San Francisco Budget Committee on Small Business Relief, Equity, and Reserves - May 11, 2022
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San Francisco Budget and Appropriations Committee Meeting Summary – May 11, 2022
The Budget and Appropriations Committee convened on May 11, 2022, at 10:00 AM to hear three items: an update on direct small business relief programs and the Office of Economic and Workforce Development's (OEWD) equity plan for recovery; a hearing on racial equity in city employment (continued without discussion); and a presentation on the city's budget reserves. The meeting was chaired by Supervisor Hilary Ronin and included committee members President Shamann Walton, Supervisors Gordon Marr (later excused), Connie Chan, and Vice Chair Asha Safai. Supervisor Aaron Peskin also participated.
Public Comments & Testimony
- William Ortiz-Cartagena (founder of Pledge, Latino Task Force Small Business subcommittee chair) expressed strong support for OEWD's partnership in the Mission district, stating the department was instrumental in saving businesses during the pandemic.
- Jenny Long (executive director of Chinese Culture Center) advocated for including the Chinatown Be Successful festival in OEWD's equity plan and budget, noting that Chinatown small businesses continue to struggle and need equitable support.
- Claire Lau (Chinese Progressive Association) urged OEWD to triple investments in economic recovery and equity programs, particularly for unhoused residents, undocumented individuals, and SRO residents, and called for earn-and-learn pilot programs.
- Ivan Coron (manager, Latino Task Force) echoed support for OEWD's partnership and expressed hope for increased funding to reach more communities.
No public comment was offered on the budget reserves hearing.
Discussion Items
1. Direct Small Business Relief Update and OEWD Equity Plan (Item 210350) Supervisor Peskin introduced the hearing, noting it was a follow-up to a February 2021 community letter to the mayor recommending prioritization of equity in OEWD's work. Director Kate Sofis, participating remotely due to quarantine, presented OEWD's equity vision and reported that since the pandemic, the department has dramatically increased direct grants and loans. Key statistics from the presentation:
- OEWD's total budget has grown to $153 million, with nearly $48 million (roughly one-third) explicitly for small business through the Invest in Neighborhoods and Office of Small Business divisions.
- Over 3,000 awards of grants and leveraged loans were distributed, including $12.1 million in grants in FY 2021-22 and $20 million in 0% interest loans (leveraged from a state loan program).
- 75% of grant and loan recipients were from BIPOC communities.
- The department has 102 community partners and currently faces a 21% vacancy rate (about 20% of positions unfilled).
Supervisors asked detailed questions:
- Supervisor Chan challenged the definition of small business (using the state's 100-employee threshold vs. the city's typical 25-employee/ $2.5M revenue threshold) and requested a breakdown of the $60 million in city loans to micro-businesses.
- President Walton asked about support for BIPOC entrepreneurs without Dreamkeeper funding and underscored the need for universal definitions of micro-business (the department uses 5 or fewer employees).
- Supervisor Safai questioned the organization chart (9 direct reports for the director) and requested specifics on investment in District 11, noting persistent storefront vacancies and a perceived lack of vision. He also contrasted the $2 million commercial rent relief fund (with $15 million in demand) against a $7.3 million loan fund, expressing concern.
- Supervisor Peskin requested demographic breakdowns of grant recipients, outcomes from technical assistance, and a list of all street festival/event grants. He noted that Black-owned businesses in his district (northeast corner) could not access certain equity funds concentrated in Bayview and Fillmore.
Director Sofis acknowledged the need for better metrics, a standardized definition of micro-business, and more transparent reporting. She stated the department is hiring a full-time director of racial equity and working to unify tracking systems.
2. Racial Equity in City Employment (Item 220472) – This hearing was continued to the call of the chair because the department head was unable to attend. The committee voted 4-0 to continue it.
3. City Budget Reserves (Item 220437) Controller Ben Rosenfield presented an overview of the city's 15 reserve funds, organized into four categories:
- Economic stabilization reserves: Rainy day reserve ($114.4M) and Budget stabilization reserve ($285.5M), both designed to cushion recession revenue losses (combined cap at 10% of general fund revenues).
- General reserve ($43.8M): Flexible fund for unanticipated costs within a fiscal year; must be replenished the following year.
- One-time purpose reserves: Budget stabilization one-time reserve ($54.8M) and Rainy day overflow ($0).
- Other risk reserves: Fiscal cliff reserve ($229.8M), Federal/state revenue loss reserve ($81.3M, about 12.4% of FEMA revenue), Public health revenue reserve (10% of DPH revenue, used at Laguna Honda risk), Free City College reserve ($5.3M), and smaller funds.
Supervisor Safai noted that the fiscal cliff reserve was designed to bridge projected gaps in FY 2024-25 and 2025-26 as federal stimulus is spent down. The public health reserve may be needed if Laguna Honda loses federal reimbursement ($16M/month). The Free City College reserve cannot be used for general funding but could be repurposed by board action. Mayor's Budget Director Ashley Groffenberger confirmed the administration is still balancing the budget and will provide details on June 1.
Key Outcomes
- Item 1 (Small business relief/OEWD equity plan): Continued to the call of the chair on a 3-0 vote (Vice Chair Safai absent, Supervisor Marr excused).
- Item 2 (Racial equity in city employment): Continued to the call of the chair on a 4-0 vote (all present members aye).
- Item 3 (Budget reserves): Filed on a 3-0 vote (Vice Chair Safai absent, Supervisor Marr excused).
- Prior to the items, the committee voted 3-0 to excuse Supervisor Marr for the remainder of the meeting.
Meeting Transcript
The meeting will come to order. This is the May 11th, 2022 budget and appropriations committee meeting. I'm Supervisor Hilary Ronin, Chair of the Committee. I'm joined by committee members President Shaman Walton, Supervisors Gordon Marr and Connie Chan, and we will be joined by Vice Chair Asha Safai shortly. We're also joined today by Supervisor Aaron Peskin. Thanks for being here. Our clerk is Brent Halipa, and I want to thank Kalina Mendoza from SFCov TV for broadcasting this meeting. Mr. Clerk, do you have any announcements? Yes, Madam Chair. And uh with the arrival of Vice Chair Safai, we do have uh we are now uh joined as a special meeting of the Board of Supervisors. Uh and with our return to the chamber, just a friendly reminder for those in attendance to please make sure to silence all cell phones and electronic devices, also kindly refrain from any flash photography. Uh 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 will take those who are awaiting on the telephone line for those watching channels 2678 or 99 and SFgovTV.org. The public comment call in number is streaming across the screen. That number is 415 65501. Uh that's again 415 65501. Uh then enter the meeting ID of 2497 841 9535, and then pound and then pound again. When connected, you will hear the meeting discussions, but we'll be muted and in listening mode only. When your item of interest comes up and public comment is called, those joining us in person should line up to speak. And those on the telephone should dial star three to uh 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. Um alternatively, you may submit public comment in writing in either of the following ways. Email them to myself, the budget and appropriations. Committee clerk at Br E N T dot J A L I P A at S F G-O-V dot or R G. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. You may also send your written comments via U.S. Postal Service to our office in City Hall. That's one. Dr. Carlton B. Good luck. Place, room 244, San Francisco, California, 94102. And thank you, Madam Chair. That concludes my announcements. Thank you so much. And I just uh wanted to make an announcement that we are planning on continuing item two today, uh, because the department head um was not able to make it, and we really wanted her to be here, and she wanted to be here. Uh so if you're waiting for that item, we will not be hearing it today. We will be continuing it. Um but Mr. Clerk, can you please call item number one? Yes, madam chair. Item number one is a hearing to receive presentations on the various direct small business relief programs currently supporting small businesses, their eligibility requirements and data on how many grants have been allocated in which neighborhoods and demographic data on small businesses who have successfully acquired relief and to present an equity plan for addressing small business recovery in the fiscal year of 2021 to 2022 budget. Members of the public who wish to provide public comment on this hearing should call 415-655-0001. The meeting ID is 2497 841-9535, then press pound twice. If you haven't already done so, please dial star three lineup to speak. A system prompt will indicate you have raised your hand. Please wait until the system indicates you have been unmuted and you may begin your comments.
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