San Francisco Budget and Appropriations Committee Meeting - June 21, 2021

The Budget and Appropriations Committee, chaired by Supervisor Matt Haney and joined by President Walton and Supervisors Ronen, Safai, and Mar, met on June 21, 2021 to consider multiple appropriation and budget items for fiscal years 2021-2022 and 2022-2023. The committee approved several items with positive recommendations to the full board, including San Francisco Public Utilities Commission (SFPUC) capital budget amendments, enterprise bond authorizations, supplemental appropriations for fixed-budget departments, and other financial ordinances. The bulk of the meeting focused on reviewing departmental budgets as part of the annual budget and salary ordinances (Files 210643 and 210644), with the Budget and Legislative Analyst (BLA) presenting recommended reductions. Most departments agreed to the BLA's technical recommendations, but policy disagreements arose regarding funding for Moscone Convention Center rental incentives, additional 311 customer service positions, and two new small business permitting specialist positions at the Office of Economic and Workforce Development (OEWD). Public comment was heard on several items.

Consent Calendar

(The committee did not have a separate consent calendar; however, items 1–4, 7–8, 9–10, 11, 12, and 13 were approved unanimously with little or no discussion after staff presentations and BLA reports. These included routine approvals such as SFPUC bond amendments, fixed-budget department adjustments, Proposition J contract certifications, the access line tax CPI adjustment, the neighborhood beautification graffiti cleanup fund ceiling, and a certificate of participation authorization for capital projects.)

Public Comments & Testimony

• On Items 1-4 (SFPUC capital budget): Janice Boken, speaking on behalf of the Coalition for San Francisco Neighborhoods and personally, urged the committee to continue the items and hold a hearing on the PUC's $6 billion debt portfolio before the board's summer recess, citing concerns about being blindsided as with the former PUC general manager.
• On Items 7-8 (Fixed-budget departments): Anita Ekinem, Chair of the SFPUC Citizens Advisory Committee, spoke in support of the budget and FTE allocations for the SFPUC, highlighting the need for positions dedicated to racial equity work.
• On Items 9-10 (Prop J contract certification for DPH): Dave Canego, an employee at Curry Senior Center, advocated for the peer-based client safety services model, noting that their experience with St. Anthony's client safety services had reduced incidents, and he supported the proposal to replace sheriff deputies with community-based safety staff.
• On Items 5-6 (Main budget ordinances): No public comment was taken at this meeting; it was scheduled for Friday, June 25, 2021 at 10 a.m.

Discussion Items

Items 1-4: SFPUC Capital Budget and Bond Authorizations

• Charles Pearl, SFPUC Deputy CFO, presented four items: (1) appropriation of $19,344,824 for Hetch Hetchy power capital improvements and re-appropriations of $2,000,000 from Low Carbon Fuel Standard and $6,843,536 from Hetchy Revenue; (2) appropriation of $213,511,178 for wastewater capital improvements and re-appropriation of $42,900,587; (3) amendment to increase power revenue bond authorization from $143 million to $162,314,897; (4) amendment to increase wastewater revenue bond authorization to $563,430,430.
• Key changes: $213.5 million increase in wastewater enterprise mainly due to revised schedule for the Biosolids project at the Southeast Wastewater Treatment Plant; $6 million increase for green infrastructure grants; $17.3 million increase in Hetch Hetchy enterprise mainly for Bay Corridor transmission project; offsetting reductions of approximately $40 million in wastewater and $7 million in power from other projects.
• BLA (Nick Minard) recommended approval of items 1 and 3 as is, and items 2 and 4 with an amendment on item 4 to require that if refunding bonds are issued, a savings report and official statement be submitted to the Board of Supervisors.
• After discussion, the committee voted 5-0 to amend item 4 with the BLA language and then 5-0 to send items 1-4 to the full board on July 13 with a positive recommendation.

Items 5-6: Annual Budget and Salary Ordinances – Departmental Reviews

• The committee heard from approximately 18 departments that had agreed to BLA-recommended reductions. The BLA (Dan Gonsher) presented summaries. All departments listed below were in full agreement except where noted:
  • Department of Building Inspection: $1,030,064 in FY21-22 ($578,064 ongoing, $425,000 one-time); $425,000 ongoing in FY22-23.
  • City Planning: $441,881 in FY21-22 ($291,881 ongoing, $150,000 one-time); $300,000 ongoing in FY22-23.
  • General City Responsibility: $400,000 one-time in FY21-22 only (correction made from draft).
  • City Attorney: $467,530 one-time in FY21-22.
  • Office of the City Administrator: Non-policy reductions of $1,003,253 in FY21-22 ($249,575 ongoing, $781,678 one-time) plus $110,000 encumbrance closeout; $355,295 ongoing in FY22-23. Policy disagreements remain on Moscone incentives and 311 positions (see below).
  • Department of Technology: $652,457 one-time in FY21-22 plus $27,466 encumbrance closeout and $488,107 current year savings; no FY22-23 reductions.
  • Department of Public Works: $751,011 in FY21-22 ($606,011 ongoing, $145,000 one-time); $621,528 ongoing in FY22-23. One position cut agreed.
  • Mayor's Office: $231,673 ongoing in FY21-22; $231,648 ongoing in FY22-23.
  • Ethics Commission: No reductions.
  • Department of Elections: $85,000 in FY21-22 ($10,000 ongoing, $75,000 one-time) plus $945,998 encumbrance closeout; $10,000 ongoing in FY22-23.
  • Department of Environment: $82,725 in FY21-22 ($20,000 ongoing, $62,725 one-time) plus $34,264 encumbrance closeout; $20,000 ongoing in FY22-23.
  • Human Rights Commission: $275,000 in FY21-22 ($25,000 ongoing, $250,000 one-time) plus $31,265 encumbrance closeout; $25,000 ongoing in FY22-23.
  • Board of Supervisors: $11,907 one-time in FY21-22 plus $1,300 encumbrance closeout; no FY22-23 reductions.
  • Assessor-Recorder: $197,500 in FY21-22 ($167,500 ongoing, $30,000 one-time); $167,500 ongoing in FY22-23 (revised from $250,000 after negotiation).
  • Treasurer & Tax Collector: $286,467 in FY21-22 ($152,879 ongoing, $133,589 one-time); $156,177 ongoing in FY22-23 (revised to include $20,000 new reduction and adjusted attrition).
  • Controller: $475,708 one-time in FY21-22 plus $6,225 encumbrance closeout; $119,451 one-time in FY22-23.
• Policy disagreements (deferred for later decision):
  1. Moscone Convention Center rental incentives (City Administrator): The BLA recommended deleting $2.6 million in FY21-22 and $2.0 million in FY22-23 for rental incentives to attract conventions. The City Administrator argued that incentives are critical for competitiveness (other cities offer 100% rent forgiveness) and that the funding is a two-year stopgap because hotel assessment revenue has collapsed. Estimated benefits: $173 million in direct convention spending and 140,000–150,000 room nights. Supervisor Safai suggested possibly funding year one and evaluating year two.
  2. 311 Customer Service positions (City Administrator): Original request was 10 new positions to divert non-emergency calls from 911. BLA recommended deleting 2 (agreed) and placing remaining 8 on reserve pending an implementation plan. The department requested 3 positions be released immediately for training (6–9 months). Implementation timeline depends on a new project manager in the Mayor's Office (to be hired by October 2021) and coordination across departments.
  3. OEWD Small Business Permitting Specialists: BLA recommended denying 2 new positions ($261,415 ongoing) due to insufficient justification and potential overlap with existing permit center staff (9 FTEs) and contractor services. Director Kate Sofis argued the positions are essential for providing concierge-level, end-to-end support to small businesses, especially during recovery, and would be distinct from generalists. The committee deferred a decision.
• The committee expressed intent to accept all departmental budgets with BLA recommendations as presented, with policy decisions pending further discussion before the final budget vote.

Items 7-8: Fixed-Budget Departments – Airport, Port, SFPUC Supplemental Appropriations

• Risa Sandler (Controller's Office) explained that the supplemental appropriations are required because changes exceeded the 5% threshold for fixed-budget departments.
• Item 7: Appropriation of $20,716,252 to SFPUC, and reductions of $272,379,116 at Airport and $17,664,260 at Port.
• Item 8: Salary ordinance amendments for position substitutions/additions: 3 at Airport, 9 substitutions and 24 new positions at SFPUC. BLA recommended a minor amendment (delete 0.77 FTE of an 1823 position and change 0.77 FTE of 0933 to 0932), which the PUC accepted.
• The committee voted 5-0 to amend item 8 per BLA, then 5-0 to send items 7-8 to the full board on July 13.

Items 9-10: Proposition J Contract Certifications

• Item 9: Certification for contracted security services at DPH primary care and behavioral health clinics, replacing sheriff deputies with a community-based organization providing client safety services (de-escalation, navigation, peer support). Dr. Hallie Hammer described the model as already successful at two sites (Medical Respite & Sobering Center, Curry Senior Center).
• Item 10: Certification for previously approved contracted services.
• No BLA report. After public comment in support, the committee voted 5-0 to send to full board on July 13.

Item 11: Access Line Tax CPI Adjustment

• Controller's office reported a 2.00% inflation index (measured December to December), resulting in an increase to the access line tax, which is assumed in the proposed budget. Approved 5-0.

Item 12: Neighborhood Beautification and Graffiti Cleanup Fund Tax Designation Ceiling

• The controller calculated the maximum percentage taxpayers can designate to this fund (Community Challenge Grant Program) to maintain a $1 million balance adjusted for inflation. Supervisor Ronen praised the program. Approved 5-0.

Item 13: Certificates of Participation (COP) – Not to Exceed $67.5 Million

• Kate Faust (Office of Resilience & Capital Planning) presented projects: San Francisco Wholesale Produce Market improvements, Better Market Street (5th–8th streets), new child care center at Zuckerberg SF General (recovery stimulus); and critical repairs for capital renewal projects. Luke Brewer (Controller's Office) described the structure as lease-backed COPs with an estimated annual lease payment of $5 million at 4.75% interest over 20 years. BLA noted a $2 million contingency for future grant matching, a new purpose but consistent with debt policies. Approved 5-0.

Key Outcomes

• Items 1-4 (SFPUC): Approved as amended (amendment on wastewater refunding bond reporting) and forwarded to full board on July 13, 2021 with a positive recommendation.
• Items 5-6 (Department Budgets): The committee accepted BLA technical recommendations for all departments. Policy decisions on Moscone incentives, 311 positions, and OEWD small business specialists were deferred for further discussion before the committee's next hearing on June 23 or before the final budget vote on June 25.
• Items 7-8 (Fixed-budget supplements): Approved as amended and forwarded to full board on July 13.
• Items 9-10 (Prop J): Approved and forwarded to full board on July 13.
• Item 11 (Access line tax): Approved and forwarded to full board on July 13.
• Item 12 (Graffiti fund ceiling): Approved and forwarded to full board on July 13.
• Item 13 (COPs): Approved and forwarded to full board on July 13.
• The meeting recessed to Wednesday, June 23, 2021 at 10 a.m.