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Record of Proceedings

BOS Budget and Appropriations Committee Hearing on Controller's Nine-Month Report – June 4, 2025

Budget and Appropriations Committee — Wednesday, June 4, 2025
BodySan Francisco, California
SessionBudget and Appropriations Committee
DateWednesday, June 4, 2025
StatusFILED
Video Record
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Transcript — Verbatim
0:10

Good afternoon.

0:11

The meeting will come to order.

0:12

Welcome to the June 4th, 2025 meeting of the budget and appropriation committee.

0:16

I'm Supervisor Connie Chan, Chair of the Committee.

0:19

I'm joined by Vice Chair Supervisor Matt Dorsey and members, Supervisors Joan Guardio, Shamal Walton, and shortly President Rafael Mendelman.

0:28

Our clerk is Brent Halipa.

0:29

I would like to thank Kalina Mendoza from SFGov TV for bycasting this meeting.

0:35

Mr.

0:35

Clark, do you have any announcement?

0:37

Thank you, Madam Chair.

0:38

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.

0:45

Should you have any documents to be included as part of the file, this should be submitted to myself, the clerk.

0:50

Public comment will be taken on our one item on this agenda.

0:54

When public comment is called, please line up to speak on the west side of the chamber to your right, my left along those curtains.

1:00

And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the trade by the television to your left by the doors if you wish to be accurately recorded for the minutes.

1:10

Alternatively, you may submit public comment in writing in either of the following ways.

1:14

Email them to myself, the budget and appropriations committee clerk at B R E N T.

1:23

SFGO V dot O R G.

1:25

If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file.

1:31

You may also send your written comments via U.S.

1:34

Postal Service to our office in City Hall at one Dr.

1:37

Carlton be good to place room 244, San Francisco, California.

1:42

94102.

1:44

And uh for today, we will be enforcing a couple of ground rules pursuant to our rules of order.

1:50

Uh first off, there is no standing allowed in the chamber uh during discussion, so please find any available space uh along the benches and uh you know please be seated uh until public comment is called.

2:01

Otherwise, there is an overflow room to the left when you exit the chambers where you can view the proceedings.

2:06

Uh we do allow video uh and photography, uh, but please turn off your flash uh when you do so.

2:13

Also, everyone attending uh is entitled to an undstructed view to our proceedings.

2:19

So we do ask if you want to hold up your sign, please hold it up no higher than your head.

2:23

And uh with that, Madam Chair, that completes my announcements.

2:26

Thank you, Mr.

2:27

Clark.

2:28

And with that, please call item number one.

2:33

Yes, item number one.

2:36

Is our uh hearing to discuss the controller's nine-month budget uh budget status report for the fiscal year of 2024 to 2025.

2:44

Madam Chair.

2:45

Thank you.

2:46

And today we have um the budget and analyst division of the controller's office, Michelle Alerstma.

2:53

Thank you.

2:53

Thank you, Supervisors.

2:54

Michelle Ellersmith from the controller's office.

2:56

Um yes, we're just gonna present a summary of our nine-month uh budget status report, which is issued um about three weeks ago.

3:04

So I have some slides.

3:06

Thank you so much.

3:07

Um the results of this report are largely a continuation of the six-month report and the other um the March update that we provided um shortly after that.

3:19

Um the trends are largely continuing.

3:21

For example, um a net revenue shortfall and then uh uh additional surplus revenue of the Department of Public Health.

3:29

Um we're showing in sort of general fund unallocated revenues a net shortfall of 32.7 million.

3:37

Um that's not changed from our March projection.

3:40

We've been talking all year about weakness in hotel tax compared to budget, some weak weakness in sales tax, both what we generate locally and what is um subvene to us from the state.

3:51

Um and that's offset partially by some good news in business tax coming in stronger than we had budgeted, at least uh the 2024 tax filings that we have so far.

4:01

Um, and some recovery in our real property transfer tax.

4:05

Um property tax as a whole is showing some weakness due to really high volumes of assessment appeals and refunds going out the door, um, partially offset by a little bit of good news for the city side um on ERAF.

4:19

Um importantly, this assumes no changes to um federal funding that could result from the current administration's policies and actions to date.

4:29

That includes 87 million dollars in FEMA reimbursement in the current year.

4:34

Um for the department operating side, we're reporting 145 million dollar net operating surplus.

4:42

Um as we mentioned in our six-month report, some of that is um uh hold on spending continuing project money, about 20 million dollars in the current budget.

4:53

Um, and then across all other departments um savings, about 123 million.

5:06

Departments were requested kind of after the first quarter of the year to before the hiring freeze to restrain to addition to generate additional salary savings in the current year.

5:16

So we are seeing savings from that.

Discussion Breakdown — Share of Meeting
Budget and Finance███████████████████████████27%
Public Comment███████████████████████23%
Public Health██████████████████████22%
Homelessness█████████9%
Procedural█████5%
Public Works████4%
Public Housing████4%
Human Rights███3%
Police Oversight██2%
Summary of Proceedings

BOS Budget and Appropriations Committee Regular Meeting – June 4, 2025

On June 4, 2025, the San Francisco Board of Supervisors Budget and Appropriations Committee held a hearing to discuss the Controller's Nine-Month Budget Status Report for Fiscal Year 2024–2025. The committee heard a presentation from the Controller's Office detailing a net revenue shortfall, department savings, and looming risks from federal funding cuts, followed by extensive public testimony from city workers and union representatives opposing proposed layoffs and service reductions. The hearing was heard and filed on a unanimous vote.

Public Comments & Testimony

  • Michelle Daniels (DPH health worker) opposed elimination of the Community Wellness Center program in the Southeast Quadrant, noting decades of services being withdrawn from underserved communities.
  • Felicia Jones (SEIU 1021) criticized the mayor's "slush funds" and alleged that the mayor is prioritizing jail over recovery, and called for fair treatment of workers.
  • Bianca Polavina (IFPTE Local 21 president) stated that the mayor's layoffs are a policy choice, not a necessity, and urged the board to protect public services.
  • Kristen Hardy (SEIU 1021 regional VP) pointed to $5 billion in outside contracts and corporate tax lawsuits (e.g., Airbnb) as a way to avoid cuts, and said the mayor has not used his influence to stop those lawsuits.
  • Ocean Ashworth (IBEW Local Six) argued layoffs are a choice, not a necessity, and that reductions lead to higher overtime or contractor costs.
  • Judy Sorrel (CityBuild program, 19-year employee) said she received a layoff notice and that cutting CityBuild would harm formerly incarcerated and underserved workers' access to construction trades.
  • Jennifer Asteen (DPH registered nurse, 15 years) called for making corporations like Airbnb pay their fair share, and criticized the mayor's donor relationships.
  • Chiara Herman (PUC, Local 21) said private contractors cost more and are less accountable than city workers.
  • Nicole Termany Germain (SEIU 1021 vice president, 32-year library employee) urged restoring all laid-off workers, stating "Labor is united on no layoffs."
  • Moses Corret (Planning Department, 25 years) noted he expects a layoff notice and that the planning department's reliance on fee revenue is short-sighted.
  • Lily Morales (OEWD, 13 years) said she received a layoff notice and serves underrepresented communities.
  • AJ Thomas (OEWD, Retirement Board president) warned that gutting the CityBuild compliance team would prevent enforcement of local hire programs.
  • Vincente Cordero (DPH, Local 21) argued against defunding programs while allowing corporate tax avoidance and increasing police budget.
  • Brenda Barros (45-year SF General employee) said the mayor's budget does not address racial discrimination and that black workers will be hit hardest.
  • Sarah Jarman (DPH, Trauma Informed Systems) said her program is slated for elimination, undermining DPH's commitment to a healthy workforce.
  • Matthew McIntyre (ARC, job coach) warned that Muni service cuts harm disabled clients and that food assistance cuts affect food insecurity.
  • John Thorne (DPH, Local 21) said layoffs tear apart teams, departments, and communities.
  • Aisha Brown (District 10 resident) opposed cutting the Community Wellness Program at Hope SF, which provides health education and mental health services in low-income communities.
  • Jude Dybel (Human Rights Commission, SEIU shop steward) said the mayor's cuts to HRC and Status of Women are Trump-like and will harm efforts to keep people housed.
  • Aaron Backis (EMS, Local 21, 19-year employee) highlighted his role in COVID-19 vaccine distribution and warned that layoffs would harm public health capacity.
  • Maggie Loush (Planning Department, Local 21) said the mayor asked staff to do more but then cuts colleagues.
  • Gabriela Casellos (Soda Tax Advisory Committee) said the mayor is ignoring the committee's recommendations and taking money from children's dental health.
  • Dylan Hamilton (Planning Department) said the budget will hurt low-income communities of color, and the mayor has not pressured Airbnb to drop their lawsuit.
  • Tammy Bryant (Human Services Agency) said layoffs increase caseloads for remaining staff and harm timely services; she opposed increasing police overtime when crime is down.
  • Rhett Peacock (Treasury & Tax Collector, SEIU 1021) said cutting the tax collector's office is counterproductive as it brings in revenue.
  • Luna Vargas (SF General ARF) said the mayor's budget threatens to displace 83 residents and called for more services for severe mental illness.
  • Miguel Carrera (Coalition of Homeless) said the mayor is taking money from Prop-funded homeless services, leading to more homelessness.
  • Ruben (social worker, SEIU 1021) asked the mayor and supervisors to have a heart and backbone.
  • Speaker (name not given) noted the city is hiring 500 police at $167k salary while cutting basic services.
  • Anna Roche (SFPUC, Local 21, 25 years) called layoffs a betrayal of progressive values and said they cost more in the long run.
  • Rudy Gonzalez (SF Building Trades secretary-treasurer) said the cuts to CityBuild and local hire programs will harm economic recovery and increase recidivism.
  • Jeff Spears (Planning Department, 12 years) urged the board not to become the new "DOGE" and to support workers.
  • Will McCallum (Planning Department, Local 21) said overdose deaths have increased 50% since the mayor took office, and that police overtime is a waste.
  • Joyce Wong (CityBuild compliance manager, 15 years) said she received a layoff notice and asked the board to remember the 1,700 people who graduated from CityBuild.
  • Regina East Loss (ACLU, District 1) called for no SFPD overtime, full spending of Prop I affordable housing funds, and no further Muni cuts.
  • Heather Samuels (Planning Department) said the mayor called the planning department a solution, but cutting staff prevents them from doing their job.
  • Renee Scott (SEIU 1021) opposed power washing and said the mayor's budget is wasteful.
  • Sylvester (PUC engineer, Local 21) said a trust fund baby bought his way into City Hall and is destroying it.
  • Courtney Schreiner Lee (Police Department, Local 21) said her policy analyst position is the only civilian policy writer and its loss would risk returning to fragmented policies.
  • Queen Vanessa (Hunters Point native) called the mayor a plutocrat and urged him to read Supervisor Walton's book.
  • Lorna Gainer (city employee, 11 years) said layoffs lead to people hurting themselves and living on the street.

Discussion Items

  • Controller's Office Presentation (Michelle Ellersmith): Presented the nine-month budget status report showing a net revenue shortfall of $32.7 million (unchanged from March), a $145 million net operating surplus largely from DPH patient revenue and departmental savings. Noted weaknesses in hotel tax, sales tax, and property tax due to assessment appeals, offset by stronger business tax and transfer tax recovery. Assumes no changes to federal funding including $87 million in FEMA reimbursements. Reserves: $400 million in the mayor's proposed budget (from federal/state emergency grant disallowance reserve, fiscal cliff reserve, and abandoned accounts) to address potential federal/state funding cuts.
  • Supervisor Walton: Questioned the FEMA risk, noting a 90% disallowance on non-congregate shelter costs ($400 million claimed, $148 million received, potentially $140 million clawback). Asked about the remaining $260 million expected reimbursement. Requested a walk-through of reserves and general fund baselines and set-asides. Later stated that DPH's cuts to Hope SF are despicable, that layoffs are not necessary when resources exist, and that the city should not cut workers while corporations owe hundreds of millions.
  • Supervisor Chan: Acknowledged the difficulty of the budget process, thanked city workers, and expressed commitment to protecting workers and sanctuary values. Noted that one job loss is too many.
  • President Mandelman: Thanked workers and nonprofit partners, acknowledged the mayor's budget contains tough choices, and said the board will engage seriously with those choices over the next 20 days. Noted that the mayor may have already done the easy cuts, making policy choices more difficult.
  • Supervisor Dorsey: Shared his own history as a city employee, expressed uncertainty due to federal actions, but committed to honoring city workers' service and avoiding layoffs where possible.
  • Supervisor Engardio: Expressed confidence in the committee's experience, stated his philosophy that investing in city workers saves money in the long run.

Key Outcomes

  • The committee unanimously voted (5-0) to hear and file the hearing on the Controller's Nine-Month Budget Status Report. No amendments or further actions were taken.
  • The hearing served as an early step in the budget process, with supervisors indicating they will work to find alternatives to the mayor's proposed layoffs and service cuts, though no specific commitments were made.
  • The committee acknowledged the uncertainty from federal funding cuts (especially FEMA and Medicaid) and the high volume of assessment appeals affecting property tax revenue.

Meeting Transcript

Good afternoon. The meeting will come to order. Welcome to the June 4th, 2025 meeting of the budget and appropriation committee. I'm Supervisor Connie Chan, Chair of the Committee. I'm joined by Vice Chair Supervisor Matt Dorsey and members, Supervisors Joan Guardio, Shamal Walton, and shortly President Rafael Mendelman. Our clerk is Brent Halipa. I would like to thank Kalina Mendoza from SFGov TV for bycasting this meeting. Mr. Clark, do you have any announcement? 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, this should be submitted to myself, the clerk. Public comment will be taken on our one item on this agenda. When 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 trade by the television to your left by the doors if you wish 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 appropriations committee clerk at B R E N T. SFGO V dot O 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 at one Dr. Carlton be good to place room 244, San Francisco, California. 94102. And uh for today, we will be enforcing a couple of ground rules pursuant to our rules of order. Uh first off, there is no standing allowed in the chamber uh during discussion, so please find any available space uh along the benches and uh you know please be seated uh until public comment is called. Otherwise, there is an overflow room to the left when you exit the chambers where you can view the proceedings. Uh we do allow video uh and photography, uh, but please turn off your flash uh when you do so. Also, everyone attending uh is entitled to an undstructed view to our proceedings. So we do ask if you want to hold up your sign, please hold it up no higher than your head. And uh with that, Madam Chair, that completes my announcements. Thank you, Mr. Clark. And with that, please call item number one. Yes, item number one. Is our uh hearing to discuss the controller's nine-month budget uh budget status report for the fiscal year of 2024 to 2025. Madam Chair. Thank you. And today we have um the budget and analyst division of the controller's office, Michelle Alerstma. Thank you. Thank you, Supervisors. Michelle Ellersmith from the controller's office. Um yes, we're just gonna present a summary of our nine-month uh budget status report, which is issued um about three weeks ago. So I have some slides. Thank you so much. Um the results of this report are largely a continuation of the six-month report and the other um the March update that we provided um shortly after that. Um the trends are largely continuing. For example, um a net revenue shortfall and then uh uh additional surplus revenue of the Department of Public Health. Um we're showing in sort of general fund unallocated revenues a net shortfall of 32.7 million. Um that's not changed from our March projection. We've been talking all year about weakness in hotel tax compared to budget, some weak weakness in sales tax, both what we generate locally and what is um subvene to us from the state.

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