San Francisco Budget and Appropriations Committee Meeting - April 13, 2022
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San Francisco Budget and Appropriations Committee Meeting - April 13, 2022
The Budget and Appropriations Committee met on the afternoon of April 13, 2022, chaired by Supervisor Hilary Ronen, with Supervisors Gordon Mar, Connie Chan, President Shamann Walton, and Vice Chair Ahsha Safai participating. The committee received an update on the city's five-year financial plan, took public comment, unanimously filed that hearing, and continued a hearing on citywide street teams to April 20, 2022 because the Budget and Legislative Analyst report was not ready.
Public Comments & Testimony
- David Pilpel offered public comment on the five-year financial plan. He praised the revenue forecasting work, supported competitive but reasonable salaries and benefits and reducing the city's pension liability, and backed facilities maintenance, ICT, and capital plans. He urged realistic position counts instead of inflated positions offset by attrition savings, recommended not spending all surplus funds, replenishing all reserves, avoiding one-time funds for new programs, and limiting - not zeroing - nonprofit funding.
- No public comment was received on the motion to continue the street teams hearing.
Discussion Items
- Five-Year Financial Plan Update: Mayor's Budget Director Ashley Groffenberger and Controller's Office Citywide Revenue Manager Carol Liu presented the March update. Key points included:
- The January forecast projected a $108 million surplus over the next two budget years; the March update reduced that to approximately $75 million, with modest out-year shortfalls. The structural deficit in the final forecast year is about $150 million.
- Revenue projections were mixed: property tax improved after incorporating actual assessment appeals; excess ERAF improved but was partially offset by state education funding changes in the governor's budget; business tax weakened because the telecommuting assumption rose from 15% to 33% beginning in FY 2022-23; hotel tax weakened, with recovery to pre-pandemic levels expected in calendar year 2026; and transfer tax weakened as large commercial real estate transfers averaged about 100 per year since COVID-19, down from about 150 pre-pandemic.
- FEMA reimbursement revenue increased by $45.9 million because eligible costs were extended through June 30, 2020, but the timing of reimbursements is delayed.
- Expenditure changes included replenishing the general reserve after supplemental appropriations, pension contribution rates about 1% higher than previously expected, higher workers' compensation costs, increased general fund support for Moscone Convention Center, and changes to HSA aid programs.
- Risks include active labor negotiations: each 1% wage increase above CPI adds about $25 million in general fund costs. The forecast assumes no FEMA revenue for costs after this fiscal year.
- In response to member questions, staff cited current-year excess ERAF of about $245 million, a projected general reserve balance of about $44 million, with a planned FY 2022-23 deposit of $48 million. Regarding recession strategy, staff said the city's main protections are the budget stabilization and rainy day reserves, and the city kept its structural deficit relatively low by avoiding new ongoing costs during COVID-19.
- Supervisor Ahsha Safai asked for a fuller committee discussion of reserve requirements, noting that reserves can total nearly $1 billion while budget debates cover relatively small amounts. Chair Ronen supported the idea and offered to co-sponsor a hearing.
- Citywide Street Teams Hearing: The committee considered a hearing on citywide street teams and their effectiveness on street conditions, homelessness, and behavioral health crises. Chair Ronen moved to continue the item to the April 20, 2022 meeting because the Budget and Legislative Analyst's report was not ready for department review.
Key Outcomes
- The committee voted 5-0 to file the five-year financial plan hearing.
- The committee voted 5-0 to continue the citywide street teams hearing to the April 20, 2022 Budget and Appropriations Committee meeting.
- The meeting adjourned after completing its agenda.
Meeting Transcript
Good afternoon. Good afternoon. The meeting will come to order. This is the April 13th, 2022 Budget and Appropriations Committee meeting. I'm Hilary Ronin, Chair of the Budget and Appropriations Committee. I'm joined by committee members, Supervisors Gordon Marr, Connie Chan. Welcome to her first budget and appropriations meeting. President Shimon Walton, and we will be joined by uh Vice Chair Supervisor Asha Safai shortly. Our clerk is Mr. Brent Halipa, and I would like to thank Matthew Ignau from SFGov TV for broadcasting this meeting. Mr. Clerk, do you have any announcements? Yes, Madam Chair. The minutes will reflect that committee members participated in this. Oh, so sorry, that is not correct. Um yes, with our return to the chamber, just a friendly reminder for those in attendance uh to please make sure to silence all cell phones and electronic devices. The board of supervisors and its committees are now convening hybrid meetings that allow in-person attendance and public comment while still providing remote access and public comment via telephone. The board recognizes that equitable public access is essential, and we'll be taking public comment as follows. First public comment will be taken on each item on this agenda. Those attending in person will be allowed to speak first. And then we'll take those who are waiting on the telephone line. For those watching either channels 2678 or 99, NSFGovTV.org. The public call in number is streaming across the screen. That uh number is 415 65501. Again, that's 415 65501 with the meeting ID 2498 755. 5308, and then press pound and then pound again. When connected, you will hear meeting discussions, but you'll be muted and in listening mode only. When your item of interest comes up, uh yes, uh, and public comment is called. Those joining us in person should line up to speak. Um, and those on the telephone should dial star three to be added to the speaker line. If you're on the telephone, please remember to turn down your TV and all listening devices you may be using. As previously mentioned, we will take public comment from those attending in person first, and then we'll go to our public comment telephone line. Alternatively, you may uh submit public comment uh in either writing in either of the following ways. Email them to myself, the budget and appropriations committee clerk at B R E N T dot J A L I P AT SFGO V dot or G. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. Uh, you may also send your written comments via U.S. Postal Service to our office at City Hall. That's one, Dr. Carlton B. Goodlett Place, room 244, San Francisco, California, 94102. And uh that concludes my uh announcements, madam chair. Thank you so much. And uh before I ask the clerk to call item number one, colleagues in the public. I just want you to know that I'm going to be making a motion requesting to continue item number two. Um as the report uh is not ready uh for prime time yet. So I will be continuing that that till next week. But first, let's hear item number one. Can you please call it Mr. Clerk? Uh yes, madam chair.
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