. Hello. My name is Edgar and as a whole, we see a clear image that the vendors that the vendors do not have accessibility. The cards are high in cost. There aren't enough spaces and we and altogether we see that the system is not accessible and we are worried about that. We're not here to oppose the rules but we're here to make sure that it includes those that it's supposed to support. We are at risk of excluding those that provide for their families. We're ready to work and to create a system but in a way that allows us to continue the rule as it stands it should be stopped thank you

[Brent Jalipa (Committee Clerk)]: thank you much Igor next speaker

[Tita Bell (Legislative Aide to Supervisor Danny Sauter)]: hi

[David Cruz (Spanish Interpreter)]: Okay hello my name is Matt Dorsey I'm also a member of the food vendor committee we need more spaces so we can sell food legally and this cannot move forward until those spaces are added thank you

[Brent Jalipa (Committee Clerk)]: thank Thank you much Gonzaga. Next speaker.

[David Cruz (Spanish Interpreter)]: Included okay hello good morning my name is Andrea I'm also a member of the committee I wanna say that we wanna comply with the law, and we wanna do it properly, but the policy is moving forward without the MIGO program. We must say we must buy our we must buy what we need at the warehouses where the cost can be higher than what we earn. The difference between which it marks that makes the difference between staying in business or being out of business. Other counties have implemented the program because they see the need that they they see the need that we need to operate, and without it, it doesn't match our reality. We're asking to increase what's already there and we're asking for this to not advance until that's included. Thank you.

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

[David Cruz (Spanish Interpreter)]: Good morning my name is missus Romero I'm also part of the food vendors committee these costs are way too high for the working families and this cannot move forward until the problem gets resolved. Thank you.

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

[David Cruz (Spanish Interpreter)]: Hello my name is Maria de luldres these rules these new rules bring a lot of uncertainty every day we wake up with uncertainty I would like to ask you for you to analyze these rules so that we can work properly thank

[Brent Jalipa (Committee Clerk)]: you Thank you much for your de ludros. Next speaker.

[David Cruz (Spanish Interpreter)]: Good morning my name is Gabriela also part of the Food Vendors Committee. We wanna work legally but without MIGO we're obligated to buy cars that are way too expensive for us. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you Gabriela. Next speaker.

[David Cruz (Spanish Interpreter)]: Okay. Hello. My name is Cecilia. I'm also a member of the committee. Many providers are trying to do what's right to understand the rules and prepare for the changes, but without the protections, vendors cannot cannot do that. This generates instability and fear, and it may even kick people out before being able to adapt. A just system gives support during the transition and allows vendors to meet the rules without losing money. Without it, it's an imposition before the opportunity can arise. Stop this until clear protections are provided. Help us because too much money because we're being asked for too much money. And that's it. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you much for your comment Cecilia. Next speaker.

[David Cruz (Spanish Interpreter)]: Hello. Good morning. My name is Maria Jorge. I'm also part of the committee. And we're here to ask you for you to give us the opportunity to make sales from the bottom of our heart. That's what we ask you. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you, Maria Yule. Next speaker.

[David Cruz (Spanish Interpreter)]: Okay. Good morning. My name is Jessenia. I'm also part of the of the of the vendor committee. We're we want to comply with the law, but we're here but in order for us to do this, we're asking you to stop this until the support is given to do so. Thank you.

[Brent Jalipa (Committee Clerk)]: And thank you, Jacenya. Next speaker.

[David Cruz (Spanish Interpreter)]: Good morning. My name is Martha. I'm also part of the Food Vendors Committee. With the Amigo law, it can the Amigo law can help us a lot to cook from home. It will help us a lot cooking from home and to eliminate the high costs of accessing the commercial kitchens. We want we want you we want to ask you to add this before moving forward until the problem is solved thank you.

[Brent Jalipa (Committee Clerk)]: And thank you for your comments Martha next speaker.

[David Cruz (Spanish Interpreter)]: Good morning my name is Felipe reyes I' also part of the food vendors committee the cards cost between 7,000 to $20,000 this cannot move forward without financing thank you very much.

[Brent Jalipa (Committee Clerk)]: And thank you for your comments Philippe. Next speaker.

[David Cruz (Spanish Interpreter)]: Good morning. My name is Carmen. I'm also part of the food vendors committee. Even if we comply with the rules, there aren't enough spaces. This cannot move forward without talking about the spaces. Thank you.

[Brent Jalipa (Committee Clerk)]: Thank you for addressing committee Carmen. Next speaker.

[David Cruz (Spanish Interpreter)]: Good morning my name is Adi. I'm also part of the food vendors committee. Without without the spaces the legalization doesn't work I would like to ask you for this to not move forward until the problem is until the space problem is resolved thank you

[Brent Jalipa (Committee Clerk)]: and thank you Adi next speaker

[David Cruz (Spanish Interpreter)]: good morning my name is Sandra Montoya I'm also part of the food vendors committee we want to comply with the law but we need realistic realistic mechanisms this cannot move forward until these realistic mechanisms are established thank you.

[Brent Jalipa (Committee Clerk)]: Thank you senator Matt Dorsey. Next speaker.

[David Cruz (Spanish Interpreter)]: Good morning. My name is Martha. I'm also part of the food vendors committee. I am in support of food safety however without ruining ourselves trying to comply with the rules. This needs to be solved before it can move forward. Thank you.

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

[Leila Ovando (Director of Food Access & Equity, Nuestra Causa)]: Thank you. Good morning, supervisors. My name is Leila Ovando. I am the director of food access and equity with West Racauza. I was also the chef instructor that that got the food safety certifications for our food vendors, and I'm just here today, you guys have heard from our dozens of vendors, you've heard about the costs, you've heard about the commissary expenses, you've heard about the lack of space, and you've also heard time and time again about MECO. This is not a lack of understanding, it is not confusion, This is alignment, and vendors are clearly telling you what they need to comply. And it the what's most important is that there's not it's not an additional request. They are there are pathways that make compliance possible, but without MECO, without financial support, they cannot purchase these compliant carts, and that's what we're trying to make sure. Without access to space, they cannot operate legally. Without safe harbor, they risk being penalized while trying to transition. I don't know if you guys have seen, but it is kind of violent the videos that are coming out the way the hot dog vendors are being treated on the street. And I do not I'm we are all fearful of that violence translating over to our vendors once this passes out, if this does pass without these reforms. So this is we want to be very clear. We are not here to stop the policy. We are here to ensure that it moves forward. It actually works for the people it is intended to serve. So we're ask it is simple to and and it is direct. We are asking to this point to not move forward until the core pathways that make compliance possible are included. And I ask in this body directly for the record, will you commit to ensuring that MECO financial support, access to space and transition protections are included before this moves forward thank you.

[Brent Jalipa (Committee Clerk)]: Thank you for your comments and if we have no further speakers regarding this item one? Mister Wright, please.

[Mr. Wright (Public Commenter)]: Take that you wanna tax these vendors. You're always taxing people who don't have nothing to do with the multimillion dollar negative cash flow of the city and county of San Francisco. For example, this week, this time frame, I went to go rent a U Haul truck to move my property. And as a result, I did the math and the math from the employee from the U Haul company, numbers were higher than the numbers that I calculated to rent the U Haul van. Come to find out that his numbers were higher because I have to pay taxes on health care for the city and county of San Francisco. I didn't come down to a U Haul company to rent a truck to pay health care for the city and county of San Francisco. You're in a multimillion dollar negative cash flow pertaining to health care because you put people on a health care program that's not eligible pertaining to state law and federal law, Medi Cal and Medicare. Now it's backfired on you. Now you're doing the same thing by putting the tax on the most vulnerable people who trying to keep the head afloat by selling their goods to the public. Furthermore, you sit up there and have a problem with muni railway, $1,500,000 in debt, and then you have the most money making revenue of the day of the year with the Chinese and Japanese New Years, and you could balance out the negative cash flow that Muni has by charging each and every person that uses the Muni railway and Muni metro system that travels to the Chinese parade in New Year's Eve. You further blow that opportunity by letting every passenger ride for free. That's disgusting. Whose idea was that? The figures. You're not even supposed to be on the board. You're an illegal alien.

[Scott Lancelot (Deputy Director of Real Estate, Port of San Francisco)]: You're not

[Mr. Wright (Public Commenter)]: even a

[Brent Jalipa (Committee Clerk)]: citizen. Speaker's time speaker's time has expired. And again, friendly reminder, we are taking public comment on this ordinance regarding the health and business tax regulations codes as it refers to the mobile food facility permit. If we have any further speakers after this gentleman we will be closing public comment after the speaker otherwise please line up along the curtains. And with that please.

[Unidentified Public Commenter]: Hi. Listening, it sounds like the issue is more so welcoming future of independent agencies in San Francisco, and that they might not not might they don't need a committee. They need an agency, some kind of body recognized at a a nine county level and then a incentivization program to get out of San Francisco, probably get out of their heads too in the process. And then San Francisco would tax the agency top down instead of individual food vendors. I could write that and send it to you. Comment?

[Brent Jalipa (Committee Clerk)]: Are are you done with your comments?

[Unidentified Public Commenter]: That is complete. Yes.

[Brent Jalipa (Committee Clerk)]: Okay. And with that, madam chair, we have no more speakers.

[Supervisor Connie Chan (Chair)]: Seeing no more public comment, public comment is now closed. Colleagues, we had already adjudicated this item earlier, and what we have decided that we under while we understand that there's more work to be done, we are moving forward with this part of this legislation and the way that we're finding a best solution to do so without because there's also other parts of this very legislation that we really need to move forward that impact food trucks and other. And therefore, we duplicated the file and moved the duplicated file. We moved the original file as amended to the full board with recommendation. And then that the duplicated file was continued to the chair, which allows supervisor Jackie Fielder and others that may be able to make amendments to it, hopefully before the passage of the file the original file or then supervisor Jackie fielder can always along with the community to work trailing legislation to provide the michael kitchin legislation. And so, with that, I move to, as indicated, duplicate the file, and

[Brent Jalipa (Committee Clerk)]: move Actually, Madam Chair, we only rescinded the vote to refer to the full board. We'll just need to take that.

[Supervisor Connie Chan (Chair)]: Sounds good. Then we move to move the original file as amended to full board with recommendation and a roll call please.

[Brent Jalipa (Committee Clerk)]: On that motion to refer the ordinance to the full board with recommendation vice chair Dorsey aye Members member cheryl. Aye. Chair Chan. Aye. Chan. Have three yes.

[Supervisor Connie Chan (Chair)]: The motion passes. And with that Mr. Clark please call item number eight.

[Brent Jalipa (Committee Clerk)]: Yes item number eight. Item number eight as an ordinance the appropriating approximately 34,300,000.0 from permanent premium and com time salaries and appropriating approximately 34,300,000.0 to overtime salaries in the police department to support the department' projected increases in overtime as required per the administrative code in fiscal year 2025 to 2026. Madam Chair.

[Supervisor Connie Chan (Chair)]: Thank you and today we have the police department here.

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: Okay. Good morning, Chair Chan, Vice Chair Dorsey, and Supervisor Cheryl. I am the Chief Financial Officer, Kimmy Wu, from the San Francisco Police Department. And today, I'm joined with the deputy chief of field operations bureau, Scott Biggs, and from the airport bureau, D. C. Jackson and Captain Caro. Today we are here to respectfully request to de appropriate $34,000,000 in savings to overtime, and request to release all $537,000 for overtime held in reserve. And your approval will only affect the spending within our approved budget. This graph here on our city sworn staffing levels shows over the past eight years since 2018, and the data is shown for December of each respective year. There are over 600 officers short compared to the current recommended total of 2,257. Currently, we have fifteen eighty eight full duties in the city as of March 2026. And our staffing shortage is no longer on the decline since 2019, and we are now seeing an increase in the number of sworn members. The general fund overtime versus staffing is shown here. And the spending from fiscal year 2017 to 2018 to the current year. The line represents the city's full duty sworn, and the SFPD's annual appropriation for overtime budget is listed at the top. The original budget for this year was $72,000,000 and the projected overtime actual is 100,000,000 In the next three slides, I will show the projected overtime budget based on the pay period ending February 27. And for the city general fund, 28,500,000.0 is the appropriated from our salary savings in general fund. Added to the original budget of the 72,000,000, the total revised appropriation is 100,000,000. And for the airport bureau, they are projecting overtime at 15,000,000 with an original budget of 10,000,000. And the projected deficit is $5,000,000 shown here. So the total revised general fund appropriation is $100,000,000 for the city and $15,800,000 for the airport bureau. For the city, the revised appropriation and overtime of $100,000,000 is based on, again, the pay period ending February 27. And not shown here is the additional $537,000 that is held in reserve. And we would like to request for the approval to release the full amount, bringing the revised total to 100,500,000.0. And for the airport, the de appropriation is 5,800,000.0 from salary savings, and therefore it includes the contingency amount of 773,000. And this concludes my presentation, and we can answer any questions you may have.

[Nick Menard (Budget and Legislative Analyst)]: Item eight is an appropriation ordinance that de appropriates $34,400,000 from salary accounts in the police department, both general fund and in the airport fund, and then increases appropriation authority and overtime accounts in both those funds. We summarized the changes on page 29 of our report. You can see that $28,500,000 is shifting in the general fund, and $5,800,000 is shifting in the airport fund. And then you can see on page 30 the overtime hours that this translates to. You can see also that the police are projecting to deliver in the city about 717,000 overtime hours this year. That's an ongoing decrease from prior years. Two years ago, they were doing over 800,000 of overtime per year. And then on page 31 of the report, you can also see that this is essentially a budget neutral appropriation. It's just shifting spending authority within the police budget. It does not require drawing on the budget reserves to fund these new overtime costs. And just kind of zooming out a little bit, the police headcount for sworn officers in the city has increased by about 60 people relative to the headcount this time last year. Looking at the separation data and hiring data during this fiscal year, however, they basically are kind of awash. So this high level of overtime, I think, will be sustained in future years. So they've been able to bring it down. A lot of the decrease this year is actually starting as of a couple weeks ago. The police have ordered a 20% decrease in overtime for the remainder of the fiscal year to avoid having to draw on the budget reserves. And I'm expecting that they'll be doing that going forward. But we do recommend approval of item eight. So the decrease in overtime this year, they were on track to spend about seven hundred and sixty thousand hours of overtime this year. That would have required that spend rate would have required drawing on the city's budget reserve. Their budget could not accommodate that level of overtime. So they've ordered a decrease in overtime by about 20% for the remainder of the fiscal year to remain within their budget.

[Supervisor Connie Chan (Chair)]: Well, I mean, I think that by comparison, clearly, it's indicated in the budget legislative analyst is that, you know, in the previous three fiscal years ago was that, you know, the department overspends by 25,000,000 and which had to come to or 27 something million dollars and have to come to the board supervisor for a mid year supplemental that dip into the city's general reserve. And since then, I think that not only that we have work to make sure with the controller's office to have a quarterly monitor, which you have been meeting the obligation to really to also during especially during last year's budget, you have budgeted obligation. And thank you for that work. I do believe, though and correct me if I'm wrong. I think last year, for your budget, though, it was either 30,000,000 or $31,000,000 budgeted for over time. And that I think but you're able, even within that frame right now, for you to come to us is still neutral because you were able to identify not just beyond what you have budgeted. You actually are able to find savings somewhere else to augment the overtime spending. Is that correct?

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: Yes, that is correct. So last year, our overtime appropriation was approximately 41,000,000. And so we did move vacancy savings from our salaries to overtime, and that was only within the city.

[Supervisor Connie Chan (Chair)]: Yeah. So thank you. Good job. Like, because I think that ultimately, what we really wanted to see is that you work within the budget. Think that how you actually find saving to be able to augment and fund, that's, of course, up to you as a department. And what we are looking for and along with the controller is that you work within your budget. I have additional question that you, along with other city departments you were not alone in this. A few weeks ago came to the board, I believe it was in actually, March. That was for another reserve for $4,000,000 But maybe you were not part of it. Help me understand. Or was it just the Department of Emergency Management and HRC that is specifically for street cleaning and Super Bowls, that SFPD was not part of the 4,000,000

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: So you are correct. In March, they had requested a supplemental under DEM, mayor's office, for $4,000,000 A portion of that has should potentially come to the police department for the street conditions as well as non personnel costs related to, you know, leading up to the Super Bowl and for Lunar New Year.

[Supervisor Connie Chan (Chair)]: Any chance you could remind me or that you know on top of your head, because I'm trying to look at the documents and I can't quite see it, is how much it is that actually is out of that 4,000,000 went to SFPD?

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: At this moment, I don't have a final confirmed amount yet, but a good portion would potentially come to the police department, yes.

[Supervisor Connie Chan (Chair)]: That went to the police department of that 4,000,000?

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: Yes, correct. But the final amount has not been confirmed yet.

[Supervisor Connie Chan (Chair)]: No problem. I think ultimately that's my question for SFPD. You know, I think you're by scale, you are much better off than where you were three fiscal years ago. So thank you so much for that work. I think that you are still not quite there yet in a sense where clearly, you know, there's a supplemental for the $4,000,000 a good portion still goes to SFPD. But from what I understand, the mayor wants to maintain that level of service. And now that the $34,000,000 again while within your department spending we also know now that there's a new contract for officers that's coming through. So help me better understand that what is your strategy in the upcoming budget conversation that you're going to maintain the overtime and maintain staffing and maintain but also meet the new mandates that you will now encounter by your contract?

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: So I would say that we are in our third fiscal year of reducing our overtime, which is primarily an overtime backfill minimum staffing. We have a new dashboard that is monitored daily and updated showing where we are within the allotted overtime that is planned. And so that gives us, you know, accurate monitoring and to make sure we adjust where needed to stay within budget. As well as our academy recruits, We have a larger graduation rate, and our applications have increased to the highest level. Last year, we had over 5,000 applications. And so it will take time for them to go through the process to then, you know, increase further in this upcoming year with the staffing situation.

[Supervisor Connie Chan (Chair)]: What I also am curious about and that, you know, I had this conversation with the city administrator, but I look forward to having this with you as well is and think that part of and I look forward to seeing how you want to manage that in this upcoming fiscal year is also really the capital managements, assets management's for SFPD and that's ranging various from you know your real time in crime investigation center like both in lease and long term maintenance your investigation unit your police station upgrades, as well as your fleet upgrades? What is your plan for all these things? And because meanwhile, you're also taking on new tasks. Your new tasks are equipments like the drones or equipments like automated license plate reader. And it seems to me though like at some point you will face a question about asset management all across, be it from your equipment all the way to your assets like properties. And so do you now have a team to actually manage this variety of it? Because, again, you're understaffed.

[Kimmy Wu (Chief Financial Officer, San Francisco Police Department)]: Yes. So in the coming months, you know, we are reviewing that closely. But as for the Arctic, we do have a lease that is through the end of the year. Our services have also, for the non personnel, is funded already through philanthropic funds. For vehicles, we have received an air mark for, you know, motorcycles potentially, but for our fleet over a million dollars. So we have other sources that we are relying on to help with that, as well as the, ESR bond for, upcoming Teravelle Station, which is, coming up. So these are all things that are in discussion and we are monitoring.

[Supervisor Connie Chan (Chair)]: Yeah. I think what I'm gonna look for similarly to what I'm gonna look for all city departments, and that's inclusive of the fire department as well. And and I'm I'm going to ask everyone is to start to demonstrate in their budget not just for what is in the budget that is proposed but it's actually a projection of a succession plan and like assets management plan that you will have both when I say you know succession plan I guess it's really inclusive of recruitment inclusive personnel and then as well as your assets management for the long term like things that I know that they don't happen overnight very same thing similar to fire department that the apparatus clearly are very old, and they need to replace them. And I like to see a plan that how do you replace them and update them without knowing that you're we are in a significant deficit. What I also am looking for in this upcoming budget is to see that there is an approach and a vision articulated in by chief or whoever he designated to articulate and present is this idea about staffing adjustments, because another staffing report I think it should be already in progress, and balance it out with technology that could be made available to us, And what would that look like in terms of staffing level versus equipments that you will have, like drums, surveillance cameras, in real time, and however? And what would that impact the strategy in terms of investigation and patrol? So those are the questions that I will I don't expect you to answer today, but I just want to make sure that you understand what we're looking for in the coming budget conversation so you're ready for it. Again, I appreciate the fact that this is, again, within your spending. But I don't think we're there yet completely about your overtime spending. So I look forward to another like continue on furthering strategy, knowing that you have more that are now layering in but it' very impressive I really appreciate your work. Thank you. Let' go to public comment on this item.

[Brent Jalipa (Committee Clerk)]: Yes right now opening public comment on this item number eight if we have any members of the public who wish to address this committee. I

[Mr. Wright (Public Commenter)]: wanna be cautious of you taking money away from prospects that graduate from the academy and shift it over to overtime. If it ain't broke, don't fix it. Because what'll happen when all those cadets graduate and pass the test to become officers in the city and county of San Francisco, you won't have funds there. Then you're gonna have to shift funds back, and that's gonna create a problem in hiring the new recruits. You focus on managing money to the penny on some areas, then you turn around and flip flop and waste multi millions of dollars in other areas, and then you laugh like it's nothing. That's called being a hypocrite. It's disgusting. It's the same way with the treatment in your budget pertaining to the most economically disadvantaged people that are homeless out in the street with a combination of both mental and physical disabilities and a drug addiction problem. Newsom given the mayor $7,000,000 that's coming from the Trump administration and claimed that they're using that for beds to rehab people who have addiction, but nothing about the $250,000,000 that's missing, that's supposed to be for the homeless people that Gavin goddamn Newsom can't even locate. Where's that money at? Why don't you focus in on getting money that's already been granted that should be used and wouldn't create these type of problems in the first place? It's disgusting. I shouldn't have to drop what I'm doing to come up here to pinpoint a negative cash flow of multimillions of dollars, and then you mess it with people who don't have nothing to do with the problem. It's very bad, and it's disgusting.

[Brent Jalipa (Committee Clerk)]: Thank you much for your comments. Seeing no further speakers. Madam chair, that completes our queue.

[Supervisor Connie Chan (Chair)]: Seeing no more public comments, public comment is now closed. I don' see any other questions so colleagues I will move this forward to full board with recommendation. Roll call please.

[Brent Jalipa (Committee Clerk)]: And on that motion that we refer this ordinance to the full board with recommendation vice chair dorsey aye member cheryl aye chair Chan aye we have three ayes

[Supervisor Connie Chan (Chair)]: the motion passes Mr. Clerk do we have any other items before us today?

[Brent Jalipa (Committee Clerk)]: Madam chair to conclude

[Nick Menard (Budget and Legislative Analyst)]: our business. One second excuse me the release of reserve is not in this ordinance?

[Brent Jalipa (Committee Clerk)]: Actually, madam chair, before before the budget legislative analyst

[Supervisor Connie Chan (Chair)]: The motion that must be

[Brent Jalipa (Committee Clerk)]: I yeah. We must rescind that motion.

[Supervisor Connie Chan (Chair)]: Let's rescind the motion with no objection. And I would like to make the motion one: to release. Is that what we're

[Nick Menard (Budget and Legislative Analyst)]: not sure. We need to amend the ordinance to add language or hold a hearing next week or at another time to release the reserve because it's not in the legislation now and I don't think it can just be done verbally.

[Supervisor Connie Chan (Chair)]: I'm sorry what are we exactly talking about? Like, about the

[Nick Menard (Budget and Legislative Analyst)]: So there's two things happening or there's two things the police department wants. They want to change the spending authority within their budget to accommodate additional overtime spending. There's also a committee reserve that was placed on a portion of their overtime of about half $1,000,000 during the budget process last year. That is a separate action that the committee needs to take. I see. But it's not

[Supervisor Connie Chan (Chair)]: Not in here.

[Nick Menard (Budget and Legislative Analyst)]: It's not in the ordinance right now. I feel like the options are and I invite the control and city attorney to correct me if I' wrong, but to amend this ordinance to add a statement saying the committee releases the reserves or we' have a separate hearing on this matter at a future meeting?

[Supervisor Connie Chan (Chair)]: Let' see I think we should amend this so that we can move this forward. I'm looking at deputy city attorney, Brett Rossi, of give us a little bit of guidance about potentially if we can amend this right now, or that we move this forward and amend it well, we can't quite move this forward, actually, without amending it. But go ahead.

[Brad Rossi (Deputy City Attorney)]: Deputy City Attorney Brad Rossi. So the first we heard of this request was today. So it wasn't submitted by the department before the hearing. And normally, I think what would happen, according to the clerk, is the department will send a letter asking for a reserve to be released. The committee would hold a hearing on that request. I do think we probably could amend this ordinance to add another section that releases those funds, but those would be substantive amendments which require another hearing because it was not noticed as part of this agenda for today. So I think we don't have the language either ready for you to adopt. So the option would be we could take a recess to try to come up with a language that you could adopt today and continue this item until next week or the department could submit a letter and requesting the reserve and you could hold the normal hearing on that five hundred on the reserve that they're requesting to release

[Supervisor Connie Chan (Chair)]: yeah Matt, thank you. And then if that's the case, what I would do is probably continue this to next week so that we can make sorry, go ahead.

[Brad Rossi (Deputy City Attorney)]: To avoid a third hearing, I think we need to come up with the language for you to adopt today through amendments that releases the funds, and then continue the amended version to next week. So at that point, you can forward it, the amended version, to the board.

[Supervisor Connie Chan (Chair)]: Understood. How long would it take for us, if we were to go on recess, how long would it take for you to come out with the language? Like ten minutes?

[Brad Rossi (Deputy City Attorney)]: I think that's probably sufficient, yes. Awesome.

[Supervisor Connie Chan (Chair)]: Thank you. So, colleagues, if it's okay, let's return at 12:35. And so we'll be on recess until 12:35. SFGov TV, San Francisco government television. Thank you. And we're returning from recess for item number eight. And thank you so much for everybody's patience. And I really appreciate Sounds like what through counsel and through everyone that what we have decided and in agreement with the San Francisco Police Department is that we will move this item forward as it currently is and then that the department will then return at a separate time to submit a letter to request to release the remaining reserve and for a separate hearing at a later time so that we can move forward with the spending and I should say the appropriation of this funding. With that I would like to make the motion to move this item to full board with recommendation and a roll call please.

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

[Supervisor 'Cheryl' (Unidentified last name; third committee member)]: Aye.

[Brent Jalipa (Committee Clerk)]: Dorsey aye member cherrill aye chair Chan

[Supervisor Connie Chan (Chair)]: aye.

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

[Supervisor Connie Chan (Chair)]: The motion passes and I just wanted to clarify so the department will then come back at a later time for to reserve the to release the remaining reserve and my suggestion is probably prior to May Prior to May when we start because then starting in May we will be starting all the enterprise agency hearing so that'92s my suggestions if you can get that ready. And with that Mr. Clerk do we have any other business before us today?

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

[Supervisor Connie Chan (Chair)]: Thank you. The meeting is adjourned.