Good morning.

The meeting will come to order.

Welcome to the June 10 meeting of the budget and appropriation committee.

I am Supervisor Connie Chan, Chair of the Committee, and I'm joined by Vice Chair, Supervisor Matt Dorsey and members Supervisor Danny Sauter, Shaman Walton, and our clerk, it's Brent Halipa.

I would like to thank uh Jeanette uh Akinolf uh from SFGov TV for broadcasting 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 sound all cell phones and electronic devices to prevent interruptions to our proceedings.

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

Public comment will be taken on each item on this agenda.

When your out 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 trade by the television to your left by those doors.

If you 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 appropriations committee clerk at B R E N T.j.

at SFGO V dot ORG.

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 because the place room 244, San Francisco, California, 94102.

And finally, items acted upon today, are expected to appear on the board of supervisors' agenda of June 16th, unless otherwise stated.

Madam Chair.

Thank you, Mr.

Clerk.

Before we start, we will need to excuse President Raphael Mendelman, and I would like to make the motion to excuse him.

Second.

Second by Vice Chair Dorsey and a roll call, please.

And on the motion, excuse Supervisor Manelman from attending today's meeting.

Seconded by Vice Chair Dorsey.

Vice Chair Dorsey.

Dorsey, I.

Member Sauter.

Sauter, aye.

Member Walton.

Walton, aye.

Chair Chan.

Aye.

Chan I.

We have four eyes.

The motion passes.

And also would like to announce that today's for today, the public comments will be limited to one minute.

And so with that, Mr.

Clerk, please call item number one.

Yes, item number one is our hearing to discuss the controller's nine-month budget status report for fiscal year 2025 to 2026.

Madam Chair.

Thank you.

And today we have the controller's office here.

Good morning, supervisors.

Michelle Ellersma from the controller's office.

This is our final update on the current fiscal year's operating performance.

We have a short slide deck.

Thank you.

In general, uh approvement of $54 million from the last time we came to you to talk about the current fiscal year, which part of two-thirds of which gets applied to the budget that you will consider later today.

Overall, the improvement in revenue from the last time we came is $53 million.

And we have some department surpluses in the Department of Public Health and Human Services agency largely.

You have heard all of this year's overtime supplementals with the exception of the Sheriff's Department, which is on 30-day hold.

And we'll come to you later this month, or I believe.

Very quickly, looking at the green box all the way to the right hand side, you can see the citywide revenue improvement.

That's really our tax revenue.

9.5 million of that gets sent to the baselines.

As our charter requires, 23 and a half million dollars gets deposited to the budget stabilization reserve because most of that surplus is um extraordinary growth in transfer tax revenue, and our financial policies require us to put 75% of that good news into this reserve.

So none of those things about 20 million dollars in revenue news, and the rest is from departments.

Looking a little bit more at the revenue picture, again, all the way to the right in this report.

Most of the good news is in transfer tax.

Um 31 million dollars.

This is just a um, this is kind of setting the stage for what you're gonna see in the budget as well.

We're just projecting a continuation of a really um, you know, San Francisco commercial is on sale, and so folks are scooping it up at discounts.

And there's also a lot of um, there's been an uptick in some of the residential um as well.

Um, I think, sort of compared to budget, the story is really um real property transfer tax and business tax to the good.

And you'll see farther down below.

We've written off um all FEMA COVID reimbursements for the current year.

There's nothing in the budget, and we are um kind of going back and forth with FEMA and arbitration about um some disallowances that they have made.

So that story is not over.

Um it's just we're not assuming any any revenue coming into this year or any future years.

Um so now it's all about how much they may or may not claw back from us.

But you'll hear more about that in a moment.

Um, in terms of departments, um, the overtime supplemental you will be considering.

Um, should solve the sheriff department shortfall on this table.

That really depends on how they close the year, literally in the next couple of pay periods, if they can bring their um overtime spending um in line with what's in the supplemental.

Most of this is um paid for with uh liquidating equipment purchases, capital projects, and some permanent salary dollars.

In the superior court, this is really an indigent defense overspending issue, and we'll they they really bill um at the very end of the fiscal year.

So we will know in a couple of weeks how they stand against this forecast, um, and if there's a retroactive supplemental that is needed to the good.

Um, most of the rest of the the sort of underperforming is really a revenue picture, and that'll be offset by tax revenue to the good.

Um looking at department surpluses really um expenditure savings in the human services agency are driving that, and revenue news in the department of public health, and most of that is in the general fund and behavioral health, and at Lugona Honda Hospital.

There's revenue shortfall at the general, and um a lot of this news again is gonna be carried.

This is kind of setting the stage for um revenue that we're seeing in the budget as well.

Um we only show you um revenues.

Again, we'll cover this a little bit more in the next presentation on the revenue letter, um, so I won't spend any more time on it right now, but I'm happy to answer any questions.

Not at the moment great.

Um thank you very much.

Do you need to call the item or should I just jump in?

Uh this is on the revenue letter.

Revenue letter.

All right.

Do I think we need to go to public comments on for item number one?

Yes.

So my apologies.

So let's go to item.

Let's go to public comment for item number one.

Yes, we're now opening public comment for our item number one uh on the discussion of the controller's nine-month budget status report.

We have any members of the public question addresses committee.

Madam Chair, we have no speakers.

Seeing no public commons, Papa Common is now closed, and Mr.

Clerk, please call item number two.

This item number two is our hearing.

Sorry, my apologies for item number one.

I would like to actually make the motion to um have this hearing file and heard and the roll call, please.

Sorry, second second by vice chair Dorsey and a roll call, please.

And on that motion by Chair Chan, seconded by Vice Chair Dorsey that the hearing in item number one be heard and filed.

Vice Chair Dorsey.

Dorsey, I, Member Sauter, Sauter, aye, Marble Walton.

Walton, aye.

Chair Chan.

I.

Chan, I we have four eyes.

The motion passes.

And now let's call item number two for the revenue letter.

Yes, item number two is our hearing on the fiscal years 2026 to 2027 and 2027 to 2028 revenue letter in the controllers's discussion of the mayor's proposed budget.

Madam Chair.

Thank you.

And today, of course, we have our controllers here.

Uh, thank you.

Uh, Chair Chan, members of the committee, Greg Wagner, controller.

Um, I'm gonna give uh some brief overview remarks about our revenue letter, and then I'll turn it over to my colleague uh Carol Lou to uh talk about some numbers.

Uh but as I think the uh committee uh is aware, Charter Section 9.102 requires the controller to comment on the reasonableness of economic assumptions and revenue estimates in the mayor's budget.

Uh the purpose of this provision is uh you'll often see in other local and state governments that there's an argument about what the revenue assumptions are or some of the basic framework for the budget in San Francisco.

This is something I would say that we do uh relatively well compared to many jurisdictions.

We have a process for uh working through and getting a consensus projection on revenues, and this is a measure uh in the charter for us to come to report to you on whether that uh consensus kind of held through the mayor's budget submission.

Uh we have found that the revenue assumptions in the budget are reasonable.

Uh they're consistent with the projections that were in the five-year financial plan and reflect uh some of the things that you heard about the updates from the nine-month report.

Um, so we we do find the uh revenue estimates uh assumptions to be reasonable.

There is, of course, significant uncertainty for reasons that we've talked about at this committee and elsewhere.

Uh, we're at a moment of transition in both the economy and uncertainty in our policy environment at the federal and state levels, uh which I don't need to elaborate on, but there is the potential for change.

Um we find that the uh budget makes uh prudent use of reserves from a financial perspective.

There's of course a policy element to this, but from our review uh we looked at a couple of things.

Uh there are two kind of categories of uses of reserves in the proposed budget.

Uh one uh each year, since we're making where where uh we have a two-year budget.

Uh, there are some assumptions about use of reserves.

There are uses of reserves that last year in the two-year budget were scheduled for year two.

Uh those reserves remain now in year one, and so uh we we find those to be prudent given that they were kind of previously assumed as a source in the budget.

Uh the other category is the use of the state and uh federal risk reserve, as you all know.

Um, in the prior year's budget, uh the board and the mayor approved creation of a state and federal revenue risk reserve and appropriated uh funding to that reserve.

Uh the budget does propose to use uh some funding from that reserve 41.4 million in the first year and 43.5 uh in the second year.

Uh the use of the reserve is I think we all know that we have we created that reserve for seeing a risk in federal revenue, and that risk has become a reality.

And so this uh the budget proposes to use a portion of the reserve to address what is now a reality that's consistent with the reserves creation, uh, and it uses a portion of the reserve, but it uh retains uh funding in the reserve that uh seems kind of a reasonable balance commensurate with the ongoing risks to uh state and federal revenues uh that we're all aware of.

Um, significant risks uh to the budget.

We always have some risks.

I think we're in a moment of uh financial uncertainty.

Uh but we it does appear likely that there are gonna be a significant number and value of financial measures on the November ballot, and there are still decisions to be made about what those are gonna look like but for the most part uh uh this is a gonna be a big financial year at the ballot, and there is downside compared to what's assumed in the budget.

So a couple of those uh uh particular categories.

Uh we have two measures that appear likely to be on the ballot for funding Muni, uh sale regional sales tax and a parcel tax.

Uh MUNI's budget assumes that those measures are gonna pass, and we've been working closely with them on contingency planning.

Uh but there is risk there.

If one or both of those measures don't pass, uh the general fund wouldn't automatically step in and backfill, but this would be a reduction in funding that would require very significant service level changes that probably would compel us all to have a conversation about not just what happens at Muni, but what other resources are available to step in.

The other point that I'll make on this is given the nature of where we are in this economic moment, a lot of our kind of trajectory of our recovery is dependent on people getting to downtown, getting to neighborhood commercial districts coming to visit.

And if we have a big reduction in our transit services, it's hard to square that with our economy continuing on the trajectory that we hope.

So there's risks to our general fund tax revenue if we were to see a big reduction in transit funding.

Second one that I'll just mention is a potential state measure that looks like it could qualify and appear on the November ballot, which would essentially eliminate our real property transfer tax.

We'd still be able to impose it, but at only a tiny fraction of the current uh rates that apply in San Francisco, you heard uh from our director of the budget analysis division that transfer tax is one of the things that has been a positive spot in our revenues.

If this state measure passes, it would be potentially uh over 300 million dollar reduction to general fund sources and to the primary revenue that feeds our economic stabilization reserves.

Uh so that is a significant uh concern.

So between those measures, other potential tax measures, potential general fund set aside measures that are pending and and could go on the ballot.

Uh we have potentially 700 million dollars or more of financial downside compared to what's assumed in the budget, and that means we're gonna be probably in a mode of monitoring and adjusting as we go through this budget process.

I'll also mention that the proposed budget is balanced assuming uh approximately $80 million of salary savings in the second year of the budget.

Those are unspecified uh position reductions, and those will have to be kind of fleshed out and operationalized as we go through the coming year.

There's a reasonable reason for doing it this way, which is to try to instead of making cuts today, giving creating a runway to make planning about organizational changes and have a little bit of time to do that.

But again, that'll be something that we will have to financially monitor as we go through this next year leading up to our uh upcoming next year's budget process since there is a savings assumption.

Uh the budget does uh create a significant improvement in the ongoing structural deficit.

So we're estimating that there's about a 300 million dollar improvement in the structural deficit.

So that's significant progress that comes from a combination of savings and revenues.

So as we talk about that difference between the revenue and expenditure forecast, we're gonna close that, but we're not gonna close it all the way.

Uh, the budget does rely uh on one-time sources, particularly the reserves I mentioned and the use of fund balance to get us through these two years, and it makes progress on the deficit.

But once we get to year three, we do uh expect that we will still have a deficit and a structural deficit going forward, although it will be smaller because of the on any ongoing actions taken to balance in this cycle.

Um the fund balance is uneven between the two years.

There's more fund balance in the second year of the budget, which matches kind of the shape of our deficit.

But again, that's not a solution that will continue fully into year three, although there is fund balance designated for year three.

And then I won't belabor it, but of course, heightened uncertainty compared to our our uh kind of normal operating state given the federal and state environment.

Um so I'll leave it at that.

I'll turn it over to my colleague uh Carol Loop, and then happy to answer questions if you have them.

Okay.

Super quick picture of the overall budget.

It is $16.9 billion, all funds growing to $17.2 in the second year of that $7.6 million billion, sorry, billion growing to $7.9 billion of general fund.

So a bit more about that.

First is tax revenue, which makes up two-thirds of the general fund.

Tax revenue is growing by $143.0 million in the first year versus nine months and then declines by $50.4 million in the second year.

Kind of growing on the nine-month report is that business tax revenue in the first year is growing because of strength in technology and professional services locally as well as worldwide, as well as administrative changes related to proposition M.

The second big general fund tax story is related to the commercial real estate reset, which Michelle also discussed.

We see in the nine months the current year as well.

That has kind of two effects.

The first is a sustained transfer tax increase, which is assumed in the budget, but moderating that is that property transactions are kind of restrained.

They're either falling or year over year or are very modest.

And then our other economically sensitive taxes, such as sales and hotel are still below pre-pandemic levels, but we do see them growing the current year and carry that assumption forward.

So here are a few numbers to kind of underscore those points.

Another big kind of revenue story happening in the budget is really to HR is related to HR1 and DPH revenue, consistent with the March five year financial plan.

The mayor's proposed budget includes significant revenue losses associated with HR1, but it is a little better versus what was previously assumed.

What made it better is because of investments in eligibility workers at HSA, which maintain Medical and Calfresh enrollment to the best that we can, as well as increased claiming costs related to uncompensated care, as well as a state budget backfill.

So it's not as bad as it was assumed to be, but still pretty bad.

DPH public health revenues are also projected to grow by a bit in the first year and decline.

It would have been worse, or it would have been better absent the federal and state cuts.

Greg already described the ongoing solutions or described this a bit, but the proposed budget makes progress towards closing the structural deficit with about 300 million dollars of ongoing savings.

The March five year financial plan forecasted a gap of 750 in 2829, with this 300, we think 2829 will be closer to 450 million.

Roughly half of the ongoing solutions were revenue related between tax and public health revenue, and the remaining were driven by reductions in citywide personnel costs and other initiatives.

505 million was related to prior year fund balance, 200 million related to reserves.

We described the federal and state revenue risk reserve, the prudent and commensurate use with the financial risk.

There's also the use of business tax stabilization reserve of 30 million dollars, which partially offsets the timing difference that I just described.

And the controllers office certifies compliance with the city's non-recurring revenue policy, which says that the city needs to match one-time sources with one-time uses.

We just note that the cost for increased eligibility work at the human services agencies is budgeted as one time, and this could possibly be ongoing work.

This is a taking a snapshot step back, a snapshot of our reserve status, which shows what I just described.

There's also the additional $70 million of reserves that were appropriated in last year's budget, as well as required reserve deposits shown in this picture.

As well, the budget assumes a hundred million dollar deposit to the R City R home fund to reserve for federal and state contingency risks, due to strengthen homelessness gross receipts tax revenue in the current year.

So there are a number of risks that we've already outlined previously.

First is legislative risk.

And they don't appear to have passed.

So there's no results, there's no resulting change in the budget.

This table below shows some selected number of relevant financially relevant November 26 proposals, totaling up to possibly 700 million dollars of risk, should things pass or not pass, depending.

And I just want to highlight, and Greg already highlighted this, but the big the biggest number here is the $350 million loss should the state initiative to restrict transfer tax.

There continue to be federal funding risk besides HR1.

There are various proposals to reduce funding in policy areas such as permanent and supportive housing, as well as just ongoing risk related to termination and the freezing or conditioning of grants.

This has a proposal that would reduce the city's excess ERAF revenue by approximately $30 million annually, and these changes are not fully assumed in the proposed budget.

And finally, there's just general economic risk.

Tax revenue in the budget assumes a relatively strong national and international economic growth, modest local growth, and stable interest rates, but policy choices made at the federal government have been inflationary and destabilizing.

And additionally, there's so much economic growth assumed, especially in California and San Francisco related to AI, and that can be uncertain and volatile.

Finally, our local requirements are met in the budget.

We are making the city is making proposed making required deposits of 163 million dollars to the budget stabilization and general reserves.

Those are driven by formula, by revenue, and they meet our the city's financial policies previously adopted by the mayor and the board.

Additionally, the mayor's proposed budget adheres to all the voter adopted spending mandates, totaling the general having a general fund impact of almost $1.2 billion.

And this is a table kind of outlining those mandates.

I think that's it.

Any questions?

Yes.

Thank you for the presentation.

Just wanted to make sure that not only that I understand, but sort of highlight for, which, well, let me put this in context first.

I appreciate with the budget, the mayor's budget proposal inclusive of almost 1.3 billion dollars worth of reserve.

And I think that's that's important.

Um, and I think it's critical for time that we have to tackle um potential more cuts from HR1.

But I just wanted to highlight and understand that for the federal and state revenue risk reserve, um, that it seems majority of the portion that really comes from for the 433.3 million dollars worth of it, it's really um the anticipated a sheeted dollars from healthy SF reimbursement.

Yes, that's correct.

Um, I think it's about half of it was funded through um prior other reserves being consolidated, and the other half of that 443.3 anticipated reserve is coming from um the HCSO is achievements, yeah, and which I I'm in supportive of that reserve.

Um, but I want to understand so that means in the mayor's proposed budget for both this upcoming fiscal year and the subsequent each year is being like they are actually drawing down that reserve, about 41 million dollars in the next fiscal first fiscal year, and then additionally another 40 million, so then it's drawing down from that reserve, correct?

Correct.

And then now we're facing another proposal by Mayor Lurry along with Supervisor Malgar, which is the housing trust fund, that it's gonna come to this body, and help me understand about that, um, which is the first fiscal year is gonna take down 50 million dollars, and then subsequently I see that, um, and then subsequently is the additional uh so a total of 125 million dollars for the next 10 fiscal years, but but but then I don't I don't understand it.

Like, and then how is it increase additional nine million dollars per year and do up to 60 million dollars?

Okay, I'll take a first stab at that.

But right now the housing trust fund is about 50 million dollars as currently written.

Um, and I believe the proposal would grow that from its existing 50 ish million dollars up to 125 million dollars over a period of 10 years per year per uh per fiscal year.

Yeah, and so the um the costs would be 6.1 million dollars in 2829 and 13.6 million dollars in 2930, but it would grow from 50 to 125.

So the first year will be like like so the technically it would be per fiscal year is a set aside of 50 million for the first year is 50 million dollars, and then it grow by the the set subsequently will be 56 point something, and then another 56 plus nine, so then that makes it 65, and then continue to grow until it reach in 2035, reach at 125 million dollars cap per year.

Correct.

Those are general fund transfers of that amount.

Yeah, and so I just again wanted to set in context about the housing trust fund that's gonna come, not this body, it's a different committee, it's gonna come to the rules committee.

Um, this is all simultaneously happening, and which the board will have to vote on this as full board to decide whether we're gonna do a set-aside um of housing trust fund, um, and then two percents for them for the voters to approve.

Meanwhile, we actually have what as the controller has indicated, which is alarming.

Well, for me that it's alarming, that potentially, you know, other tax measure, again, you know, that's gonna come before us.

Um, that's including uh affordable housing guarantee act again that will set aside another chunk of money, in fact, in a bigger chunk.

Maybe I don't understand it correctly, but it seems to me that it's actually setting it aside of uh immediately 114.1 million dollars, correct.

My understanding of that um proposal, which might be collecting signatures, is that it would shift funding um from the general fund to a special purpose fund.

And then I'm glad to hear, I think if I understand it correctly, that Mayor Lurry along with Supervisor Bala Mammu is now no longer um going forward with the real property transfer tax rates.

That is also known as the Built Act, because that one would have um potentially decreased our revenue by 93.8 million dollars and more per fiscal year.

That's correct.

And then at the same time, we could be on a state level, facing a save prop 13 ballot measure, but that's at a state level that will impact us as a city that we will also then lose revenue, tax revenue, transfer tax revenue, approximately 30 and 49.2 million dollars, well 350 million dollars per fiscal year.

Correct.

I may have a curse words for that, but I will not go with that.

Um so and then we're also so with that, um, we're also facing a deficit for SFMTA.

Should we do not have should voters decide not to pass the parcel tax and the and potentially regional sales tax, that's roughly anywhere between 300 and 400 million dollars deficits alone for SFMTA.

That's correct.

Thank you.

Um thank you for validating those questions, and I know that they somewhat are rhetorical, but I think that it's important for them to for me to highlight as budget committee chair that colleagues.

I think that um clearly it's not just this body has to make some decisions.

I think we're basically having a hearing today to um have this um understanding about where the city's financial and fiscal conditions um, but I do think that in the full board we will have some decision to make um and also um with the understanding that we are not, in my opinion, um, in the best fiscal health at the moment, um, and that we while I appreciate that Mayor Lurie has presented us a balanced budget, is to also recognize that that budget um has already um used one time revenue um to bridge that gap um so that we do not suffer uh significant cuts around um human service agency services uh or cow fresh and medica medical cuts that the city is already facing.

Um while I appreciate it's only 41 million dollars per fiscal year drawing from reserve, there's no doubt that it is already we see as a city as a drawing from reserve to bridge some of these gaps.

I also do appreciate that mayor Lurie proposed a balanced budget with addressing uh uh ongoing fiscal, like a structural physical deficit, and that's important.

And I think that we should, in my opinion, I am committed to do everything I can to support that um and to kind of maintain a uh ways to again continue to tackle structural deficits.

But I am not in a position, uh, I don't think I will be convinced uh after all said and done throughout this budget to support any measure, be a signature gathering or um even that by vote uh to present the voter for the options to simply set aside when we are not in a position to actually set aside any funding when I know that it could then significantly impact the rest of this city in its operation.

So I just want to put it on record on record at right like right now uh with this, and it's based on the fact that is presenting to us from the revenue letter.

Thank you.

Um I do not see names any names on the roster, but unless any colleagues have questions and comments, we will go to public comment on this item.

Yes, we're now opening public comment on this item number two regarding the controller's revenue letter.

If we have any members of the public course to address this committee, Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Colleagues, I would like to make the motion um have this item file and heard and file.

Second by Vice Chair Dorsey and the roll call, please.

And on that motion by Chair Chan.

Seconded by Vice Chair Dorsey that this hearing be heard and filed.

Vice Chair Dorsey, and Dorsey I.

Member Soder.

Solder, aye, member Walton, Walton.

Aye, Chair Chan.

Aye, Chan I.

We have four eyes.

The motion passes.

And so with that, Mr.

Clark, please call items three and four together.

Yes, item numbers three and four.

Our resolutions approving the fiscal year 2026 to 2027 budgets of the Office of Community Investment and Infrastructure Operating.

Has the successor agency to the San Francisco Redevelopment Agency.

Item number three approves their interim budget of OCI.

And item number four, sorry, item number four approves the fiscal year budget and approving the issuance by OCI of bonds in an aggregate principal amount not to exceed $275 million for the purpose of financing a portion of OCII's enforceable obligations.

Madam Chair.

Thank you.

And today we have the Office of Community Investment and Infrastructure here.

Thank you, Madam Chair.

Greetings, members of the budget committee.

I'm Thor Kazlovski, the Executive Director of the Office of Community Investment and Infrastructure, your former San Francisco Redevelopment Agency.

I want to thank you for the opportunity to present on our fiscal 26-27 budget.

If you can move to the next slide.

OCII's work began in 2012 after the state dissolved California redevelopment agencies across the state.

And today OCI is completing its state authorized enforceable obligations in three major development areas that remain.

One of them is the Trans Bay area, depicted on the map in red at the top.

The Mission Bay area depicted in the middle in purple, and the Hunter's Point Shipyard and Candlestick areas, depicted in green towards the bottom.

Our work is focused on delivering tangible results in housing production, infrastructure delivery, neighborhood investment, and economic opportunity.

Those are shared priorities across the city, and they're reflected in the mayor and this board's budget and policy agenda.

In those areas, we leverage public-private partnerships to invest in housing, especially affordable housing, new public infrastructure and parks, commercial development, and through our projects, maximize economic opportunities for local businesses and workers.

Through these three major projects, we will produce 28,000 units of housing, of which nearly 50% will be affordable, almost 400 acres of parks, and 13 million square feet of commercial space.

We've completed approximately half of our commercial projects and have nearly 350 acres of parks remaining to be built.

Currently, we have built over 35% of our housing production, and we continue to move projects from planning to completion at a time when housing production remains one of San Francisco's most urgent challenges.

This helps to ensure that working families, seniors, and long-time residents can remain in San Francisco and advances the city's broader goal of retaining residents and strengthening neighborhood stability.

I want to give the Board of Supervisors an update on our affordable housing work over the past 18 months.

During this time, with our development partners, we've opened up six sites, totaling nearly 700 units of affordable housing across the city.

The image on the left is the design that the architect drew, and the image on the right is the building as it stands today in real life.

The image at the top is in the Trans Bay area at the corner of Folsom and Beale.

It's 150 senior units renting at 15% to 50% of area median income or AMI.

The site below is also in Trans Bay as well, at the corner of Folsom in Maine, and it's 180 family units renting at 30% to 80% of AMI.

Next.

The site at the top is in Mission Bay at the corner of Terry Francois Boulevard and China Basin.

It's 150 units of home ownership, and it's selling at 80% to 110% of AMI.

The site below is in the Hunters Point Shipyard in Bayview.

It's an inclusionary project with 60 market rate units and nine affordable units selling at 80% of AMI.

Next slide.

These sites are also in the shipyard in Bayview.

The top one is 70 family units renting at 40% to 50% of AMI.

And at the bottom is a project with 110 family units renting at 30% to 50% of AMI.

So let me just illuminate and share with what these affordable affordability levels mean.

The majority of OCI's housing, over 70% of it, is for households earning 50% of AMI or less.

And let's put that in context.

In 2026, a family of four in San Francisco at 50% of AMI qualify for housing at $81,000 a year of income.

Minimum wage in San Francisco is just over $19 an hour.

So that means that two people in a household of four doing any job in San Francisco making minimum wage can afford to live in OCIA's housing.

Our goal is to make housing affordable for as many San Franciscans as possible.

We've also heard from many of our residents about our housing, what their different situations were, what their housing journey has been, and I want to share some of those stories with you today.

One of the residents that was recently housed at the shipyard was living for many years in public housing in a one bedroom with her daughter.

As her daughter got older, the family needed more space.

Well, she applied for and was able to qualify for a two-bedroom house unit at the shipyard.

She says since moving in, she's experienced a strong sense of community and has led a successful effort to establish a school bus stop for the shipyard families.

We want to thank her for her advocacy.

Another resident is a descendant of a family displaced originally by the former redevelopment agency during urban renewal.

The family lived in Las Vegas and was struggling financially and was recently evicted.

They were able to qualify for a four-bedroom at the shipyard.

And since moving in, one parent is now attending San Francisco State University and pursuing her insurance license, and we've restored a generational connection to San Francisco.

Another resident was also displaced by redevelopment and urban renewal.

He's a single father.

He was raising his son in Sacramento and came back to San Francisco.

He described his move to San Francisco as a fresh start for his family.

So the community is welcoming and has a good public transportation system because he doesn't have a car, so he enjoys that.

She's a self-employed bookkeeper and is the head of household.

She strived to make ends meet while providing in-home care for her elderly mother and now is stable housing that she owns.

Last story, I know this is a little long, but I want to share these stories with you.

There was a family of four that moved in to the shipyard.

They were longtime residents of Baby Hunters Point already.

They purchased a two-bedroom home for their growing family.

They have two young children under the age of six.

One of the parents works as an administrative assistant at an insurance company, and the other is a coordinator at a local hotel.

The purchase allowed them to get a home big enough for their growing family and stay within the community.

We highlight these stories of our residents.

We want to understand and elevate their stories and their needs because it helps us do our job better.

Next slide.

So what are we planning for this fiscal year?

This slide shows our areas of focus in fiscal 26-27 and the proposed overall budget of approximately $665 million.

In Mission Bay, we'll be completing parks and infrastructure, stormwater infrastructure along the Mission Creek Park near the Fourth Street Bridge.

Designs for new parks adjacent to the new Mission Bay School, and pedestrian-friendly walking areas near the recently completed affordable housing along Terry Francois Boulevard.

We're completing the permitting of the under ramp park, the three-block long park that'll activate and enliven the downtown areas of San Francisco underneath the Trans Bay Joint Powers Authority overhead bus ramps.

And portions of the shipyard housing are complete, and OCIA is working to close out the remaining infrastructure and parks and transfer them to the city.

We're going to continue construction and infrastructure permitting to start construction on infrastructure in the third quarter of this year and to support approximately 675 units of housing in a million square feet of commercial space in Kindlestick, and we're going to extend special gratitude to the District 10 office and Supervisor Walton for his work on the final map there.

And in affordable housing in Trans Bay at the corner of Falsterman, Maine.

We'll close out construction financing and leasing of just over 300 units of housing.

Also in Trans Bay at the corner of Howard and Beale Streets, we'll continue the design of approximately 300 units of affordable housing.

In Mission Bay, we'll continue planning for affordable housing of approximately 250 units along Channel Street, 400 units on Third Street across from the police headquarters, and finalized sales of 150 affordable units along Terry Francois Boulevard near Chase Center.

In the shipyard, we'll close out financing and asset transfer to the mayor's housing, mayor's office of housing and community development per state law.

That's 180 units across three sites at the shipyard.

And we'll continue the planning for construction on 300 affordable units at Candlestick.

Here you'll see our overall budget of approximately 665 million.

Over 70% of our budget is direct spending on affordable housing, parks, or infrastructure.

Half of our budget is on affordable housing, about 24% of our budget is on infrastructure, and about 20% of our budget is on debt service for bonds for either current or prior projects.

In the upcoming fiscal year, we're issuing new bonds in a not to exceed amount of 275 million dollars to fund affordable housing.

We also have $32 million in a tax pledge agreement with the TJPA to fund their downtown rail extension project, also called the Portal.

The vast majority of OCI's resources are directed towards project delivery.

Our operating costs are approximately 3% of our total budget, and this reflects the cost of our staffing and operations to run the agency.

Next slide.

This slide shows the sources of funds for our work program.

Over half of our work is funded through bonds or tax increment financing.

247 of the new bonds, 247 million of the new bonds will be programmed to fund affordable housing, parks, and infrastructure, and approximately 150 million dollars of new tax increment in the budget is mostly for debt service, again on bonds for current projects or past projects.

The majority of our budget reflects multi-year affordable housing loans and infrastructure projects.

Next slide.

Next.

Next slide.

OCAI is not simply working on housing.

We're helping to build sustainable and livable neighborhoods with parks, transportation improvements, utilities, and public spaces.

These investments improve the quality of life in neighborhoods while creating conditions necessary for future housing and commercial growth.

Infrastructure investments underway in Mission Bay, Trans Bay and Candlestick will help unlock future housing production and private investment throughout the city.

One of the key outcomes of our work is community and economic development.

We have an equal opportunity program that has goals of 50% for small business enterprise contracting and 50% for local hiring.

Since 2012, OCAI has administered contracts on our projects totaling 1.1 billion dollars in contracts.

This went to San Francisco small businesses.

Those contracts resulted in nearly 60,000 jobs, with over 170 million dollars in wages going into the pockets of San Francisco residents.

This overall economic development strategy works synergistically to create affordable housing so that folks can stay in San Francisco and build community here, but also give folks access to business and work opportunities so that they can live any place they'd like in the city.

Next slide.

The committee also requested our organizational chart.

You'll see we have a project management team as well as an affordable housing team, a finance and administration team that works in our bond portfolio and accounting administration as well as human resources.

This reflects our overall workforce needed to support our redevelopment work across our three major project areas.

Next slide.

We have 54 full-time staff is authorized in our agency, but only 40 of those positions are filled.

Our vacancies are not funded, but rather they're being held for future needs as we undertake our development projects.

The column on the left shows our vacancies.

And we have a 3% staff attrition rate.

Next slide, please.

OCII recognizes the city's fiscal challenges.

Our projects follow Mayor Lurie's and this board's priorities for affordable housing production and economic recovery, as well as the leveraging of public-private partnerships and the effective use of public funds.

OCII's funding sources are primarily bond proceeds with about 25% of our annual budget funded by redevelopment property tax increment generated in OCII's current and former redevelopment project areas.

Our budget is reviewed, approved, and audited by the State Department of Finance, and also monitored by the city's controller's office.

OCII is not a general fund department, but the board must approve our budget in accordance with the board's 2012 ordinance on this matter.

OCII's expenditures, expenditures are funding mandatory costs, which are primarily debt service, affordable housing loans, and retiree health care and pension costs.

Most funding is not discretionary, and OCI works with the controller twice a year to review and adjust the use of tax increment.

We worked closely with the mayor's budget office and the controller to refine and reduce our new bond payment estimate from 14 million dollars to 10.8 million dollars.

And we're also working to create additional savings by reducing new bond debt service by nearly one million dollars through bond refinancing, which will lower costs as well.

We'll continue to pursue savings where possible, contribute to the city's economic recovery.

As San Francisco focuses on housing production, economic recovery, and responsible stewardship of public resources.

We continue to be an implementation agency delivering those outcomes on the ground through fiscal discipline, leveraging of public-private partnerships, and state authorized financing.

Our work turns long-term plans on housing, parks, and jobs to economic opportunity for the benefit of all San Franciscans.

Thank you.

Thank you, and Vice Chair Dorsey.

Thank you, Chair Chan.

Thank you, Thor, for everything that your agency is doing.

I know there's a lot of excitement in the Trans Bay Area and Mission Bay.

Um I have a question on slide eight, um, just because this is something that I think would be helpful for for me to know and also some of the residents.

It looks like there's a section of the pie that is infrastructure and other non-housing.

Is that I assume much of that is parks, but is there a way to sort of get a breakout?

It doesn't have to be now.

But I would love to see the um parks and open spaces, commercial spaces.

I assume this is sort of a catch-all for all of everything non-housing.

Is parks in there?

Thank you, Supervisor Dorsey.

Uh, absolutely, you're correct, it is a catch-all.

It's uh the source of financing uh sort of creates that that broader character category, but we can supply the committee a breakout of the infrastructure projects and the park projects as sort of separate line items.

That'd be great.

Thanks.

Thank you.

Uh thank you always.

Uh thank you so much for your work.

I think it's important.

I can't.

I look forward to seeing candlestick um moving forward.

Um, I do hope that whatever it is that the city and counter of San Francisco can do to support to make sure that we um help you move into phases of development uh sooner rather than later.

Uh, we look forward to it.

And so with that, let's go to public comment on these two items.

Yes, we're opening public comment on these item numbers three and four.

If we have any members of the public who wish to address this committee Madam Chair we have no speakers seeing no public comments public comment is now close once again I think this is uh very critical work and uh we'll like to move these two items to full board yes to full board with rec recommendation second by vice chair dorsey and a roll call please and on that motion by Chair Chan seconded by Vice Chair Dorsey to forward both resolutions to the full board with recommendation Vice Chair Dorsey Dorsey I member slaughter solder I member Walton Walton I member Mandelman oh sorry uh who's absent Chair Chan I Chan I we have four eyes the motion passes thank you and with that Mr.

Clerk please call items five through ten together yes item numbers five through ten are items as it relates to this committee's consideration or the mayor's proposed budget for the departments of the city and county of San Francisco for fiscal years 2026 to 2027 and 2027 to 2028.

Item numbers five and eight are our hearings to consider the mayor's proposed interim and proposed budgets item numbers six and nine are the proposed interim and proposed budget and appropriation ordinances respectively appropriating all estimated receipts and all estimated expenditures for departments in deciding county as of May 30th 2026 and item number seven and 10 are the proposed interim and proposed annual sale salary ordinance enumerating positions in the respective AAOs for the fiscal years ending June 30th 2027 and June 30th 2028 continuing creating or establishing these positions enumerating and including therein all positions created by charter or state law for which compensations are paid from the city and county funds and appropriated in the AAO authorizing appointments or continuation of appointments there too specifying in fixing the compensations and work schedules thereof and authorizing appointments to temporary positions and fixing compensations.

Madam Chair thank you and today we have uh mayor's budget director Sophia Kittler here members of the committee Chair Chan thank you so much for having us um my name is Sophia Kittler I am the mayor's budget director um I'm going to give what I'm I will probably talk too fast but I'm going to try and keep it as short as possible to frame up um this budget uh these slides that you have um have the wrong fiscal years on them I will update them but this is the um the mayor's proposed budget for fiscal 27 and fiscal twenty eight um very quickly high level I know that the controller mentioned this already um the proposed budget is sixteen point nine billion dollars in year one growing to 17.2 in year two and balances a 643 million dollar deficit as of the March update um we did this through a few ways um one was uh looking at positions and and thinking about how we can eliminate um per reduce our personnel spending across the board we eliminate around 550 positions in fiscal 27 and then again as the controller mentioned we haven't assumed 80 million dollars of lower personnel spending in year two that has yet to be identified um we will be going through a reorganization process we are happy to keep you apprised as we work through that we also reduce grants and contract spending by about 75 million dollars that is a portion of which is um CBO grants that I think we've had a lot of discussions about in this chamber um as well as uh reducing assumptions around how our contracts continue to grow um thinking about how we can can renegotiate some of our tech contracts thinking through pieces like that um to reduce our operational spending outside of personnel um this budget is going to require continued hiring discipline we were um very pleased that we could not we could kind of stave off um additional layoffs through the introduction of the budget, but but um we are continue to be in in a very tight fiscal situation um as the controller mentioned and and the mayor's budget office will continue to work on a very slow hiring timeline if we are to continue to um to to meet these personnel targets um the growth drivers for the budget are wage increases um which are around three point three to four percent depending on kind of which bargaining units we are talking about.

Health rates are actually growing faster than we had originally projected.

They will be growing at around 10.5% in this budget, above the nine and a half rate that we had previously discussed.

Baselines and set-aside growth make up around 1.5 million dollars of our spending and will continue to drive the deficit upwards through year five.

And then one thing that we did is we that we are very pleased about is we've increased our capital investment, kind of reversing a trend of years of underinvestment in deferred maintenance and capital.

And so we have uh outs beyond what was assumed in the deficit, we have made a significant investment in our capital budget.

Um I'm gonna spend a lot of time on this slide.

Uh the primary goal that we were trying to achieve in this budget was to preserve the social safety net.

Um last year we had made around one third a progress of about a third of our structural deficit, and just to get hit by HR one, which took around 220 to 250 million dollars out of our operating revenue assumptions.

Um HR1 decreases access to benefits by increasing the frequency of eligibility checks by um imposing stricter enforcement on workforce requirements such that people who used to get waivers will no longer be getting those waivers are now are expected to put in a certain number of hours working every week if they are to receive benefits and be eligible for Medi-Cal, and then limits new enrollment or or re-enrollment for what they call unsatisfactory immigration status.

Um, this affects, we think around 25% of our Medi-Cal enrollees.

We have 200,000 people relying on Medi-Cal in San Francisco for their health benefits, and this is around 25% of those people would be affected by the latter two, and eligibility checks affects everybody.

Um, so we believe that HR1 could reduce benefits for as many as 40 to 50,000 individuals and could lead to a revenue loss of as much as 250 million dollars for the city.

Um, so one thing that we did in this budget, well, we did two things in this budget.

First, um we were one of our premises was to, for lack of a better term, spread the pain.

Um, we did not want to take all of that revenue loss out of the two departments where it would have hit, that is the Department of Public Health and the Human Services Agency.

Instead, we wanted to backfill that with general fund and treat it as a citywide deficit.

And so you will see harsher cuts across all of departments in order to make up for people's health access.

And so what we accomplished with that is a benefits access.

People will continue to be connected to CalFresh as we spend more money on keeping people enrolled.

Um, people will hopefully continue to have access to health care both through medical eligibility and when they show up in our health care system, um, making sure that we can continue to provide them care whether they have medical enrollment or not.

Um, and then housing stability, I think, is is a big one for us given some of the risks in the more recent president's reconciliation bill looking at potential cuts to the continuum of care, continue potential cuts to emergency housing vouchers.

There is a lot of risk to keeping people housed, and that is a huge priority for this budget and for this mayor, and I know for the city as a whole.

Um we leverage 38 million dollars of the Federal Risk Reserve to uh to fund increased eligibility and workforce case management at HSA, and that will help us achieve both the benefits access and the health care access.

And that was a kind of our driving principle in creating this whole budget.

Um, another really kind of big highlight of this budget and and something that um kind of makes a an awkward narrative, but something we're really proud of, is um despite this deficit, we actually have a lot of money in our city, our home.

Um we have seen a significant increase in expected revenues, which also creates a significant fund balance of money that we can spend down, and so this budget leverages both that higher props C revenue as well as 200 million dollars in fund balance over the two years to achieve four goals for us.

The first is strengthening the system.

Um we have seen that we have kind of historically underinvested in a lot of the providers that we have that have been doing a lot of our really tough homelessness work, for example, we have very uneven reimbursement rates in our shelters and our permanent supportive housing.

We are going through a process of moving towards a reprocurement for all of that.

And we believe we need a stopgap measure to make sure that people can be paid fairly while we are going through that reprocurement.

So that is a big use of one-time dollars in particular in the housing budget.

Secondly, we are looking at some of our buildings and whether they are being used in the best way.

For example, where we have a number of people living in buildings that have one bathroom for every 20 rooms.

Those are better as shelter than as permanent housing.

We're trying to think about how we can reposition those, how we can do that without anybody losing their housing, how we can move on an appropriate timeline to get everybody into the best place for them.

We are investing in helping all of our providers bill out Medi-Cal infrastructure.

We are investing in workforce safety to make sure that the people working in these sites are protected.

Secondly, we are moving Tay and families out of homelessness faster.

We saw that the point in time count was made really great progress towards reducing unsheltered homelessness, but we did see an uptick in family and Tay homelessness.

And that's something we really want to nip in the bud.

We have increased shallow subsidies for families in Tay.

We are doing a massive expansion in our prevention work.

We are accelerating family exits out of our SROs by 50%.

And we are increasing emergency hotel vouchers to help people move out of their cars, help people in at risk of gender-based violence, kind of getting people into a safe place as quickly as possible and onto a path to stability.

We are expanding our connecting our connections for individuals to treatment, trying to figure out how we can get people into the right bed at the right time and then create a path towards towards recovery.

This includes residential step down beds, expanded restore for residential addiction treatment, long-acting injectables access to improve recovery from a medicated medically assisted lens, and then expanding the moving on initiative to help people who are living in permanent supportive housing but no longer need the intense wraparound case management into a kind of like a more flexible environment for them.

And then finally, we established a $98 million revenue risk to respond to those federal funds.

We talked about this on the last slide, but setting aside making sure that we have money to make sure that everybody stays housed.

Another of the mayor's priorities in this was clean and safe streets.

And I want to really emphasize that one thing we've talked a lot about in the mayor's office is what is public safety and for whom.

And I think we kind of define it as making sure that everybody feels safe in their community no matter what.

And so some for some people that means more law enforcement.

For some people, it does not mean more law enforcement, and thinking about how we can re-envision the entire community process to keep people in their neighborhoods.

So this budget reenvisions the street violent prevention initiatives that had previously worked through the Department of Public Health, bringing those in-house as a combined initiative between DCYF and adult probation.

It backfills state grants for justice involved youth to make sure that people exiting the justice system have a path to a like a stable and prosperous life.

It roots the neighborhood street response team and data-driven and treatment-based care through DPH, moving that out of the law enforcement branch at DEM, and then significantly expands staffing for law enforcement accountability through the Department of Police Accountability.

On street cleaning, we have maintained funding for street cleaning and trying to start look at some data-driven initiatives on how to get further with those dollars, kind of thinking about rerouting trucks and changing how we do pickups so that we can get more for our money there.

And then finally, on law enforcement, the two things that I really want to note are first, we fully fund the MOUs that were negotiated through the police department and the fire departments, and that we really want to thank DHR for their partnership there.

And as well as creating a bridge between law enforcement and the Department of Public Health through the Reset Center through our first performance-based contract in the city, which we are very excited about.

I will not go into detail here, but we make a huge investment in capital in this budget, more than doubling what was assumed in the deficit, expanding ADA accessibility packages, security across all of our, not all, but many of our campuses, making sure that we are maintaining our PCI score for street resurfacing at 75, funding emergency power in a number of our buildings, and then investing in life safety like seismic repairs, fire alarm suppression, things of that nature.

Fleet technology and equipment, we've tried to take a really data-driven approach this year and kind of looking at the total cost of ownership, thinking about where we are spending more money on maintaining vehicles or spending more money in kind of upkeeping old technology systems rather than kind of investing in a new thing that might save us money in the long term.

So an upfront investments for a longer-term savings.

Um that shows up in our fleet with uh replacing 20-year-old fire rigs, patrol cars, transport vehicles at the sheriff, old vehicles at DPW, thinking about technology through the coit budget on building a unified data platform, a new HR modernization, thinking about a responsible use of AI and kind of really beefing up some of our translation services, which I think we've had some struggles with in the past, and then looking at payroll and scheduling software to kind of think about how we can better manage our overtime across the board, particularly in our public safety departments.

Um, and then finally on equipment, uh identifying equipment that that protects our workers, protects service outcomes, and helps us again save money in the long run.

Everything from PFAS free turnout codes at um SFFD to weapons detection at Zuckerberg Hospital.

Um that is a very brief run through and frame-up of the budget.

Um you're going to hear from a number of departments over the next three days.

Um I really want to thank each of the departments and uh the department heads, their CFOs and their staff for for what was um a grueling budget process, and it feels like these budget processes never end, and and this year will be no exception.

We have to keep going.

Um but it's been a really important working relationship, and I really want to thank everybody for working so hard.

I also really want to thank the mayor's budget office, um, Jack English, Matthew Puckett, Eliza Pugh, Santiago Silva, uh Tabitha Romero, Joshua Carlinas, and Louisa Coy, and and Daniel Collie, I'm praying I did not forget anybody, but I'm pretty sure I did not.

Um they have worked tremendously hard this year, and I am um really proud of what we've been able to accomplish with this budget and um appreciate your partnership and happy to take questions.

Sorry for talking so fast.

I don't see any name on the roster, so colleagues, I think what we're gonna do is we're gonna now dive into the city department um budget presentation and the first up uh we have our elected office uh and it's our assessor recorder, Joaquin Torres.

Thank you so much.

Great.

Thank you so much, Supervisor uh Cher Chan, Vice Chair Dorsey, uh President Um Mandelman in Absentia, but Supervisor Sauter and Walton.

We're just gonna get this set up for us uh right now.

Thank you very much for the opportunity to present our proposed budget uh today.

All right, next slide, please.

Uh our mission uh is to fairly and accurately assess uh all taxable property in San Francisco and to secure record and provide access to property and other records.

Uh Joaquin Torres, your assessor recorder here in San Francisco.

To address Cher Chan's question about how we respond to the mayor's budget instructions, we've provided each of you uh with a handout that lists our functions with the administrative infrastructure of our office under operations and our program divisions listed under legally mandated.

Our functions and responsibilities are clearly defined in the California Constitution and the Revenue and Taxation Code.

We do not uh possess discretionary programs.

Our work directly supports the city's revenue base through fair and accurate assessments, legal compliance, and public access to records.

We have implemented efficiencies, we've modernized our work over the past few years, but even with those continuous improvements, currently and for at least the next next two fiscal years.

Every position here is necessary and worthwhile in the public's interest.

Every member of our staff is an essential part of performing these vital duties, and I'll be happy to answer more questions about this after the presentation.

My focus today is primarily on our department's budget, but I also want to speak to the importance of our community engagement work.

We serve over 51,000 people annually, and that includes in-person, on the phone, online, and through our community portals.

At the same time, we've seen more in-person attendance at community events than ever before, including signature programs like our annual family wealth conference, estate plan programs that are provided without city cost, and other monthly meetings where we engage directly with San Franciscans.

This reflects the ongoing demand for information that people are requesting and need on financial empowerment, property assessment, recording services, as well as changes that have been occurring in state law that affect their bottom lines and their need for accessible, responsive service delivery.

Next slide, please.

As I've been discussing with many of you, we continue to work through a period of historically high assessment appeals that are driven by ongoing adjustments in San Francisco's real estate market due to the pandemic.

At the same time, reassessment activity has remained fairly consistently high.

Despite these pressures, the city's assessment role grew by 1.9% in the most recent year, reaching about $357.8 billion in assessed value and generating approximately $4.2 billion in property tax revenue.

Our budget is $42.3 million, and that represents about 1% only of the total revenue that we bring in.

In addition to our property assessment duties, we proactively audit transfer taxes to ensure that everyone is paying their fair share.

And this year, our office's transfer tax audits have brought in, as you can see here, $9.5 million in revenue.

We focus on efficiency, we budget precisely, we manage our resources accordingly.

This year we are on track to spend 99% of our general fund budget that leaves very little on the table at your end.

Next slide, please.

Our proposed budget that you can see here for fiscal year 26-27 is $43.3 million.

It's about $900,000.

The following year, for fiscal year 27-28, the budget grows to 45.1 million dollars, and that represents a 4% over the first year.

Primarily, this is based on salaries and fringe benefits.

On the revenue side, the recording fees we collect are the primary driver of revenue growth, increasing 47% over the current year, while general fund support grows by 1%.

In terms of expenditures, as I just mentioned, salaries and mandatory fringe benefits make up the bulk of our budget at 83%.

Non-personnel services grow primarily to cover the cost of those data subscriptions and software licenses that are needed for our appraisers to inform their appraisal work.

Next slide, please.

Based on our research, that is a ratio that is comparable to other assessors' offices, with where those ratios range from about one to six to one to ten.

So our one to eleven ratio is standard for an office with the specialized functions that we have, or oversight and compliance are critical.

Overall, the budgeted positions remain stable and all are vital to successfully manage existing workloads, all of which we find to be in the city's interest.

I want to point out, though, that with our in-progress hiring, we will have a hundred and ninety people on staff by the end of this fiscal year, yet this budget only provides funding for 183 operating positions.

This means that we are going to have to continue to carefully manage our hiring plan by delaying some hiring or selectively pausing backfills.

That's not a new activity for us.

We carefully manage our hiring plan each year, but it does place some new external constraints on us during one of our office's most challenging periods.

In my opinion, the city would be best served by budgeting our office so that we can continue to have the flexibility necessary to backfill as quickly as possible, in line with last year's policy decision that you made to add positions to our budget.

Next slide, please.

So here you can see the challenge that we faced.

This is very similar to what we shared with you last year, unfortunately.

The assessment appeals continue to be our most pressing challenge.

This is our third consecutive year of record breaking appeals filings.

You can see on the chart that our past pandemic average is almost five times higher than the height even of the Great Recession.

This is also an eightfold increase over pre-pandemic years, and at the time the surge began, we were not staffed to meet this challenge.

These appeals represent hundreds of millions of dollars in property value under dispute, and these are cases that must be resolved within two years unless a waiver is granted.

When waivers are granted, taxpayers also still retain the right to revoke the waiver, and appeals must be promptly scheduled.

It is vital to the city's interest that we successfully manage this appeals surge, that we work every appeal, and that we do so timely and in accordance with the law.

Next slide, please.

Now this slide shows a fuller picture of our appeals on the left hand side.

On the right, you see what we call reassessments.

Those are changes in ownership and new construction that we value.

These two workloads are handled by our appraisers.

When appeals spiked and reassessments remained constant, we had to make some hard choices.

What work gets done first?

What work will be delayed.

Over the past two years, we prioritize working all scheduled appeals in partnership with our colleagues at the assessment appeals board.

This focus has enabled us to close significantly more appeals, which you can see on the slide here.

But unfortunately, that has also meant slowing the rate at which we complete reassessments.

And so production as a result has dropped in fiscal year 24-25.

With the changes already underway and the additional appraiser positions you approved last year, we have begun to turn this around.

We continue to increase the number of resolved appeals, and we are completing significantly more reassessments.

We've closed over 11,000 reassessments through the end of May.

We expect to reach over 12,500 by the middle of this month when we close our assessment role.

This is nearly three times the amount that we did last year.

But despite this growing success, we still have elevated workloads that continue, and we're going to open up this fiscal year of 26 27 with 10,000 open appeals and roughly 18,000 open reassessments.

Any delay in working those reassessments only creates further property tax revenue deferrals to the city and increases frustration for taxpayers who get billed more than one year property taxes all at once as we continue to work and catch up on our backlog.

Next slide, please.

What I hope that you take away from this presentation, supervisors, is that we've been deeply responsive to this moment, of course, in partnership with you and your investments in our office.

With your continued support and with the collaboration, of course, with the mayor's office, the controller, the treasurer and tax collector, city attorney, clerk of the board, I know will continue to successfully meet this challenge for the good of our city.

I very much want to thank, of course, the mayor's office, controller's office, city attorney's office, but of course our budget team, Simon Jacques, Emily Alt, Eric Chan, Jennifer Roman, and our deputy assessor of operations, Juan Carlos Cancino.

Um thank you for your time for your consideration.

I'm uh here to answer any questions you may have.

Thank you, Assessor Torres and Supervisor Sauter.

Thank you, and thank you for the presentation.

Can you speak a little bit more about the uh the proactive audits?

You know, is there is there more that you could be doing there in terms of um and maybe you don't want to reveal but what percentage of audits you actually um what percentage of transactions you audit.

I'm just curious about that program.

Sure, this is a reflection, and thank you for the question, supervisor.

This is a reflection of our partnership with the state and the Board of Equalization, where we're coordinating on making sure that when there are transactions in the open market specifically, uh, with legal entity uh uh ownership uh entities, that we are capturing that value in a timely manner through coordination uh with the state.

Uh we've seen uh a doubling of that amount uh from last year.

I want to say it was about $4.5 million, very specifically for these types of transactions to the number that I shared uh earlier of 9.5 million.

Um it is a matter of what is coming in and how uh uh how both uh um foot forward we are in making sure that we continue those dialogues and capture that value as appropriate to ensure that those legal entities are also paying their fair share.

Fair and accurate, but fair share.

Thank you.

I don't have any other question.

Thank you so much, Assessor Torres.

Thank you so much for your lean and but mighty team for the work that they do generating billions of dollars of property tax for the city.

So we so appreciate you.

Thank you very much.

We just want to remind you that we are like the players that Hamlet is looking for.

We were discretion is our tutor.

That's why we spend so efficiently, budget so effectively, and also suiting our words to action that I hope that you've seen here in the presentation.

So thank you all very, very much.

We look forward to any continued conversation you may want to have.

Thank you.

Thank you so much for your work.

And so with that, we will have our treasure here.

Thank you.

Good morning, Chair Chan.

Good morning, supervisors.

I'm Jose Cisneros.

I'm joined here with my colleague Amanda Freed.

I first want to thank our MBO budget analyst Matthew and our budget analyst Rashi.

And of course, I want to acknowledge our own budget team, Jeff Chester and Shuzen.

I'm sure you're all aware our mission is to collect and safeguard the city's money and to use our expertise to help low-income San Franciscan families to build economic security and mobility.

Today we'll walk through our core operational services and how we keep the city running.

These are the citywide financial functions that are the backbone of how San Francisco collects revenue, manages money, and pays its bills.

Every year we collect over seven billion dollars in tax and fee revenue for the city, roughly half the entire city budget.

Police, fire, housing, schools, parks, all of it depends in part on the revenue we collect.

We use advanced online platforms that support timely filing and payment for 99,000 registered businesses.

We reach taxpayers through multiple communications channels, which leads to over 16 million online transactions being processed.

Implementing Proposition M, the business tax overhaul passed by voters in 2024, defined much of our last year.

We built the infrastructure for a single simplified combined filing under one deadline and delivered it on time.

March 2026 this year was the first major filing deadline under the new unified structure.

Full Prop M revenue data will follow when extension filers who are often larger businesses complete their filings at the end of November.

For small businesses, Prop M meant real relief.

We eliminated 10 million dollars in regulatory license fees.

For example, a mid-sized restaurant that used to pay over $1,400 a year in fees, now keeps that money.

And the city's first advanced written determination program, giving businesses binding answers to their tax questions.

Certainty for businesses matters when the rules are new.

In addition to our regular tax collection work, our office is responsible for ensuring that every taxpayer pays what they owe.

The vast majority of businesses follow the rules.

Our job is to make sure that everyone else does too.

We lead two distinct but essential functions to address that delinquent collections and audits.

Through our audit team, we focus on accuracy, verifying that those who do file are reporting the correct amounts under the law.

In the past year, our audits resulted in the collection of 206 million dollars in prior year tax liabilities, including penalties, interest, and fees.

Our Bureau of Delinquent Revenue focuses on non-filers and non-payers, making sure every business that is required to register, file and pay actually does.

Last year we collected 146 million in delinquent taxes.

We also support departments across the city, including the MTA, hospitals, FIRE, and the rent board, helping them recover delinquent payments and strengthen their own billing and collection practices.

We approach every delinquent case with ethics, fairness, and accountability, which is why it is critical that this work be done by city employees rather than private debt collectors.

Our treasury and banking services are the financial backbone of city government.

When a park gets funded, a vendor gets paid, or a resident receives a refund, our team helps make that happen.

This year we processed $4.1 billion in online citywide transactions, and we managed a $19 billion pool investment fund.

Now our economic justice center is where our financial expertise meets the daily lives of San Franciscans who need it most.

In flagship programs like kindergarten to college and the financial counseling project, we use the same financial systems and infrastructure that power our daily operations to remove barriers and open doors for low-income residents and communities of color.

And we keep innovating based on the needs of the community.

Stop Scams SF, our newest initiative that launches soon will help us scam proof city government and protect vulnerable San Franciscans from the financial fraud and scams that increasingly target seniors, young people, and immigrants.

The large vehicle buyback program shows what it looks like when city financial expertise goes to work directly for low-income residents.

Our office helped the mayor's office and HSH research and design a large vehicle buyback program that integrates a two-part financial payment with municipal debt relief and financial counseling.

We know how to collect debt at TTX, and we also understand that sometimes clearing debt is the most effective outcome for the city and transfer major.

So far, we've helped large vehicle buyback participants eliminate $95,000 in city citywide debt and connected them to one-on-one financial counseling to help them open bank accounts and build the credit they need for housing and employment.

We look forward to expanding these services in partnership with the mayor's office and HSH next year.

Our proposed budget for fiscal year 27 is approximately $50 million, with half coming from the general fund and the other half coming from departmental generated income.

This was a year that required difficult and deliberate choices.

We were given a general fund reduction target of $1.2 million, which we met through a combination of increased revenue recoveries, through charges for services, and targeted position eliminations, including one filled role and two vacant positions.

We implemented the first phase of a budget neutral reorganization to maximize accountability and transparency, and our fiscal year 2627 budget includes additional cost neutral substitutions to complete this work.

I do want to note that one existing manager three position for our in progress reorganization that we included in our base budget was eliminated.

We understand this is a very challenging year, but we're hopeful that we can get this restored with your support.

Our departmental staffing tells a clear story.

We have done more with less consistently over many years.

From 207 at the time funded positions in fiscal year twenty-three.

We're now down to one hundred and seventy-eight in the upcoming year, a significant reduction while our workload has grown substantially.

During the same year, we implemented multiple new taxes and the largest business tax overhaul in a generation.

And we increased collection by collections by hundreds of millions of dollars.

This does not happen by accident.

It reflects deliberate restructuring, careful planning, and a commitment to running an efficient operation.

I am also concerned as we look ahead to a one million dollar attrition saving target in the second year 27-28.

With several new tax measures again on the horizon, we are not in a position to reduce further without actually impacting revenue collection.

Now this work chart reflects our departmental following a thoughtful reorganization designed to align our teams with core functions.

We are now organized with four direct reports to my office: the chief assistant treasurer, the tax collector, the chief of people, budget, and collections, and the chief of operations and systems.

We have a total of 178 budgeted and funded positions.

In order to meet our labor funding after attrition, we're holding 12% of total positions in the budget vacant, with 85% of our positions are filled, and 3% are actively in the hiring process.

Our management to staff ratio is 21 managers to 157 non-management staff, 12% management overall.

This is consistent with the work of our department, which is specialized and complex.

And a full position list is available as a supplementary document.

With that, I'll conclude and be open to any questions.

Thank you.

Vice Chair Dorsey.

Thank you, Chair Chan.

So I noticed that there was an increase in delinquent collections and audit recoveries.

Is that due to improved enforcement or worsening noncompliance?

Hi, I'm Jess Michael, the Chief of People Budgeting Collections.

So, yes, we we received increased assignments as well as when I say assignments, we get assignments for debts from other departments.

So when we receive those increased assignments, we've had very effective results on those collections.

We've also changed some of our enforcements, a lot of that with the businesses on for suppliers and holds on supplier holds.

So whenever, and that means that whenever we are going to be sending out monies to those vendors or to those suppliers, and they owe debts to the city, we place those on hold, and that has been very effective in being able to recover on those obligations.

Okay.

Thank you.

Thank you, Treasurer.

Thank you very much.

Thank you for your time.

Thank you so much for being here.

Thank you so much for your work.

And so with that, we're going to go to the Department of Technology.

Good morning, Chair Chan and members of the committee.

I'm Mike Maxman, the city CIO.

Thank you for the opportunity to present our budget today.

We will aim to keep our presentation to the mandated five minutes.

Our submitted budget meets and exceeds the mayor's budget office reduction target.

We reached that mark by reducing administrative and operational costs, rent, telecommunications, and software licensing.

We focus on protecting the frontline technology services that city departments and residents depend on.

Before our CFO walks you through the numbers, I want to answer Chair Chan's question about our core programs.

My answer is direct every program in our budget is core to the city's ability to operate.

Email keeps 30,000 city employees communicating.

Our network connects every city facility, every police station, and every fire station.

None of these functions are discretionary.

Each one is a building block.

The city needs to deliver services effectively and efficiently.

Next slide.

The Department of Technology runs the shared technology foundation that the city departments rely on.

And our work comes down to four major commitments.

We're making the city systems more resilient, modernizing infrastructure so the services people count on stay reliable even during a disruption.

We're keeping the city's cyber safe, defending our data and systems around the clock.

We're innovating responsibly, putting YAI and new tools to work to make government more effective.

And we're closing the digital divide.

Our fiber to housing program brings high speed free internet access to more than 24,000 families in low-income households at affordable and public housing.

Did you certainly structure is streamlined and lightweight?

Our divisions provide services that departments in Francisco rely on every day.

Our radio network keeps police officers and firefighters connected during emergencies.

Our cybersecurity network teams keep city data secure in every facility online.

Fiber to housing, what I just mentioned connects thousands of low-income households.

And RS of Gov TV broadcasts proceedings like this one so that residents can see their government at work.

I will now turn my presentation over to our chief financial officer, Len Benvenuti to present our budget.

Thank you.

Good morning, Chair Chan, members of the committee.

My name is Lileen Benvenuti, and I am the Chief Financial Officer for the Department of Technology.

Um before I delve in, I just wanted to take a moment to um to acknowledge the budget and legislative analysts office as well as the mayor's budget office for their work in reviewing our department budget.

So next, oh okay.

Um this first slide is our budget overview.

As you can see for FY26-27, the total submitted budget is 172.5 million dollars, 174.5 for FY28.

However, a significant significant portion of that funding supports pass-through costs for departments, capital projects, and other citywide programs.

After accounting for these non-operating components, the department's net operating budget submitted for FY27 is approximately $100 million and $102 million for FY28.

The increases for the two years are primarily due to contractual and compliance costs, including CalCAP.

Although the department has worked very diligently to contain costs through strategic negotiations, targeted budget reductions, rising crop rising costs across the board continue to put pressure on our budget.

Next slide.

This next slide shows the composition of our budget.

As you can see, the largest slice on the expenditure supports client departments past through activities, including IT projects, enterprise license agreements, and other consumption-based costs, such as public cloud.

The other large categories support personnel and critical technology infrastructure, which together enable the delivery of reliable technology service across the city.

Investments in infrastructure and cybersecurity remain particularly important as the city continues to modernize systems and address evolving security threats.

Next slide.

So with regard to staffing, the department has budgeted 245.2 FTEs in 27.

This reflects the elimination of 23 positions, 10 funded and 13 unfunded, as part of the city city's budget balancing efforts.

Despite these reductions, the department continues to support a broad range of essential services, including public safety systems, cybersecurity operations, and citywide networking.

And finally, next slide.

And finally, this slide, I would like to highlight the actions that our departments that our department has taken to meet the mayor's budget office reduction targets.

Through a combination of operational efficiencies, cost-saving measures, and strategic use of fund balance, revenue offsets, and position reductions, the department has identified 17.5 million dollars in reductions in FY27 and approximately 22.5 million dollars in FY28.

These reductions include savings and telecommunications, software licensing, facility costs, network operations, and other administrative efficiencies.

While these measures have required difficult decisions, the department has worked to mitigate impacts on core technology services and maintain reliability, security, and availability of the systems that support city operations.

In summary, the department's proposed budget reflects a careful balance between achieving significant budget reductions and sustaining the critical technology services upon which city departments depend on.

That's it for my presentation.

I thank you.

Thank you.

Thank you, Chair Chan.

I um do want to say I appreciate the work that is probably unsung too often about the work you do on cybersecurity.

And every time I read about I think most recently it was Foster City or Oakland.

I know that there's a lot of challenges that municipalities face when it comes to cybersecurity.

So good work that that's not an issue.

Um two things.

One I wanted to ask do we have a timeline on um, it's my understanding that there is a state law that local governments are supposed to be moving to top-level domains, so that all of our emails are going to be SF.gov.

And I assume that'll include websites and everything else, but I just wanted to get a status report on that and ask if there's going to be any costs associated with it when it happens.

Thank you, Supervisor.

Um, yes, there's a timeline.

I think the details would be best provided by digital services, which is a division within the city administrators' office.

Okay.

Um, the other thing I I noticed was there was a cost reduction for Adobe.

And I'll I it reminded me that one of the things that we heard from some of our um with the district attorney's office and the city attorney's office, and many of them have discrete contracts with Lexus Nexus and the Westlaw, a lot of the services, I assume sort of similar to this.

Um is this something that would should we be thinking about sort of bringing to bear the entire city as a le to leverage our buying power rather than having multiple city departments getting their own contracts?

I know that this was something that came up for the district attorney's office as well.

They'd like to get that cost down.

Any thoughts on that?

Yeah, supervisor.

I think um that's absolutely the right approach that the Department of Technology has taken over the last um, I'd say a decade.

Um we continue to promote the responsible use of enterprise agreements, especially when there's um significant spent on multiple departments are involved.

Um we're also engaged under the umbrella of the city administrator in our review of um multiple departments and um their use of software licenses.

Um I would say that the current um budget reductions limit our ability to take on um new enterprise agreements, but we continue to pursue that goal.

Great.

Thank you.

Um, thanks for your presentation today.

We appreciate your work.

And so with that, our next is um the Office of City Administrator.

Thank you very much.

Well, uh Katie Patricione uh sets up our presentation.

Let me just answer the questions that Supervisor Dorsey mentioned.

I had Sid Harrell here who uh who uh runs our digital services team and our state deadline for the transition of web pages is January 2028, and we're working diligently with departments across the city to try to get to that space at the moment.

Uh, in addition to that, I think you had asked uh Mike a bit about the tech stack and sort of the enterprise agreements and the opportunities that exist there.

That in fact is a body of work that we are also working on collectively across multiple departments to really understand what is the uh deck of different products that we're utilizing for different kinds of operations.

As you can imagine, with a city as large as ours with so many functions that are similar across different departments, there's real opportunity to see whether there are certain departments that could collaborate or could have and exist under existing contracts, and we believe that there are multiple benefits to that.

Not only could we potentially negotiate from a better position, a stronger position with a bigger buying power, but with not multiple contracts, we also save on the administration of different contract terms.

We also have better visibility in terms of risk across the city as well.

So that is actually an active project that we're working on.

We'll speak a little bit about.

With that, I do want to start off and just say a big thank you to the mayor's budget office and in particular Sophia Kittler and her team.

While Sophia accurately described the process as a grueling one, which I can attest that it truly was a growing one, we also appreciate the difficult work that you have to do to help to bring the budget to balance and want to thank you for working with us and for listening to all of our complaints and trying to navigate through probably 70 different departments who have the same things.

I also want to thank, of course, the budget analysts in advance for working with us as well.

And I would be remiss if I didn't thank my team, not only the folks who work on the budget, but also for all of my staff day in and day out, the thousands of people who do work on everything from fleet to caring for our animals and people.

I want to thank you for your hard work.

As you know, our city's administrator's office team is a pretty diverse one, and we'll move to the first page of our presentation.

Maybe the next page.

Our goal is to deliver exceptional core services that enable city operations.

And I think as many of you know, with over 21 different departments that serve under the city administrator, we have a very, very broad range of stakeholders, anyone from an external stakeholder, members of the public to internal stakeholders, departments who depend on us in order to deliver their work.

We have basic government functions, things that you and I can imagine going into city government for, finding vital records in our county clerk's office, being engaged with the medical examiner's office, language access concerns, calling our 311 call center, as well as animal care and control, amongst many others.

In addition to that, the city administrators' office is also uniquely positioned to work on cross departmental issues and things that will really help to improve operations across the city.

Things like making sure that we do a great job of managing and repairing our city's fleet that all of our city departments depend on to respond to public safety calls, to get and clean the streets, to go and visit individuals across the city.

In addition to that, we also work very closely with many of our departments on contracting challenges that we have.

We are working to harmonize technology as Supervisor Dorsey, you mentioned earlier about some of the opportunities that are there, and we carry out much of the long-term planning work to make sure that our city's roads, our buildings, our bridges are in a state of good repair, as best we can do.

In the next three pages of our presentation, you'll see a lot of text, and unfortunately, I couldn't figure out a more graphically pleasing way to provide the information that we have with 21 different divisions.

But I thought I would just talk about and highlight perhaps verbally with you.

You have the presentation in front of you, and folks can look into it.

But I want to talk verbally about the transition that we're making in the city administrators' office.

I think as I have stepped into this role, we have been thinking a lot and reflecting a lot about what is the unique opportunity that we have in the city administrators' office.

And I think what we see is that we believe that certain things that have been viewed very much as just administrative back office functions have a real opportunity to be strategic and to be a partner in how the city delivers things.

And so everything from how it is that we buy things, what it is we buy, how we manage our vehicles, how it is that we place and have individuals served by our real estate division to how it is that we deploy technology across the city.

These are all things that ought to be more strategic and how we actually deploy them rather than just administrative functions.

There really are a lot of opportunities to do that.

In focusing in that work, we are also working very closely with the mayor's office to make sure that some of the other divisions within our office actually find homes where they will be better served, where there's better mission alignment and support for their work.

So in this upcoming year's budget, you're going to see two big changes to divisions that are going to lead the city administrator's office.

I'll just mention them briefly.

We're not touching on them today in our presentation, but you'll hear from them other departments later.

One is the transition of the grants for the arts portfolio out of the city administrators' office to a larger arts organization.

And of course, the second is the transfer of the permit center to the planning department to help to bring better alignment to a lot of the permitting functions that exist there.

So the city administrators' office will no longer have a hand in those spaces, but we're really proud of the work that our team has done to create the foundation and to support in this transition.

And of course, we'll continue to be great partners there.

And just focusing on a few of the major areas that we will be working on in the upcoming year.

One, as I mentioned earlier, is around our technology stack and our technology work.

We have as a city really viewed technology in the past as just some thing that we pay for that we just need to have, and we pay for computers and network and other things, other things.

But in fact, there really is a much more strategic approach that we should be taking to make sure that we're building a strong foundation for all of the city to work through.

The challenges we have when we don't do this is that we really have information and data that is really operating in silos.

We have systems that don't work with each other, and as a result, our city operations and our processes don't function as smoothly as they can.

And people feel this when they come into our city and they try to buy a particular, go through a permitting process, or they try to get a certain license, they often have to navigate through many different systems in order to get to a singular place.

We are really trying to work on a few things fundamentally to strengthen our city's digital footprint.

One is really investing in a unified data platform.

Right now, our data is locked up in many different systems that are old legacy systems, hard to get information, hard to have that information be understandable or usable by practitioners on the ground.

And we are creating a unified data platform in order to create a secure, reliable foundation where structured and unstructured data can come in for all of the city to use.

We're working to make sure that we're revaluating our technology stack, as I mentioned earlier, because we have opportunities across all of the 70 different functions and departments across the city to say what are we purchasing, why are we purchasing it, and could we actually be doing it in a different way?

I think Mike spoke a lot to some of the work that he's doing around digital, digital, the cybersecurity work in addition to the network piece.

So we won't talk about that in this presentation.

But in addition to that, we're also thinking very much about the work that we have about bringing a front face to San Francisco government as well.

When San Francisco San Franciscans come to visit our website, they don't make the distinction between this department or that department.

They view us as one San Francisco, and we ought to operate that way as well and make it as easy for individuals to do that.

In addition to the technology work, we're going to be having a very, very large focus on how it is that we improve contracting and purchasing.

GovOps is an entity that we or an effort that we had lifted several years ago initially to get us out of the pandemic and get us back to normal operations, but it has truly evolved to be a place where we're thinking a lot about how it is that we streamline purchasing across the city.

There is no single city department that does not have a problem with purchasing, the length of time that it takes, how onerous that process looks like, how difficult it is to get vendors in to do the work and to work alongside with our city staff.

And so we are working very much to create different avenues to be more innovative and more nimble when it comes to how it is that we're purchasing.

One of the efforts that we will be lifting and that we believe will be launching, we hope in July of this year is a try-before you buy RFQ pool to allow departments to test out in a low-risk way emerging technology tools.

We want to make sure that there's one front door in, that there is standards that we actually put in place for anyone who wants to do business with us.

It shouldn't be the wild wild west.

We have certain data and information we need to protect.

In addition to that, we want to make sure that we ease the way so that individuals don't have to replicate the same procurement process across seven, 70 different departments over and over and over again.

In addition to that, in our fleet, I think as Sophia had mentioned, we're working very much to utilize the data that we have actually installed.

Currently, about 92% of our vehicles have telematics installed in them, and that means that we can see how much fuel we're using, how much speed we're, how fast we're going, what the utilization of vehicles are.

We want to use this information to actually make sure that we're retiring vehicles that take a lot more to maintain than if we were to replace those vehicles outright.

It's a smarter way to make sure we're making the right investments across the city and right sizing our fleet so that we can do good there.

In addition to that, I think as many of you know, one of the major goals of the city has been to green our fleet, and we are diligently working towards that.

One of the biggest challenges to that is actually having electric charging stations to be able to power those vehicles.

Luckily for us, we are in the process of installing 403 grant-funded chargers in city buildings.

This we believe will meet about 50% of the charging needs for our vehicles once we get to our full goal.

So this is going to move us a very, very long part of the way there.

And in particular, with what we're seeing in the world today with rising fuel costs, this is going to be a big, big improvement to help us to manage some of those fluctuations in the marketplace that frankly we don't have any control over.

And then finally, I'll say, in terms of other citywide initiatives, we're going to be working very, very hard to continue to position real estate as a strategic partner and thinking about how it is that we deliver the city's space, not only for our workers to have good quality, safe space for people to work, but also to make sure that we're thinking about the city's kind of movement and development as a whole.

And I think I want to thank you, Supervisor Dorsey, for your sponsorship of the 1455 initiative that moves us towards that position.

Moving quickly away from some of the citywide efforts that we will be engaging with in this year, you can see it's a pretty full plate for us.

I do want to highlight a few other divisions.

We'll flow perhaps to the next page where we see contract, this is the right page for contract monitoring division.

I did want to speak a little bit about our local program for local businesses here in San Francisco.

I think, as many of you know, when we do invest in our local businesses, when we hire our local businesses to do good work for our city, they in turn oftentimes reinvest in our neighborhoods, hire people from the neighborhood, and this is actually an important concept.

This is something that we pride ourselves in in trying to make sure that we support.

Every year we have a percentage that we award to our local businesses of requirement, and it's actually putting about 500 million dollars in awarded contracts into local businesses on an annual basis.

And I think this is something that is worth really thinking about as a city as we think about kind of where our dollars go, making sure we continue to do that.

In our CMD division, a few major things have happened.

Supervisor Walton, I know this is something you have championed quite a lot during your term.

We've done a lot to make sure that LBEs are aware when projects are awarded and they actually want a bid.

Sometimes LBEs don't know it, and so when it comes time to actually getting them to do the job, they're not prepared and ready to go.

And that becomes a real big problem when the main contractor wants you to move quickly without the resources or prep time to do it.

And so we've taken on the extra step of making sure that they have that awareness early on so that they can prepare and get their teams ready and not lose that opportunity.

Second, which is a huge, huge uh win, I think because we have been working with the LBE community for a very long time on this issue, is that we have worked very closely to the credit of MOHCD to ensure that the affordable housing portfolio has local LBE goals, not just the state goals, and that's going to also be an improvement in terms of the opportunities that open up for local businesses in San Francisco.

And then finally, one other quick thing I'll say is that on the equal benefits part, Supervisor Dorsey, you mentioned this piece before.

We have really driven down our efficiency in terms of or increase our efficiency and driven down the time to process those applications.

What used to take about potentially three to ten hours to submit an application now takes 10 minutes in order to apply for the equal benefits compliance, and then our review has gone down from 30 days to same-day approvals.

So we really are making improvements that will help to I think reduce some of the barriers, both for local businesses but also for our staff time that's on these projects.

Finally, perhaps on the last page, I'll jump to.

There are many, many more success stories and many more efforts that I could speak to, but I do want to speak to the Office of Civic Engagement Immigrant Affairs for just a moment.

It is an incredibly difficult time, as you know, for many communities, including the immigrant community across the country and of course here as well.

And we want to make sure that we continue to support the community.

One of the things that will be coming up online is that we will be certifying Vietnamese as a official language that will need to be translated this coming month.

I think it's the June 23rd-ish or so, that it will be officially certified as the additional language.

One of the things that will have to happen is that we're going to be managing the implementation of that over the next year and working very closely with community partners and departments on how it is to best help to make sure that their documents, their information is also translated in a timely and appropriate way.

Not a lot of resources to do it.

We didn't have additional funding that got put into this space, but we will work across all of our existing tools, whether it's our language line, our existing contracts, our city staff to try to do the best that we can to make sure that we are meeting the needs of our immigrant communities.

And finally, I will just say that I'm going to transition it over to Katie who will walk you through the specifics of our budget, but we as a whole had a 20 million dollar reduction in both years for our budget.

In year two, we have an unidentified 4.3 million dollar additional salary cut.

There is not a place where we're cutting that yet, and we're going to have to work very quickly after this budget process is done to identify where those additional cuts will come from.

And so while this is phase one of the budget process, we know that there's hard work yet to come.

And so with that, I'll turn it over to Katie.

Thank you, Carmen.

Good morning, supervisors.

I am Katie Patruccioni, the A deputy city administrator and the CFO for the Office of the City Administrator, and as Carmen said, I will walk the committee through our proposed budget for the next two fiscal years.

The department's proposed budget for fiscal year 26-27 is $594 million.

Nearly 60% of this funding comes from city departments who pay for the services that the city administrator provides them, including fleet, contracting and facility needs.

The city administrators' budget carries the cost of property rent, debt service, and insurance for the entire city.

Only 19% of our budget is general funded, supporting staff who provide direct services such as 311 and county clerk vital documents to San Francisco residents.

Another 26% of the city administrator revenues support specific dedicated purposes, of which the largest of those are Moscone Convention Center and Treasure Island.

Roughly a third of our budget funds staff, and that includes auto mechanics, contract analysts, and custodians, among many others.

A third of our budget covers contractual services, and that includes the cost of building leases, insurance, operation of the Moscone Convention Center, and other smaller services, such as software licensing and copy machines.

14% of our budget next year pays for debt service for the past purchase of city buildings as well as improvements to Moscone.

14% covers the services that we receive from other city departments, including utilities and workers' compensation and telephone and network services, and then the remaining smaller slices of the pie fund grants for neighborhood beautification, central office costs such as accounting and human resources, and then materials and supplies.

Given the size and complexity of our department, we have 957 funded FTE.

This org chart rolls up our divisions to the city administrators' three funding sources the general fund, special revenue funds, and divisions funded through work orders.

I'd like to note that the hiring freeze over the last 18 months has had an acute effect on our staffing levels.

The hiring freeze has caused particular impacts to divisions in the general fund, and that and on positions, including things such as animal care attendants and medical examiner investigations, as well as impacts to positions in our work orders, such as contract analysts, mechanics, and stationary engineers.

These ongoing vacancies affect staff morale, and they have real operational impacts for us.

Our inability to hire means that we are more likely to euthanize animals and to take more time to remove bodies from crime scenes, as well as to neglect critical maintenance on city infrastructure such as boilers, and to keep police cruisers and fire trucks that need repairs off the streets for weeks rather than months.

Sorry, days.

The city administrator oversees 22 departments and divisions in the current fiscal year, but as Carmen mentioned, we will be transferring two divisions, grants for the arts and the permit center to the arts commission and to the planning department, respectively.

Eleven of the remaining 20 divisions that we have are public facing, including County Clerk, Office of Labor Standards Enforcement, and the Office of Civic Engagement and Immigrant Affairs.

Other functions that we manage are internally facing, supporting the work of other city departments, including procurement of goods and services, maintenance of the city's vehicle fleet, and administration of city property.

This overview organizes our divisions and their budgets by fund type.

And as you can see, our divisions range very significantly in size, with small divisions including Committee on Information Technology and the Entertainment Commission, with budgets that are less than $2 million and that are almost 100% comprised of staff, up to our real estate division, whose total budget next year is 187 million dollars, and which includes multiple staff, as well as significant costs for expenses such as rent, work orders, and debt service.

The mayor's office began the budget process by asking the city administrator to reduce our work order costs by 10%.

Ultimately, the budget office requested that the city administrator reduce its budget by 12 million dollars, and as you can see on this slide, we exceeded that target in the department's February 21st budget submission.

The mayor's office returned to the city administrator and to other departments in March with the instruction to cut departments from cut positions from the department's general fund budget.

And then the mayor's office came back again in May with a significant increase to budgeted attrition.

All told, the city administrator has reduced its budget by over nearly 22 million dollars in fiscal year 2627 and 21 million dollars in fiscal year 27-28.

So to give some details on our budget balancing, I will start with revenue.

The department was able to budget 1.6 million dollars growth in revenue next fiscal year and $781,000 the year after.

This growth comes from increases in revenue at the Entertainment Commission, as well as City Hall events, from increased events at Moscone Convention Center, as well as revenue from other departments that pay us for services that we render.

This primarily reflects an increase in revenue to the Office of the Chief Medical Examiner for toxicology services that they provide San Francisco Police Department.

The budget that's in front of you today reduces salary and fringe benefit costs in the city administrator's office by nearly five million dollars next year and almost nine million dollars the year after.

This includes deletion of vacant positions that the city administrator made in its February budget submission, as well as the decision in March to accelerate the conclusion of the community ambassador program, which resulted in the release of 16 staff before the end of their three-year contracts, and the CAP program concluded at the end of May.

The budget also reflects a March decision to delete five customer service agents at 311, which will result in the layoff of five individuals currently scheduled for the end of June.

In addition, the budget includes the deletion of one 0923 manager position at digital services and the release of an individual from an exempt position as the result of that decision.

In addition to the 22 positions that I've just outlined, the budget deletes 12 vacancies, including custodians as well as analysts at the Office of Contract Administration and the Contract Monitoring Division, which will lead to reductions in custodial services at the War Memorial, Veterans Building, and 525 Golden Gate, as well, potentially as to fewer competitive procurements issued by the Office of Contract Administration.

And finally, as the city administrator mentioned, the personnel budget increases attrition that decreases the funding that we have available to hire positions, primarily in the general fund.

Most significantly, the mayor's office placed 4.3 million dollars of unallocated attrition in the department's general fund budget in fiscal year 27-28.

This is equivalent to approximately 20 FTE and will require us to rethink service delivery in our general fund programs.

In the last several years, we have sought to limit the impacts of budget cuts on services.

We've found efficiencies, we have cut vacancies, we have made reductions to non-salary expenses.

This imperative, though, to cut 4.3 million dollars from our general fund salary budget in year two forecloses any remaining easy solutions.

It will be impossible for us to meet this target without eliminating services and likely laying off additional staff.

In this period of sustained limited resources, we are going to have to evaluate our options and make some very difficult decisions.

This includes savings to city insurance as a result of some unexpected positive changes in the insurance market.

It also includes changes for funding to the contractor development program to reflect usage of that program.

We are right-sizing this budget to match actual utilization.

We are proposing savings from the surety bond program, which result from the fact that this program is currently superfunded, leading us to request a pause to additional deposits.

The administrative code requires that the city maintain $2 million in the surety bond fund, but currently we have $4.3 million in the fund.

So we thought that it would be reasonable to defer future deposits until necessary.

Other non-salary budget savings will come from changes to operations within our fleet management division, including continual continued implementation of a no idling policy for city vehicles, continuing to reduce the size of the city's fleet, as well as increase the number of electric vehicles, which do require less maintenance.

Unfortunately, though, the fuel savings that we had hoped to achieve from the no idling policy will be offset largely by an increase in our fuel prices as a result of the war in Iran.

And then finally, the budget reduces some contract spending and makes small reductions to the services that we buy from other departments.

In summary, the two-year spending plan that's in front of you seeks to meet the city's need to build a balanced budget while sustaining central services.

The city administrator continues to seek to streamline ourselves by shifting functions such as grants for the arts and the permit center to other agencies where appropriate and where that shift will result in stronger service delivery.

This budget also reflects our ongoing effort to focus on core administrative support for city departments, providing strategic services such as capital planning, procurement, real estate planning, and technology that allow other city departments to focus on delivering their key services to San Francisco's residents, businesses, and visitors.

And with that, the city administrator and I are available to answer questions.

Thank you.

Thank you.

And Vice Chair Dorsey.

Thank you, Chair Chan.

I have a quick just this largely for my edification, but I'm just curious.

The savings to city insurance.

Is that for the insurance for the our fleet automobile insurance?

It's my understanding generally we're self-insured as a city, but I I suppose I is if I recall correctly.

Absolutely right.

Just invite you to explain that.

Yeah, absolutely.

So we do as largely the city is a self-insured uh city, and so we do have, I think the controller can speak to it, many reserves that we put aside to account for litigation reserves and other things that we need to account for.

But in addition to that, there are times when we do go out to the marketplace in order to purchase insurance.

So, for example, one of those examples is uh purchasing insurance to ensure our city's art collections, for example.

So there are different things that we actually do go out to to uh provide uh insurance for the airport has some insurance that we purchase on their behalf, the port does as well as as other uh entities.

I think if you remember, um recently there was a fire at the port facilities, one of the the um on the pier, there was a fire that occurred that also tapped into insurance that we had purchased uh alongside with the port to make sure that you were properly insured.

So by and large, most of the city is insured through our self-insurance policy, but there are a few products that we have out there that we purchase.

And then separate topic, um I really appreciate that your office has been deeply involved in charter reform, among other things, including procurement reform that I there are sort of things that I have a lot of interest in.

Assuming the charter measures, and I think we're thinking, I think it's gonna be three, possibly four.

Assuming those were to pass in the fall, um I correct in assuming that your office would have a large role in implementing that.

Right.

Is there anything in here that is accounting for the resources that you need?

Are you adequately resourced for uh thank you, supervisor, for the question.

I think as you rightly said, there are some ideas that are uh that are being floated that include having the city administrator play a continued more independent and kind of long-term role when it comes to strategic procurement uh work and in addition to technology.

Uh currently, we currently have a budget that is a status quo budget with a few additional investments in unified data platform, but aside from that, there is no significant change in our organizational structure.

I do believe that if we were to pick up and really run with some of those, the intention of some of those um measures, that we would have to really uh think more thoroughly about our organizational structure and whether we're actually set up to be able to do it.

I think just to while I can't quote Hamlet as our assessor can, um, you know, there is the Newton law of physics, which say that something that is is static will stay static unless an equal and opposite force pushes it.

And I think this is a very apt um uh description for city functions and processes too.

It's really easy to keep things as they are, right?

It's easy to keep the status quo as it is, but if you want to change something, it takes so much effort to bring people together to explain what that change is to make sure that you get people's buy-in to make that process as good as possible, and then the actual work of implementation, and we don't have the resources for all of that yet.

So thank you for the question.

Thank you.

And I am going to express my concern, but also gratitude, my gratitude for um city administrator Chu and your team for working with the mayor and really just for the city to make sure we have a balanced budget and taking a lot of reduction.

Um I am going to say this on the record um at this moment, and I I know that we can't problem solve right now in the month of June.

Um, but I do hope that in the mid-year, particularly in December, when we have better ideas on many fronts, be it tax revenue measure for on a local level, but also on the state, as well as the federal uh reconciliation bills.

Um, again, that's coming through in September.

Uh along with midterm, and all that that it is my I'm gonna put it on record that I think the city should prioritize the city administrator's office for any um restore um cuts, which should be actually prioritizing the 4.3 million dollars um for attrition.

Because I do I do agree that um reduct further reduction that now we're probably set to approve for the second year is going to be severe and potentially detrimental for the operation of the city as a whole um and it's fairly impactful I think if we could I think we would um for your second year of attrition problem that we should address for this 4.3 million dollars I'll keep I I you have my commitment I'll keep that in mind as we go over the next week or two to see where we land um but I share the concern um I want to be on the record for that um but right now I don't have a solution for you my apologies thank you Chair Chan I appreciate that thank you so with that thank you so much for your time thank you um our conversation continues thank you so much thank you and so with that we will go to um house service system you're gonna drive the slides good afternoon Chair Chan and committee members I'm Ray Gehan executive director for the San Francisco Health Service System and today I'm joined by our chief financial and affordability officer Teresa Tan and together we'll walk you through our proposed budget for the 27 and 28 fiscal years as you know the San Francisco Health Service System serves as an employee benefit administrator for four separate San Francisco public agencies the city and county unified school district city college and the superior court between all four of our employer agencies we manage more than 1.3 billion dollars in annual premiums and are responsible for more than 139,000 lives we do this with a lean budget and staff our proposed total annual budget for 2027 is 17.5 million dollars that will fund 49 FTEs if you do the math that means that each one of our remaining FTEs will be responsible for 2800 members and for overseeing 26.5 million dollars in premiums our budget is funded by two sources the general fund will provide us with 12.2 million which will sustain 37 FTEs and our health service board has approved use of 5.4 million dollars annually from the healthcare sustainability fund which will support 12 FTEs with these limited resources we deliver we strive to deliver a high quality benefit plans well being programs and member support to the public employees who serve the San Francisco community next slide our small staff is kept extremely busy in 2025 uh our staff served 7600 walk-ins at our office at 1145 market street they answered more than 33,000 calls they mailed more than 17000 notices to our members and they processed over 21,000 member enrollments and changes.

Next slide when we received our budget instructions for the next two fiscal years it came with the direction to eliminate three FTEs from our general fund budget a staff reduction of 7.5% this was extremely challenging however we follow the mayor's suggested process to categorize our programs and services into the categories of core strategic and discretionary for core we focused on the services and programs mandated by city charter charter section 88.422 assigns us the duty to provide medical plans for our four employer groups.

For strategic plans and services, we included those benefits that the Series City's various labor agreements require it to maintain for the duration of those contracts, such as dental life and disability insurance.

All our other plans and programs fell into the discretionary category, including our flexible spending accounts, our internal employee assistance program offerings, and pilot programs, such as the out of state Kaiser permanent health plans for retirees living in the states of Washington, Oregon, and Hawaii.

The three positions we identified for elimination include two senior employee assistance plan counselors and one accountant, too.

The elimination of the two senior EAP counselor positions does not mean the city is discontinuing its employee assistance program.

Since 2020, we have contracted with an external EEP provider, COMPSEC, who is currently providing 80% of the individual counseling services to city employees.

With the elimination of our two internal EEP counselors, the remaining 20% of those visits they currently handle will be transferred to COMSIC.

However, a number of services that our two staff members provide will be discontinued, such as management consultations, mediation services, and custom willness workshops.

The elimination of the accountant two position coincides with action that our health service board took at its May meeting to discontinue the Kaiser State Kaiser out of state pilot program, and the remaining work of the accountant two will be redistributed among our remaining fiscal staff.

Please know these decisions were extremely difficult but necessary to ensure our core and strategic services remain protected.

Next slide.

The org chart reflected here shows the total current staff of HSS.

The 40 roles in the white boxes are funded by the general fund, and you can see that they support the core and strategic services our department is mandated to provide.

The roles in the gray boxes are funded by our health care sustainability fund.

That fund is financed by a six dollars per member per month fee added to our monthly health plan premiums.

Charter Section 88.423 limits use of that sustainability fund to fund expenses related to communications, member wellness programs, actuarial expenses, and other efforts to reduce health care costs.

Again, after a thoughtful and thorough review, the only general fund positions available to us to eliminate without significantly impacting our core and strategic programs and services were the two internal EAP counselors and the count and two position that worked on the Kaiser Multi-region plan.

And those three positions are highlighted in gold on this org chart.

I'll now turn over the remainder of the presentation to Teresa Tan, our chief financial and affordability officer.

Good afternoon, Chair and Supervisor.

I am Teresa Tan, the chief financial and affordability officer.

I'll walk through the rest of the slides.

From the chart, the blue line from left to right, our members are increasing from 134,000 to 139,000.

While the orange dotted line from left to right shows our general fund FTEs moving from 49.97 down to 36.65 FTEs.

We are serving more members with fewer staffed.

For fiscal 27, we have reduced three FTEs.

In the first table, 2027 column, last role, highlights a service ratio of 3,811 members per one FTE, making a challenging to preserve the quality service level for our growing population.

No of the members have come to our health service board meetings to express their concerns on long hold and wait time.

We have to make the difficult decisions to reduce headcounts in one of the only discretionary programs under the general fund.

We have 36.65 budgeted general fund positions with 92 currently filled.

We are actively recruiting two benefit analysts and one vacant information systems positioned.

We'll be filled before open enrollment to support services for all members.

The last table on the right side, across both the general fund and our health care sustainability fund, management makes up 16%, and non-management 84%.

This reflects our service-oriented structure, focus on maintaining essential services.

For fiscal year 27, the regional budget column shows our base budget.

The change column reflects updates from the department and the mayor's face.

Most adjustments are in a salary infringement if it's tied to the previously discussed staffing changes.

The final column for fiscal 27 Ross Row, total expenditure budget of 12.2 million keeps our operating budget aligned with require targets while continuing to prioritize and preserve our essential services for all members.

For FISO twenty-eight, total expenditure budget is 12.8 million.

We honored to support people who care for our community.

And this is at the center of our work.

Thank you.

This concludes our presentation, and we're happy to take any questions you may have.

Thank you.

I do not have questions about your budget, but I do wanted to take this opportunity to respond and just allow a brief discussion about the letter inquiry that we provided, to which you provided a response, and I wanted to verify the data that it's provided.

Thank you so much for providing that data.

I think it's it's somewhat inlighting, but at the same time, now it brings more questions to my mind.

What I have found and understood this to be, though, from the data that you provided specifically on requests and denials for care among uh all the service providers that it's Kaiser Permiente, Blue Sheo, and Health Net.

It looks like the breakdown that Kaiser Permiente is allowed to, it's actually providing us specifically on Northern California.

Clearly, they're large, like nationally, so I I can understand it.

But they actually also have provided specifically that are under the San Francisco Health Service System.

On the other hand, Blue Shield does not separate the categories and have provided all Californians, and then HealthNets provide it only San Francisco Health Service System, and yet there's a substantially like a whole bunch of information that is not available to us, even though they did break out specifically in that category.

It seems to me though, the denial for standard denial percentage, the highest is actually by Blue Shield for all Californians, and that's inclusive of both non-Medicare retirees as well as the Medicare retirees.

They are actually at the top compared to at there are at 8.4% of denial versus a 2.2% from Kaiser Permiente, and then for the retirees at 12% denial compared to roughly 4.6% for Kaiser Permiente.

So they're rather high, but then again, they are able to seem to resolve some of these denials at a much higher percentage, too, overall by comparison.

So I think it seems like a mixed back, and I just kind of want to get your response and your take from the report.

Yes, thank you, Chair Chan, again for your efforts uh to elevate this issue with care and urgency.

Um, what I will note uh is based upon the information that we included report.

We included what was available to us at that particular point in time.

We did make the request of all our plans to provide all their entire book of business and SFHSS specific data.

They are committed to providing it.

They just were not able to provide it as of the date that we had to submit the report to you, so we are anticipating that information at any point in time.

I think it is important to note that that information that has been provided by the plans is not something they currently developed uh or have reports developed to provide.

Um, they currently provide this to um the centers for Medicare and Medicaid Services for senior Medicare plans, but they do not provide this information to any other organization for the active and the early retiree population.

So they have been trying to tweak their systems to pull that information, and I know they are committed to providing it, and we'll pass it along as soon as that we get it to you.

Those services do not require any type of prior authorization.

It's only when they are referring members to outside the Kaiser system in the case that they don't have a specialist, they need to make a prior um get a prior authorization to make that outside referral.

Whereas Blue Shield, because they're the insurance company that's working with medical groups, all services generally are subject to prior authorization.

And so one of the pieces of information we also requested from the plans that we have not yet received is number of prior authorizations per thousand members, which I think will demonstrate that difference between Kaiser and those other plans.

And so I think once we have more information, we'll share that with you.

I think that will tell a better story.

So with that, thank you so much for your presentation today.

I don't see any name of the roster.

Thank you so much for your work.

And so colleagues, with that, now it's 12 30 3 p.m.

Uh, I think that let's go on a one-hour um lunch recess for everybody, and so we will return at 1 30 um p.m.

Um at this point.

And the next one we return, the first city departments that will come up is Civil Service Commission.

San Francisco government television.

S Gov TV.

San Francisco government television.

There are what a gorgeous day in San Francisco.

There are few places more iconic than where we are standing today here in San Francisco, and that's not just because Ariana Grande's pop-up is up the block.

Every day, thousands of people begin their San Francisco experience right here at the Powell Street cable car turnaround.

For visitors, this is often their first stop in our city as they make their way up to Union Square or through downtown and on to Chinatown and on to our neighborhoods.

Seven days a week.

Today, we are taking a major step toward that reality.

I am proud to sign legislation accepting a 14 and a half million dollar grant from the Downtown Development Corporation to advance the Powell Street Improvement Project.

This investment will help transform the three blocks between Market Street and Gary Street into a world-class gateway, connecting visitors, workers, residents, and shoppers to Union Square from Union Square down to the heart of our financial district.

This project will widen sidewalks, improve landscaping, upgrade cable car stops, create more space for outdoor dining, and it will add beautiful new lighting inspired by the historic architecture of this neighborhood.

When completed, Powell Street will be more welcoming for everyone who visits here.

Downtown's recovery is not going to be the work of any one sector.

It's going to take all of us city government, community organizations, small businesses, major employers, and civic leaders all pulling in the same direction.

San Francisco moves forward when people step up.

Looking around today, behind me and in front of me, you can see partners doing exactly that, bringing their time, resources, and ideas together to strengthen downtown and accelerate our recovery.

And when downtown thrives, every benefit, every neighborhood benefits.

A stronger downtown means more jobs, more visitors supporting local businesses, and more revenue to fund the services San Franciscans rely on across our city.

So to everyone who helped make this investment possible, thank you for believing in downtown and in our city's future.

Over the last year, we have invested in rebuilding the ranks of our police department, strengthened public safety through our SFPD hospitality zone task force, and worked relentlessly to improve street conditions downtown.

Those efforts are making a real difference.

Crime is down, including retail theft, which is down 29% year over year.

Union Square and Yerba Buena welcome 44 new storefronts last year.

Yes.

More than 800,000 people have participated in programming and events in Union Square.

Nice work, Marissa.

And we just announced a new free movie series coming to Union Square this summer.

All in all, San Francisco is projected to welcome more than 24 million visitors this year, which means tourism will surpass 2019 levels.

People are coming back because they can feel the momentum, and this project on Powell Street builds on it.

Investing in Powell Street says that we believe in downtown San Francisco.

I want to once again thank the Downtown Development Corporation for this extraordinary partnership and investment.

This project would not be possible without your leadership and your confidence in San Francisco.

But I also want to thank DPW, OEWD, SFMTA, the CTA, the Union Square Alliance, and everyone who has helped move this vision forward.

Soon, very soon, I hope, people standing right here will experience a transformed PAL Street.

They will shop, dine, and ride the cable cars through the corridor that reflects the energy and optimism of our city.

And when they arrive here, they will know they are in San Francisco.

Let's go, San Francisco.

Now I'd like to introduce our incredible District 3 supervisor, Danny Soder.

Thank you, Mr.

Mayor, and good morning, everyone.

I'm Danny Sauter.

I serve as the District 3 supervisor.

And this is a beautiful morning, and it is a really, really good morning for San Francisco.

I cannot emphasize enough how important of a space this is.

This is a hub of San Francisco and frankly a hub of the entire Bay Area.

Tens of thousands of people pass through these streets every single day.

Whether they're on our iconic cable cars, taking Muni or BART, some commuting, some coming into the city for the weekend to shop.

Maybe families visiting San Francisco for the first time from around the world.

And this is their first impression.

And you know what they say about first impressions.

So we need to get it right, and with this project, we are going to get it right.

The vision, the urging, the persistence of the Union Square Alliance, and Marissa and her entire team.

Thank you.

The voters, the 2024 Prop B is being put to good use here.

And the voters said yes, and they're seeing their dollars delivered here.

The government, every single department coming together.

In particular, I want to give a big shout out to our county transit authority, SFCTA, $4 million from that entity to fund this project.

Thank you.

And then maybe the missing piece, the piece that we've all wanted, that idea of public and private coming together, working together.

We've all wanted that.

We just haven't had it until now.

But thanks to the mayor's partnership, thanks to the downtown development corporation.

Thanks to business leaders, civic leaders, leaders here in Union Square and the Financial District in downtown, we have that now, and that is why we're signing this legislation today.

$14 million.

Thank you, Downtown Development Corporation.

And to speak about the incredible work that the DDC is doing on this project and on many more to come.

I have the pleasure of introducing the CEO of the Downtown Development Corporation, Shola Oletoye.

Thank you.

Good morning, good morning.

My name is Shola Olathoye.

Thank you, Supervisor.

Thank you all for being here this morning.

We every day, every time we do this, Mayor, we have great weather.

So we like it's like really good.

This is this is a good winning streak.

Wonderful to be with you all here today.

We have so many people to thank.

Um and his entire team, Ned and Laurel, our folks at uh DPW, the MTA, so many people have worked tirelessly at to bring uh to make today happen.

Um, as the supervisor said, one of the components of our work has been bringing together our private and civic sectors, and that is truly the embodiment that is the DDC.

We are a nonprofit public-private partnership that is built to raise catalytic capital to invest in things that work that drive the downtown recovery.

When we came when I started a little more than seven months ago, and we started talking about this project, and we start talking to so many leaders here in the city, there was one person, one partnership that uh was so excited about the possibility of making the reality of a reimagined cable car at Powell Street happen, and that is Catherine and David DeWild.

So please, thank you, please thank you, Catherine and David, for your inaugural support in making this project happen and your continued focus on details and process to make sure we get this right.

Um we there are so many people to thank, and and we'll share a longer list with press after.

Um, but certainly our our hotel, your partners in Hilton.

We are incredibly grateful for your support who understand the important uh place that Powell Street and the cable car play both in the city and the country's imagination as our gateway to uh to San Francisco.

Um, I want to make the case for investment in downtown.

And what we know is that downtown is showing real momentum.

We have real numbers to back up that that to back up that things are moving in the right direction.

Foot traffic on this corridor is up nearly 20% year over year.

Our bite, our BART ridership is it since the pandemic is up 20% year over year, and our hotel revenues are starting to exceed pre-pandemic levels.

Moscone is now fully booked for the rest of this year and nearly booked for the rest of 2027.

These are really important metrics.

I'm a nerd, so I like data.

But data really matters when you are using the public's investment, the private sector's investment to invest in such important public infrastructure.

That is why we are so proud today as the DDC to be announcing a 14 and a half million dollar commitment to this project.

These this investment not only will support an increase in property values, catalyze the amazing tourist tourism rebound, and boost and support small businesses.

This just this isn't just a one-off.

This is part of a larger downtown strategic investment plan that the DDC and her many partners, our CBD partners, our amazing Union Square community benefit district led by Marissa Rodriguez, who you'll hear from in a moment, who has had and been leading this push for a reimagined Powell Street.

Thank you, Marissa.

And the many CBD partners here in the downtown.

We recognize that we are a city of neighborhoods in a downtown of districts.

But what has been missing is a comprehensive plan for investment for our downtown, and we are very excited to be helping to drive that vision.

Today is part of that broader strategy, and we recognize that downtown's future will cannot look like the past.

And so we are not only making a case for investment here, but around downtown because we know a stronger downtown is a stronger San Francisco.

So this is exactly what it looks like a public-private partnership.

And we're just getting started, and it's my pleasure to hand it over to Marissa Rodriguez.

Actually, Marissa, one last, there's one more person I need to say.

Okay, which is our DDC board member, Chris Meany.

Yes.

Has played.

Where's Chris?

Where are you, Chris?

Right behind, behind me.

Okay.

Chris has played an extraordinary role in working with the property owners, both here and around Powell Street, but all around downtown to make the case for investment.

And we could not be more grateful and proud for his leadership and his support.

So thank you, Chris.

And now Marissa, thank you.

Thank you.

Good morning, everyone.

Are you excited?

Yeah.

All right.

I actually, Chris, I need your secret sauce because I'm going to need more money.

I know it, so I'm going to need to know how you do it.

Um, okay.

I need notes because I'm, as you know, really, really, really excited about this moment for San Francisco.

Um, San Francisco has always been a city of visionaries and dreamers.

I'm one of those.

We have never been afraid to think big, and this project represents that same spirit.

Today is about more than redesigning a street.

It's about investing in the future of San Francisco.

It's about ensuring that our front door to the world reflects the beauty, innovation, and resilience that has always defined this city.

And I am very careful when I use the word resilience.

It's been an interesting experience, of course, being here and experiencing certainly the hardship, but we are coming back.

And it's about sending a clear message.

San Francisco is moving forward, and our best days are ahead of us.

Thank you.

My name is Marissa Rodriguez.

I'm the CEO of the Union Square Alliance.

This project means so much to me, and I know the community here in Union Square.

I want to thank the man behind me, our mayor, Daniel Lurie, another San Franciscan who I know understands just the importance that this gateway to San Francisco represents for our community.

I want to thank the downtown development corporation.

This is a lot of thank you, so please bear with me.

I know it's hot.

DPW, Carlos Short, I guess.

The Union Square Alliance, my team, our ambassadors here on the street, boots on the street, keeping this up.

It looks like nothing to see here, but that takes a lot of energy, time to make sure our community feels safe and welcoming.

I want to thank my team that's here in the audience, community members that I see.

I'm gonna call it the local property owners who stepped up big time and early.

Thank you, Chris Meany for that.

Thank you to our community.

I'm seeing those who I see, like the Varlow family, Russ Kyle.

I know Handlery, John Hamlery, thank you.

I have to do that.

Um, and I know there are many more.

I have a list, and a list will be provided to everyone as well because I don't want to miss anyone.

MTA, CTA, Field Ops, Site Lab.

When I say OEWD, I see Jackie and Selena and Laurel and Antopie.

Um, all of you lean in day in and day out, and we get this done.

And to our CBD partners that are here.

I saw Scott of Yerba Buena, I think I saw Andrew, right at the East Cut.

We're we're all in this together, we're really working hard to try to bring our city back.

It takes all of us.

This guy pushes this along day in and day out.

We really it's partners.

Recovery is not achieved by anyone organization or individual.

It takes collaboration, and today's announcement is a powerful example of what can happen when we work together and think big.

If we want to call this Ben White, thank you.

You know, if we want to call this a world class city, we must invest in ourselves.

We must invest in our infrastructure.

We must invest in what we put forward.

So when people come to visit us, they want to stay a while.

And they want to come back.

And for me, it's a story of Northern Californians, Bay Area residents, and San Franciscans being proud of their city by the bay again.

So thank you to all of you here for making this happen.

And now, I'd like to welcome up Todd Masonis of Dandelion Chocolate and only an SF.

These are the types of businesses we want to see lining Powell Street, especially after this reimagined space.

Thank you.

Good morning.

And thank you, Mayor Larry, and everyone at the DDC for inviting us here today.

Dandelion has its roots in San Francisco.

We make chocolate, actual chocolate, right here in the city.

We import sacks of cocoa beans, we roast them, we shell them, we grind them, we temper them, we actually turn it into a real physical product in the city proper, which is a little unusual for a city mostly known for tech and AI.

But we're proud of that.

San Francisco is part of our DNA, and we're now considered one of the best craft chocolate makers in the world.

And I honestly don't think it could have happened anywhere else.

San Francisco understands craft and has the technical grit necessary to take something seemingly simple as two ingredient chocolate and make it a reality.

I mean, so as we've grown, we've expanded bit by bit, and we always dreamed of having a location near Union Square.

And in fact, a couple years ago, um, we looked around for a location here, and I'll be honest, we were uh we were a little hesitant about where the city was at.

We there weren't many people walking the streets, storefronts were empty, the charm was gone, and we weren't sure what the comeback strategy was for the city, and we didn't see the path.

About a year ago, we were approached by vacant to vibrant through the city, and kind of skeptically, we took a bet on a small pop-up spot right up the street here, and we were so blown away by the surprise by how much the city had changed and how well the spot has done for us.

People showed up every day, the locals have come in for a quick treat.

The tourists come by every day looking for the best of what San Francisco has to offer.

And every single day we hear the same questions, which are can you stay forever?

And can I get a frozen hot chocolate?

Um, so today I'm actually thrilled to announce that we have just signed a permanent lease on our pop-up spots.

And we're not just keeping the small shop, but we're gonna add a little chocolate cafe inside.

And actually, with all of the new streetscape work, we'll actually be able to have outdoor seating and actually create a mini dandelion experience on one of the most important streets in the city.

Um, so this matters to us not just because streets are places you walk through.

They're actually places where you want to spend time, the wider sidewalks, the outdoor dining, the more welcoming cable car turnaround, the golden lantern, that can celebrate pride, the warriors, the giants, the valkyries, the holidays, and more.

This is how it becomes a destination again.

So we have seen in the past that San Francisco has had some real challenges.

It hasn't been easy to manufacture a real physical product here, but this is still the most innovative city in the world.

And it seems like what's happening here is a very San Francisco kind of innovation.

You've got small businesses, the public sector, property owners, and civic organizations all moving together and moving faster to make this happen.

So we as Dandelion are so incredibly grateful.

Grateful to the mayor, grateful to DDC, grateful to everyone who is helping to make this possible and build a more beautiful city.

We are optimistic or optimistic about Powell Street, about Union Square, about San Francisco.

It feels like San Francisco is back, and we are proud that Dandelion gets to be a small part of what comes next.

So thank you.

And now I'm gonna hand this over to Karen Flood of the Flood Building.

All right, good morning, everyone, and thank you uh so much, Todd.

Who doesn't love local business and chocolate?

My favorite.

I've been in there numerous times since they opened.

Thank you, Todd, for being an early pioneer to returning to Powell Street and having the foresight to see that our street is coming back.

So a few more thank yous.

Bear with me, bear with me.

So the DDC, thank you so much, Shola, for your leadership.

Uh, Chris Meany, um, who actually has worked with us at the Flood Building for over, can I say Chris, about 30 years and reimagined our building back in the early 90s uh during that chapter.

Now, of course, is leading the effort to raise some funds to really realize this vision.

Thank you, Catherine, for being an early uh investor and believing in this project.

We so um appreciate you.

Um, and of course, the mayor for um prioritizing downtown and um really supporting downtown and its recovery.

Uh you're everywhere.

Um, we so appreciate you.

You've single-handedly turned around the narrative, which means that I actually have tenants to talk to with the help of my brokers.

Um, so thank you.

Thank you for that.

So I'm Karen Flood.

I'm one of the partners of the Flood Building, uh, right behind my left shoulder here.

We are so proud of our building, uh, which was built by my great grandfather over 120 years ago when we had wooden sidewalks here.

We had horse and buggies, but always the steady, steady cable car behind me.

Now, of course, you see more Waymo's and and scooters and what have you.

But um, we really have seen a lot.

The building has been a witness to history um with uh a couple of pandemics.

Hello there.

Hello there.

We love dogs.

Um we have been very resilient over the years.

A couple of pandemics, world wars, uh fires.

Uh we've seen it all.

Uh bucket drummers, broken windows, like bring it on.

We we can take it.

But this is this continues our story this day here on Powell Street.

So we're so very excited.

We're so excited to see the realization of this project.

Marissa Chandelier, it's gonna happen, Marissa.

It's gonna happen.

You've been driving this forward all through the design process.

It's gonna be absolutely gorgeous.

We're gonna have lanterns up and down the sidewalk, beautiful new sidewalks.

And what some of you don't know is this started like over what 11 years ago, back in 2010, because we had so much foot traffic here.

We were so fortunate.

We didn't know how fortunate we were.

So we had to widen the sidewalks.

And we had the Powell Street Promenade.

Russ remembers that, Cammy remembers that, right?

We widened the sidewalk, it was a five-year project.

Then we needed to replace it.

We couldn't, we're looking for the money, it took a while.

We had a failed bond measure, but then all of a sudden, Prop B was came through and and the voters supported it.

And so we had funding from that.

We still had to fight for it a little bit, as Ned and uh the mayor know.

Uh but anyway, and we appreciate um the city contributing significantly through that measure.

Also SFMTA, and then of course the DDC coming through um with this critical 14 and a half million at the end here.

Um, so we are we are so very grateful.

We can't wait to see it happen.

And you know, we as property owners, this will be transformational for us.

It it really, it really will be.

I finally have people to talk to that might want to come open up businesses again in our building, and I can really point to the project and say, listen, this is gonna be incredible.

This is gonna be a reimagined, reinformed street.

We're gonna have whether it be food or retail or entertainment or what have you, we're gonna be able to draw those those tenants back and bring uh, as the mayor said earlier, um, business, activity, um, jobs, more revenue to our city, it's really gonna be incredible and um make us all so proud.

So um thank you again, everybody, and I believe now I turn this podium back to the mayor for a signing.

Yes, Mr.

Mayor?

Okay.

All right, you all stay right here.

We're at the table.

Yeah, the table.

Thank you, sir.

You got it.

Good.

How are you doing this?

Oh, yeah.

Office is coming back.

Look at this.

Are you all ready?

All right, let's sign them.

All right, everyone, looking right here.

SF Gov Cheesy.

San Francisco government television.

You're watching San Francisco Rising with Chris Manners.

Today's special guest is David Chu.

Hi, I'm Chris Manners, and you're watching San Francisco Rising, the show that's about restarting, rebuilding, and reimagining our city.

Our guest today is David Chu, the city attorney for the city and county of San Francisco, and he's here today to talk to us about the opioid crisis, reproductive rights, and the non-citizen voting program.

Mr.

Chu, welcome to the show.

Thanks for having me on.

Happy to talk about whatever you want me to talk about.

So can we start by explaining the difference between the city attorney's office and the district attorney's office?

I think it can be slightly confused.

That is a very common confusion uh with members of the public.

So if you get arrested in San Francisco by the San Francisco Police Department, uh all criminal matters are are dealt with by the San Francisco District Attorney.

We handle all civil matters on behalf of the city and county of San Francisco.

What that means is a number of things.

We provide advice and counsel to all actors within city government, from our mayor, every member of the board of supervisors to the 100 plus departments, commissions, boards that represent the city and county of San Francisco.

We also defend the city against thousands of lawsuits.

So if you slip and fall in front of City Hall, if there's a bus accident, uh if there is an incident involving the San Francisco Police Department, we defend those matters.

We also bring lawsuits on behalf of the city and county of San Francisco.

We're most famous for litigating and obtaining the constitutional right to marry for LGBTQ couples.

We have sued gun manufacturers, payday lenders, oil companies, you name it, who are undercutting the rights of San Franciscans and the city and county of San Francisco.

So now moving on to the opioid crisis, I understand you've had some success in court dealing with manufacturers, distributors, and pharmacies.

Um could you elaborate a little bit on that for us?

So the opioid industry, and by that I refer to the legal industry that prescribes pain pills, over years deceived Americans and uh resulted in literally thousands upon thousands of deaths and tragedies that we see on our streets every day.

When it comes to the addictions that folks are experiencing, many of the addictions really stemmed from what happened over a decade-plus period where the prescription pain industry marketed prescription pills in ways that were false.

We were one of thousands of jurisdictions around America that brought a lawsuit against the opioid industry, but we've had a particular set of successes that others have not.

We initially brought a lawsuit a few years ago against every part of the opioid supply chain, and that included manufacturers, distributors, and retailers, including pharmacies.

Over the course of four plus years, a number of these corporate defendants settled with us.

We've, as of this moment, brought in over 120 million dollars of cash and services to the city to help address uh the root causes of what we're talking about.

Uh but a few months ago, we had uh really a historic verdict against the pharmacy Walgreens and their role.

Walgreens was responsible for literally over a hundred million pills flooding the streets of San Francisco over a period of years where they flouted federal law that required them to track where their pills were going to.

They had a what what we refer to as a fill-fill-fill pharmacy culture, where folks would bring in their prescriptions and the pharmacists would just fill them without checking why someone was coming in multiple times, without checking why certain doctors were seeing a 100-fold increase in the number of opioid prescriptions that they were prescribing.

So we had a historic judgment uh against Walgreens recently, but it's been a very intense lawsuit, and we know that we'll never bring back the lives that we have lost to opioid addictions, but it's critical for us that we get the resources that we need.

Maybe one other thing I'll mention because it's often a confusion, a large percentage of folks who are addicted to street level drugs, say heroin or fentanyl, started their addictions with painkillers, uh opioid medications that were prescribed through doctors, provided through pharmacies.

And so literally the suffering that we're seeing on our streets was caused by the opioid industry over many, many years and has created the significant crisis that we are dealing with right now.

Right, right.

Now, moving on, I understand after the recent Supreme Court ruling striking down Roe versus Wade that you've put together an organization that's designed to help provide free services to people who are both seeking abortions and providing them.

Can you tell us about the organization?

Sure.

So before the Dobbs decision came down, but after we learned about the leak from the Supreme Court about the draft that suggested the decision would be as bad as it has turned out to be.

Women, doctors, nurses who could be subjected to lawsuits, who could be arrested, who could be prosecuted, particularly in red states, 26 states where uh rights are being rolled back or in the process or have already been rolled back because of the Dobbs decision.

So we put out a call to lawyers all over the Bay and frankly all over the country, and as of this moment, there have been over 70 law firms that have answered our call to be part of the legal alliance for reproductive rights, who have committed to reviewing cases and providing pro bono assistance to patients and providers who are at legal risk.

We also are looking at potential cases that these lawyers can bring against various states in these areas that are looking to deprive women and patients and providers of their of their rights.

It is a very dark time in America, and uh I'm really proud that that Bay Area attorneys, the legal community here have stepped up to answer the call.

No, that's very important.

That's great.

So now the non-citizen voting program that was passed by voters just for school boards has faced some court challenges recently.

But it was in place for the most recent election that we've had.

How do you see that situation panning out?

Yeah, in fact, it's been in place for now five school board elections.

So a little bit of background.

In our San Francisco schools, over one out of three kids has a parent who is a non-citizen who doesn't have a say in the election of the policymakers that dictate the future of our San Francisco public schools.

And so over a number of years, there has been a movement to allow immigrant parents to vote in school board elections.

A few things I'll mention about that is our country has a very long history when it comes to allowing immigrants to vote.

From 1776 for 150 years till after World War I, immigrants were allowed to vote in most states in our country on the theory that we want to assimilate immigrants in American democratic values and institutions.

And it wasn't until an anti-immigrant backlash in World War I that that sort of ended.

But in recent years, cities across America have allowed this to happen.

In fact, at this moment, I believe there are over a dozen cities that have voted to allow non-citizens to vote in a number of contexts.

Now, this is particularly important in our schools just given how challenged our schools are, and given that we know that when we engage more parents in our school system, regardless of their citizenship, it helps to lift up our schools for all parents.

And so in 2016, the voters of San Francisco passed a ballot measure that allowed this to happen.

Unfortunately, earlier this year, there were conservative organizations that came to San Francisco to bring a lawsuit to try to overturn this.

And I should also mention, it is obviously the perspective of our office and our city that this is constitutional.

Nothing in the constitution prohibits non citizens from voting.

And in fact, there's an explicit provision in the Constitution that allows chartered cities like San Francisco when it comes to school board elections to be able to dictate the time and manner of those elections.

And so we are involved in litigation on this issue.

There was an initial ruling that was not good for us that essentially said at the trial court level we shouldn't allow this.

We appealed it up to the appellate level.

The appellate court made an initial decision to allow this past November election to proceed as it has for the last previous four elections.

We're going to be in front of that court soon.

Stay tuned, we'll see what happens.

It was good to hear that the city was able to reach a settlement with the Center for Medicare and Medicaid Services.

How did you manage to reach that agreement?

It was not an easy conversation.

Just uh a little bit of background.

So Laguna Honda has been an incredibly important institution in San Francisco for 150 years, taking care of our most vulnerable patients, our frail, very elderly patients, many of whom are at end of life.

And a few years ago, there were some issues in that hospital, some violations of rules that we very much want to make sure don't get violated.

There were folks that weren't using proper PPE, who were bringing cigarette lighters into the facility, who might have brought some contraband into the facilities.

We have zero tolerance for that and have made that very clear.

We self-reported some of these violations to the federal authorities.

And unfortunately, from our perspective, they took the very disproportionate step of ordering the closure, the permanent closure of Luguna Honda.

Problematic on a number of reasons.

First and foremost, there are just no skilled nursing facility beds, not just in California but around the country.

After their order came down, we literally were putting a thousand calls a day to skilled nursing facilities around California and around the country and could find nowhere to move the 700 patients that we had had in Laguna Honda.

But just as disturbingly as we were forced to start moving some of these patients, uh a number of them died.

There's a concept in medicine known as transfer trauma.

When you move someone who is that frail, and unfortunately, folks, folks died.

And we were at a point where we were five weeks away from the deadline for the federal government uh that they had provided to us to close the facility.

So uh and we had been trying for months to get the federal government to reconsider their action.

So I was compelled to bring a lawsuit on behalf of the city and county of San Francisco, and very pleased and appreciate that we were able to come to a settlement whereby transfers will be delayed at least until next year.

We're going to have at least a year of funding to keep the facility open and hopefully we can get back up on our feet and ensure that no future violations occur because this is an institution that has to stay open for the good of these patients.

Quite right, quite right.

So finally, congratulations on winning an important public power service dispute with PGE.

Why is it important that the city's rights as a local power provider are maintained?

Well, so San Francisco has been a local power provider for decades.

We are fortunate to have access through our Hetch Hetchi hydroelectric system to provide electricity to a number of providers, particularly public recipients of that.

And unfortunately, PGE has used its monopoly when it comes to private electricity to try to stop that and to block that.

And from our perspective, they violated federal law in adding literally tens of millions of dollars of expenses to San Francisco and institutions that were trying to ensure public power infrastructure put years of delays on our ability to do this.

And so we had to bring a number of appeals in a federal commission.

Uh we were successful in those appeals, and there was a decision recently that basically held that PG<unk>E could not use its monopoly to unfairly delay or add tens of millions of dollars of cost to the city and county of San Francisco as we are trying to move forward with our vision of public power.

Clearly, PGE uh has not been able to serve not just San Francisco but Northern California well.

We all know that with the wildfires, with its bankruptcies, with all the issues that they've had.

We think there is a different model to move forward on, and we are grateful to the court in providing a ruling that allows us to move forward.

Well, thank you so much for coming on the show.

I really appreciate the time you've given us here today.

I appreciate it and thanks for your uh thanks for your questions.

Thank you.

Well, that's it for this episode.

We'll be back with another one shortly for SFGov TV.

I'm Chris Manners, thanks for watching.

FFGov TV.

San Francisco television.

I don't think you need to be an expert to look around and see the increasing frequency of fires throughout California.

They're continuing at an ever increasing rate every summer, and as we all know, the drought continues.

We have huge shortages of water right now.

And so I don't think you have to be an expert to see the impact.

When people create greenhouse gases, we're doing so by different activities, like burning fossil fuels, we are letting off carbon dioxide into the atmosphere.

But we also do this through food waste.

And so when we are wasting solid food and leaving it in a landfill, it puts out methane gas into the atmosphere, which is a really potent greenhouse gas, and that accelerate the rate at which we are warming our planet and makes all the effects of climate change worse.

The good news is there are a lot of things you can be doing, particularly composting, and then the added benefit is if when the compost is actually applied to the soil, it has the ability to reverse climate change by pulling carbon out of the atmosphere and into the soil and the roots, and there's huge amount of science that's kind of breaking right now around that.

In the early 90s, San Francisco hired some engineers to analyze the material San Francisco was sending to landfill.

They did a waste characterization study.

And that showed that most of the material San Francisco was sending the landfill could be composted.

It was things like food scraps, like coffee grounds and banana peels and eggshells, and then sticks and leaves from gardening.

Together, we're college in San Francisco started this curbside composting program.

We were the first city in the country to collect food scraps separately from other trash and turn them into compost.

It turns out that was one of the best things we ever did.

It kept 2.5 million tons of material out of the landfill, produced a beautiful nutrient-rich compost that has gone on to hundreds of farms, orchards, and vineyards.

So in that way, you can manage your food scrap and produce far less methane.

That's part of the solution that gives people hope.

Then we're doing something to slow down climate change.

I've been into organic farming my whole life.

When we started planting trees here 15 years ago, you know, it was very natural to just go get some compost from ecology.

So compost is just the air I breathe.

How it works in nature is that the soil biology or the microbes in the soil feed the plants.

And our job as farmers as regenerative farmers, we feed the microbes with compost, and they'll feed the plants.

It's very much like in business where you say take care of your employees and your employees will take care of your customers.

It's the same thing.

Take care of your soil microbes and soil life, and that soil life will feed and take care of the plants.

They love compost because it's a nutrient-rich soil amendment.

It's food for the soil.

That's photosynthesis, pulling carbon from the atmosphere, pushing it back into the soil where it belongs.

And those roots exude carbon into the soil.

You're helping turn a farm into a carbon sink.

It's really an international model.

Delegations from 135 countries have come to study this program.

And it actually helped inspire a new law in California, Senate Bill 1383, which requires cities up and down California to reduce the amount of compostable material they send to landfills by 75% by 2025.

And now we will continue on the department budget hearing, and this next department is the Civil Service Commission.

Good afternoon, Supervisors.

Thank you for this opportunity to present our budget for fiscal years 27 through 28.

On the next slide, you will see our mission statement.

Commission staff works closely with the Department of Human Resources and other city departments on civil service rule application to meet the growing demand for an expedited but fair and impartial hiring process to develop a diverse, well qualified staff reflective of the public we serve.

This includes reviewing and amending rules, policies, and hiring practices.

In addition to hearing appeals and conducting investigations to resolve department employee concerns on merit system matters, the commission per the charter sets the salaries annually for elected officials and board of supervisors.

The department conducts trainings on the merit system for human resources staff, hiring managers, and union representatives to increase their knowledge of the merit system, application of the civil service rules, policies, and procedures.

The commission reviews and approves requests for personal service contracts to determine if work cannot be performed by city employees.

Our office works closely with the city attorney's office, Department of Human Resources staff, Office of Contract Administration staff, and the GovOps team to develop methods to efficiently move forward personal service contracts while maintaining transparency with the unions and the public.

Performance metrics.

The performance metrics are established by the Commission for staff to appropriately assess the timely resolution of appeals and inspection services.

Percentages have been increasing moderately from one fiscal year to the next.

However, the Civil Services Commission is encouraged that the automation of appeals and inspection services management systems will make the follow-up and resolution of appeals and inspection service much timelier.

Appeals that reflect a lower percentage of resolution are the result of delayed staff reports from departments due to pending grievances, arbitration, litigation, settlement agreements, or staffing.

It is the commission's goal to resolve appeals and inspection services within 60 days to provide appellants with the resolution they require, providing final determination and closure of their complaint.

And now you have the budget.

The mayor's proposed budget allows for the Civil Service Commission to maintain our very lean staffing and operate optimally as soon as we can fill our vacant position.

We are currently experiencing an attrition rate of 16% because of the vacancy since December.

Full staffing ensures effective oversight of the merit system and civil service rules and the authority to provide qualified candidates for city and county positions.

The department continues to advise departments on the applicability of the rules and provides training to employees and unions on the merit systems, appeals and inspection service requests, and the Civil Service Commission policy on personal service contracts.

Commission staff also serves as thought leaders and members of the Pathways and Pipelines peer learning cohorts in collaboration with the Human Rights Commission.

They focus on implementing various avenues to city employment and advancing the city's employment and retention goals.

The organizational chart represents the Civil Service Commission permanent organizational structure over the past six years.

The department was fully staffed in early 2025.

However, in December, a key staff member of 30 plus years retired, leaving a void of institutional knowledge.

With the current level of reduced staffing, it requires the entire department to manage hybrid commission meetings.

Yes, our policy body still conducts hybrid commission meetings while managing office coverage and other competing work priorities simultaneously.

The civil service commission has a long history of overseeing the merit system and being a reliable, respectful, and trusted resource for our employees, hiring managers, city attorney's office, whistleblower program, union representatives, and the public.

We understand the challenge for the mayor to establish a balanced budget during a deficit and the importance of maintaining necessary public services.

We are grateful to retain our FTE count and hope to backfill our vacancy soon.

On the proposed budget, as you see here, Deputy Director Levina Holmes has closely been working with the mayor's budget office to prepare the budget requests without impacting mission critical services required of the Civil Service Commission while seeking additional ways to collaborate, expedite, and improve the appeals inspection service and support hiring processes in ways that automate, remain equitable, retain fairness and transparency, and continue to provide the best qualified candidates for positions to serve the residents of San Francisco.

The department is on target to save approximately 12.5% of our current budget allocation, primarily because of the hiring freeze since the position became vacant due to retirement.

The prepared budget assumes some savings, our professional services, materials and supplies, and services of other departments, line item reduced in fiscal year 26.

Keep in mind our budget for materials supplies is at its lowest level of $2,979.

We are very appreciative of the Department of Real Estate, who reduced our rent and reviewing the possibility of moving our department to a smaller space with the willingness to share conference rooms with other departments for training and meetings.

We place emphasis on the measures we have taken to meet the mayor's priorities, particularly with an eye to restructuring the organization around our current budget staffing level to increase efficiency and eliminate redundancy.

Much of this work is already underway in our current budget cycle with the automation of appeals and inspection service processing.

The mayor's office, and we are very thankful for the mayor's office, has allowed the department to fill the vacancy with an exempt position so we can move forward with the special project working with the Department of Technology.

And we just recently received approval from the Department of Human Resources to fill the position.

But even with the budget challenges facing our departments, the Civil Service Commission continues to partner with departments in expanding career opportunities and encouraging growth and retention by providing advice and training on merit system matters and being open to hearing ideas and concerns on how we can improve our services.

We are available to respond to any questions you may have.

Thank you.

I don't have additional questions to the budget, but just simply kind of kind of curious about how has it been with the Prop J approval, as well as the most recently permanent SF.

Like I understand there was supposed to be a specific commission hearing or meeting again, and probably already passed, or did it get scheduled?

We have a special meeting scheduled actually for June 18th.

Just informing them about the process and how PSCs are reviewed, being prepared to respond to any of the commissioners' questions, and the commissioners continue to encourage to build the communication between the department and the unions.

Again, the civil service commission's role when it comes to the contracts really has to do with can our city employees perform the work?

Right.

And it is an open hearing, so as if you have already heard that many have made public comment, and our commissioners takes this matter very seriously.

So, but there is a special meeting that is scheduled for June 18th when we will hear back from both the department and the union when they have had time to meet and to report back to us.

Um this is also my roundabout way to say thank you so much for your work.

It is always kind of it's one of those you're one of those city departments that it is until crunch time.

Sometimes people take a city department like yours for granted.

Um, but it is a time like this, a critical time and crunch time that people recognize why now they have to recognize why Civil Service Commission is such a critical um unit uh for the city department to function and to function well and with integrity and transparency.

So thank you so much for your work.

Thank you.

Thank you.

And so with that, we will go to the next city department, which is the department of human resources.

Good afternoon, uh, Madam Chair, members of the committee.

My name is Carol Eisen.

I'm your human resources director, and I'm here to present on the budget of the Department of Human Resources.

Our department serves as the city's strategic partner in workforce management.

We support departments across the city in attracting, developing, retaining, and supporting employees who deliver essential public services to San Franciscans.

I'm going to discuss both our recent progress and priorities that are guiding us over our work for the next two years and provide you with an overview of our budget.

Next slide, please.

DHR helps to ensure city departments have the workforce tools and the human resources support needed to deliver services to San Franciscans.

We support the entire employee lifecycle from recruiting and hiring employees to training, development, labor relations, workplace investigations, and workers' compensation.

Our work is organized into six core service areas: hiring and assessments, labor relations, organizational development, equal employment opportunity claims and investigations, human resources consulting services, largely supporting small departments and policy development, and our workers' compensation division.

Taken together, these services support all city departments.

We are an enterprise-wide, we are citywide department that serves all agencies.

Next slide, please.

In these next few slides, I'm going to highlight the progress we've made in advancing our strategic priorities and in delivering results.

Next slide, please.

This year, the Department of Human Resources has continued to improve efficiency mostly through uh technology automation and building better workforce data that we can rely on to make decisions.

We've automated workflows that have reduced manual work and streamlined key human resources processes, including reducing the time to hire and onboarding of new employees and a host of other activities that we've been involved in.

We've enhanced our reporting capabilities, we've and by doing so, we've made it easier for departments to access timely and reliable workforce information on which they can rely to make their own decisions.

By way of example, a single example, and we have many others, we recently launched a new Cal OSHA injury management tool that automates required state and local reporting.

This tool has been wildly popular.

It's really, it's a every department was on their own using largely manual processes, spreadsheets that they were developing singularly.

We now have put this right into the system, and everybody can use it.

So we're pretty happy, and we're just trying to put the building blocks in place of this nature to automate a lot of work.

Overall, the improvements have helped the Department of Human Resources operate more efficiently, strengthen compliance, and provide better data to support decision making across the city.

Let's go to the next slide, please.

In addition to modernizing our systems, we have continued to focus on strengthening the city's workforce and supporting employees throughout their careers.

A key accomplishment of this past year was advancing the city's rebuilding the ranks initiative.

We are working very closely with the public safety departments, in particular the police department to fill critical vase vacancies and to increase uh sworn officer staffing.

We have also, as you know, successfully negotiated long-term labor agreements for the public safety employees and the police and fire departments.

This provides stability for the employees for those departments and for the city's long-term financial planning.

Other accomplishments, including expanding our career-wide career services and supporting employee retention and well-being.

Next slide, please.

In fiscal year 26-27, DHR will focus on four strategic priorities that support the city's workforce and operational needs.

First, HR services and policy reforms.

We are going to continue to make city employment processes more efficient, consistent, and responsive to workforce needs.

For example, we have a big focus on allowing employees to uh be able to use forms that exist within self-service to make their own applications for things like telecommuting agreements or approval for outside employment, the range of things that have to be documented and followed and approved.

And we now are able to do that interactively and keep all the records in one place.

Supporting employees through their careers by expanding workforce development opportunities, promoting well-being, providing resources that help employees succeed in public service.

As I said last year, I hope you do it.

Please stop by our career center if you get a chance and say hello to the folks down there.

It's a very uh busy environment.

We do a lot of work down there.

And we're continuing to invest in automation, systems integration, data analytics, and digital tools.

And finally, we're as we always do, we're working on our collaborative partnerships with labor, and we're preparing for negotiations for all the non-uniformed labor agreements that are coming up next spring.

Next slide, please.

Okay, turning to our budget.

Our total budget is approximately 164 million dollars.

The largest expenditure is professional services.

It's about 105 million.

But what you should know, and I want to make sure the committee is aware that about $96 million or more than 90% of this category are direct workers' compensation costs.

So it's for the uh supporting uh employees who have either fallen ill or become injured on the job.

This supports both their income replacement and all the medical costs associated with that.

These are citywide costs, and we are self-insured, and that's that is in our contained in our budget, and we manage that through our workers' compensation division.

The remaining professional services expenditures support citywide programs, including training and development, public safety exams, licensing services, backgrounding and medical screening, and some labor-related services as well.

Our second largest category is our salary and fringe benefits, 43.7 million, or about 27% of our budget.

These funds support the staff who deliver the core services that we just discussed: recruitment, labor relations, workforce development, EEO investigations, HR consulting, and workers' compensation.

So we do a lot with not a lot.

Overall, this reflects our dual role as both a service department and administrator of workforce programs and obligations.

Let's go to the next slide, please.

The proposed budget reduces DHR's on-budget staffing level by about 7% over the two-year budget.

It is a net reduction of 13 full-time equivalent positions.

Some of that, 11 of it is through attrition, some is through seven positions that have been cut.

And we are also taking back the final piece of the decentralization of our EEO work in the Department of Public Health.

At present, EEO does its own uh DPH does its own intake interviews.

Working closely with that agency, they have asked that we assume that work.

So we're assuming five people who do it and probably a lot more work than five people can cover, but we will do our best.

These reductions taken together do bring DHR staffing to its lowest level in many years.

It will require us to really focus on continuing to leverage technology innovation and really rethinking how we work to ensure that we can continue to deliver effective and responsive services.

Next slide, please.

Chair Chen, you asked for this information about how our budget has changed.

This slide shows this based on the mayor's budget instructions.

We reduced it a total of nine positions.

Seven were on budget, two were off budget.

Those two were supported through the government operations recovery initiative, which uh you've heard uh several speakers prior to me speak about that.

Uh the reductions are in addition to the attrition savings that's already incorporated into our budget.

Um it also reflects a $1.5 million reduction in workers' comp claims expenditures.

I just want to caution the committee that does not mean that medical expenses are going down.

It's simply a reflection of uh projection of our current uh claims rate that we're facing right now.

Um the other changes include a one-time increase to support next year's bargaining activities.

We're gonna be negotiating 27 labor agreements.

That work is already beginning to start, and uh we're preparing um for very intense year.

Um additionally, we have funding to support public safety exams.

Um this is a critical component of the city's effort to recruit and fill essential public safety functions, and we have a small expansion of the city's fellow programs, increasing the number of fellows from eight to eleven.

Uh we value this program a lot, even though it is small.

It really helps us to build our talent pipeline and pathways into public service careers, and finally the five positions that are being transferred from DPH that I previously discussed.

Uh, next slide, please.

Uh thank you, Chair Chan, members of the committee for your partnership, your support that we have enjoyed over the years, and to our whole DHR team.

Uh my cotter here to my left.

Our chief financial officer and uh Sophia Kittler and her whole team, along with the budget and legislative analysts for their work.

Um we have a very cooperative relationship and uh understanding one of the pressures that our department is under to deliver the services that all of you demand.

Thank you.

Thank you.

Just a quick question.

Are your seven positions that you eliminated?

Were they vacant?

Not all of them, no.

So you have layoff.

We did, yes.

How many?

Uh two, one permanent civil service and one uh project position.

Thank you.

Sorry, so two out of the seven, correct?

Thank you.

Um, you have a lot of work to still go through for next year.

Yes.

Thank you so much.

Thank you, madam chair.

Uh, with that, we will go to the next department is Department of Elections.

Give us a second here, please.

All right, good afternoon, Chair Chance, advisors, John Arms, Director of Elections.

So the mission of the Department of Elections is to conduct free, fair, and functional elections in San Francisco and provide equitable access to voting services.

To support this mission, our key objectives include delivering accessible multilingual and equitable voting services, ensuring compliance with local, state, and federal election laws, promoting public awareness and voter participation, maintaining accurate voter roles and election related data to strengthen public trust.

Over the next two fiscal years, we will conduct two elections, the upcoming November uh consolidated general election and the March 2028 presidential primary election.

Our budget ensures that we provide accessible, secure, and reliable election services in each of these elections.

The department's proposed budget is $22.1 million dollars for fiscal year 26-27, consisting of $23 million dollars in expenditures offset by $900,000 in revenue.

For fiscal year 27-28.

The proposed budget is $23.2 million dollars with $23.6 million dollars in expenditures and four hundred thousand dollars in revenue.

These charts show the allocation of the department's proposed expenditures, and really the number of ballot cards, the number of pages in the voter information pamphlet, and uh personnel costs are the main drivers of our budget.

In response to the mayor's budget instructions, the department uh considered statutory requirements, operational necessity, and the potential impact on the delivery of services to voters.

Core operational services were identified as programs required by election law, those necessary to administer elections and provide essential voter services.

Examples include voter registration, vote by mail ballot administration, polling place operations, election worker recruitment and training, and post-election canvas.

Strategic programs were identified as initiatives that improve operational efficiency, voter access, and public engagement.

Examples include language access initiatives, accessibility improvements, technology modernization projects, and digital service improvements.

Discretionary programs were identified as activities that could be reduced or delayed with the least impact on the department's ability to meet its legal obligations and core service requirements.

Examples include outreach grants, pilot projects, equipment replacement schedules, or other enhancements that are not legally mandated.

But it will say that we didn't cut any programs during this budget cycle.

This slide illustrates the department's organizational structure.

For fiscal year 27, the department's staffing level will decrease from 36.5 to 34.5 FTE positions with an attrition rate of 2.6 FTE positions.

Of the 34.5 FT positions, three or nine percent are solely management positions.

In addition, the department employs hundreds of temporary employees uh to support its operations during each election cycle.

And finally, the department is committed to conducting free and secure elections while keeping our operations efficient and ensuring equal access for all voters.

I want to thank the both the mayor's office and the board of supervisors for their continued support for the department's for the department and its mission.

I'll be glad to take any questions.

Thank you.

Supervisor Walton.

Thank you, Chair Chan.

Thank you so much, Director.

I just want to say I think that was a great example of a precise to the point presentation.

Thank you.

Thank you so much.

You're welcome.

Thank you.

And with that, thank you so much for your work.

We appreciate you.

And we will go to the controller's office.

Now I think that's a hard act to follow.

Before that controller joins you, um, I'll just speak briefly to Jen, General Sense of City Responsibility, which is a department in our system which um handles everything that doesn't belong to a specific operating department.

So it's where we put all of our tax revenues, and it's from which we pay all of our citywide obligations, like general obligation bond debt, all of the baseline requirements that the voters have mandated, and certain like general citywide costs like all the retiree health for all uh general fund departments.

Um most of what the department does was actually covered this morning by Carol Liu in the revenue letter, and um I'll just leave it at that, and you can check this department off of your list.

Okay, Chair Chan, uh, members of the committee, uh Greg Wagner, uh controller.

Uh we'll try to be uh brief and concise.

Uh we're pulling up slides.

We have additional um slides that we won't cover verbally uh but that are available for you all uh particularly in uh response to requests from the uh chair.

Um so uh very briefly, I think you're uh familiar uh with our mission, but it's to ensure the city's financial integrity and promote efficient, effective and accountable government.

Um our department has uh 10 divisions.

Four of those are uh voter-mandated divisions, including the Office of Economic Analysis, City Performance and Audits, which together make up the city services auditor function funded by a voter approved general fund set aside of two tenths of one percent, and the refuse rates administrator.

Uh we also have uh divisions that provide core financial support to all city departments, including accounting budget analysis, debt, payroll, uh and HR systems, and then finance and admin support.

Uh our budget uh kind of by size.

Uh, our largest divisions are the city services auditor divisions that city performance and audits combined.

Again, those are funded by a general fund set aside in the charter of two tenths of one percent uh percent uh and provide services to uh departments.

Our second largest division is our systems division, which operates the enterprise uh financial uh and operating systems for the city.

So that's a service that's provided to all departments and is the backbone of our financial management and reporting, which comes to this board, and then uh beyond that accounting and other financial operations in our in our department.

Uh this has been a challenging uh budget year for us.

Uh we do have a significant number of position eliminations in our budget, uh 12 FTEs ongoing.

In addition to that, as we've discussed in other contexts today, uh there's an assumption of salary savings in year two of our budget totaling uh 2.1 uh million dollars.

Um so we'll be uh work working to manage through that over the coming months.

We do have some uh growth in our funding that is largely due to uh contracted costs in our our primarily our systems uh function, and then some quite funding, which I'll discuss uh briefly.

Our budget uh is going to stay uh in nominal terms about even uh so we remain at about 86.2 million dollars.

However, when you factor in, of course, increases in uh wages benefits, other inflation, flat to stay flat requires reductions, and so uh although we're flat, we have uh made reductions.

You can also see, I'll just point out here a change in our general fund support, which of our 86.2 million dollars by fiscal year 27-28 will be 11.5 million dollars or only about 13 percent of our total budget.

So the majority of our budget comes either through our set aside funds or through uh work orders or billing of external revenue sources uh that support the work that we do in our department.

So lastly, um I'll just say again it's been a challenging year.

Um we uh are always committed to doing the most and the best that we can to support the legislative branch, the executive branch, and all of our part uh uh department partners, and we'll continue to do our best.

Uh there will be a strain uh with the reduction of resources.

We're very thankful to have uh quite funding recommended for automation of our financial reporting, an update to our business intelligent intelligence platform uh that all departments use, and a training real-time training uh function in our PeopleSoft financials.

So we are grateful for that as a way to um uh improve services.

Uh so I will uh leave it at that again.

There's an appendix in this presentation that has a lot of the specific data uh requested, but I know you have a lot on your plate today.

Thank you.

And uh just a quick questions about the 12 FTEs that was eliminated, um, were they vacant?

Not all of those were vacant.

Uh we did have seven uh positions that were eliminated uh that have uh that are not vacant, including five permanent positions and two exempt positions.

Thank you.

Supervisor Walton.

Thank you, Chair Chair.

Controller Wagner, you mentioned having to reduce to stay flat or practically flat.

Do you imagine having to continue that practice even beyond the next couple years?

Um thank you for the question, Supervisor.

Um, I think uh my my kind of the point I was trying to make there is kind of generally true of the city uh where we have um our underlying financial picture is that our our costs are increasing, and that's true throughout the economy.

Uh so as long as our revenue is growing at a slower rate than our expenditures, which has been the case.

Uh I do anticipate that in order for us to stay at a level expenditure level uh we would have to continue to reduce costs uh in order to stay in a flat budget.

So different question is that gonna be problematic for your office to not be able to grow at all.

It is gonna be problematic, yeah.

It is definitely a challenge.

It's been a challenge uh with staffing reductions, and um, so I will just put in a plug for the incredibly committed and competent and dedicated team in the uh controller's office.

Uh there they do a lot uh and we're often being asked to do more.

So it is definitely a strain to try to continue to provide the level of service that we expect uh with uh reductions in our budget.

Thank you.

Thank you, controller.

We appreciate you and your team greatly.

Truly, it is true that we always just call on you to problem solve whenever it's necessary, but also recognizing that you are you also now have the inspector general units under your shop, recognizing that is another additional cause that is mended by the voters.

Um so we understand the the challenges.

So thank you.

Thank you.

And with that, the next department is human services agency.

Or maybe not.

If not, then we'll go to ethics.

It's like, wait, no one's ready.

Should we go on recess?

No.

Then let's go to then let's go to public works because public works is here.

I see Bruce.

Sophia, you gotta let Bruce come up along with Carla.

Where's Carla?

Bruce, is your up you're up?

I don't know.

Sorry, but meanwhile, this is interesting.

Brent, do you want to check?

Oh, Mr.

Clerk.

I was like, wait, Mr.

Clark, please check to see human services agency.

I'm reading this right.

Ethics Commission.

But go ahead.

Uh supervisors, um, we were under the understanding that the Human Services agency and the ethics commission were before public works.

And I have will eminently do a quick text to my director who is watching that she is on her way.

I think we either misunderstood the order or the order changed, and we weren't aware of it.

I'm just calling whoever that's here in the chamber.

Um, um, Madam Chair, uh, I will confirm that on our published uh hearing calendar, uh both HSA and Ethics are scheduled for today.

Oh, and I see Mr.

Roar walking in right now.

There you go.

Huh?

I want to say, Director Kittler, you cut everything, so you went hi everyone.

Sorry we're late.

You went through three departments by the time it took us to walk here from 14 55 markets.

So nice work.

All right, I'm out of breath, but I'm gonna start anyway.

Uh Chair Shann, members of the committee, Trent Roe, Executive Director, Human Services Agency, and we'll queue up the slides.

Here we go.

Thanks, Saya.

All right.

So given that we have five minutes and we've already exhausted about a minute of it being late, I'm going to be uh uh brief, but I'm gonna I'm gonna focus certainly, Chair Shannon on your questions, but I really want to focus most of my presentation on the changes that will be in our budget, both the reductions in order to meet the uh mayor's budget reduction target and then the augmentations that are in our budget around HR 1.

And I will stay within our time limit.

So first slide.

Um, as you know, the human services agency is two departments.

It's the Department of Disability and Aging Services and the Department of Benefits and Family Support.

And broadly, as you know, the human services agency provides aid support and protection to low-income children, families, single adults, older adults, disabled adults, veterans, um, our immigrant community and others through the Department of Benefit, Family Support, and DOS, and are supported administratively through the Human Services Agency.

Next slide, you're all familiar with our program, so I'll quickly walk through the next few slides.

This first depiction of our budget shows our 1.38 billion dollars broken down by program.

You can see the programs there that benefit each of the populations I just walked through.

On the next slide, you can see where we're spending our money.

About 42% of our 1.38 billion dollar budget is spent on client aid and support to clients, such as foster care payments, uh cash assistance to our single adult populations through our county adult assistance program, our IHSS wages are depicted in that 42%.

The next big area of course is going to be um employees, there's salary in fringe, which is about thirty-two percent, and then the third large area of spending is for grants to our community-based partners, which represents about sixteen percent of our proposed budget.

Um, as you know, HSA is not entirely supported by the general fund.

Because we administer federal and state programs, uh we are funded to administer um administer them, and and generally the breakdown is it's about a third of our budget comes from each source.

It's a it's a little different this year and and actually over the past year or two, in that the state is actually now contributes a little more than uh the state has historically.

About 27% of our budget comes from federal sources, about forty-one percent is state revenue, and the remain remaining third or thirty-two percent actually is um the the city's general fund.

That totals about four hundred and forty-two million in our proposed budget.

But the nature of our general fund is is different than most general fund departments, in that it n not very much of it is considered discretionary.

Some of our general fund um are is set aside um whether it's a ballot initiative or or something else, and things like the dignity Fund or the county adult Assistance Program Care Fund.

A lot of our general fund uh is basically required local spending in order to draw down the federal and the state revenue, either legally required shares of of costs of administration and benefits or matching requirements in order to draw down that money.

And so when you we after you sort of sort out those two big buckets, we have about 60 million or so left that would be truly discretionary.

And so when we get a budget reduction target, that's the bucket we're we're reducing from.

Um this next slide is just the very, very high level organization org chart for HSA.

Chair Chan, to your questions about staff uh breakdown managers, vacancies, et cetera.

Uh in our proposed budget, we are proposing 200, or excuse me, 2,442 FTE, of which about 4%, a little more than 4% are managers.

The number of managers in our proposed budget is 102.

We currently, you know, the numbers are actually as of I think the end of March.

Uh 185 vacancies of those 185 vacancies, 75% of them of those positions have been vacant less than a year, and almost 60% have been vacant for less than six months.

Our vacancy rate currently is about 8%, which is our regular rate of attrition.

Um, okay, now to the budget reductions.

I'll spend a little more time on this slide.

So our budget reduction target was 10.5 million dollars of general fund.

And we got there through uh a number of cuts, both to programs under uh the Human Services Agency as well as under Department of Benefits Family Support as well as DOS.

We did have some guiding principles when looking at these reductions.

The first is it and always is to preserve our core services.

The second is to maximize revenue opportunities, meaning we don't want to reduce uh or or make budget cuts that are gonna leave a lot of federal or state money on the table.

We want to, of course, minimize the negative impact on clients and on our staff.

And look at efficiencies through whether it's a cost benefit analysis or looking at alternative resources other than the general fund or existing general fund resources that could perhaps um uh meet some of the need due to the to offset the reductions.

So in this table, you'll see the reductions.

Um we are proposing to reduce some grants uh in our employment and training area.

Um a lot of the reductions are due to changes in state mandates, which um don't require us to fund certain initiatives related to the work participation requirements in CalWorks.

Um, and then um we're proposing to reduce uh specific employment training um uh to homeless individuals, um, really sort of along the lines of having those specialized population um training programs be woven into the existing offerings in our workforce development division at HSA.

We're proposing to reduce our program that provides temporary assistance for displaced persons due to fire generally.

We're proposing to change the lifetime subsidy support from two to four years down to one year from the date of the lease that they sign.

Current program, it's two years from the date of the fire, the date of the incident, and then an option to extend for another uh one or two more years.

Uh a small reduction in CAP uh aid support, which really is a byproduct of our savings due to discontinuances for individuals that fall under the Prop F treatment mandate.

And so that uh those reductions in aid will flow to support the treatment services provided through Prop F, and then the general fund that supported the treatment prior to this proposed budget would revert to the general fund as savings.

And then we're proposing to eliminate 31 FTE, uh of which 19 are filled.

And Chair Chan, in anticipation of your question, of the 19 filled positions that we're proposing to eliminate, 10 of them uh were reassigned into different uh same classification, different positions within HSA.

Um, an example, we eliminated uh a unit of eligibility workers in our county adult assistance program.

They moved over to fulfill eligibility worker roles in our um SF benefits net or Medical CalFresh divisions uh in response to HR1 mostly.

And then nine of the positions entered the citywide layoff layoff pool.

I will pause there and hand it over to my colleague, the Director of Disability and Aging Services, Kelly Durman.

Good afternoon, Chair Chan and members of the Board of Supervisors.

My name is Kelly Dearman.

I'm the executive director of the Department of Disability and Aging Services.

Before I present my two slides, I just never want to miss an opportunity to publicly thank all of the staff at DOS who work tirelessly every day on behalf of older adults, people with disabilities, veterans, caregivers, and their families.

As the population continues to age and grow, our work becomes more critical.

As you know, this is our second year of cuts to discretionary funding, which impacts services.

Last year, DOS reduced over 2.5 million dollars in CBO contracts and nearly $800,000,000 through contract attrition.

Did I say $2.5 million?

Because I'm sorry.

Guided by criteria such as leveraging state and federal funds, pausing new programs, right sizing budgets based on spending and reviewing performance.

This year we looked to do similar things, but unfortunately, those efforts did not get us to our target, so we had to make deeper and harder choices.

This slide shows the criteria we use to make those choices.

So first, we want to protect and maintain core services.

These are primarily dictated through the older Americans Act.

These services like community centers, case management, and meal programs.

Some of the services that were reduced or eliminated achieve the same or similar outcomes as the core services, but not at the same scale, where a cut to a core service impacts significantly more people.

Also, it was hoped that the people impacted by some of these reductions could be referred to the core services that are still in place.

Second, we reviewed areas of budget growth over multiple years, and again with the idea to maintain services but trim services back to their core.

Third, we assessed our pilot programs.

Piloting new programs has allowed DOS to test innovative ideas and learn what resonates with the populations we serve.

During this budget process, we looked at pilots through the lens of outcomes, funding resources needed, and whether it was a core service or a valued service, but not core.

Unfortunately, the really nice to have valued service wasn't always an option as we looked at our budget target.

Then we also looked at expiration of one-time funding.

In good times, we've had the opportunity to continue programs through local funding.

For this budget year, extending funding would potentially mean cutting other funding.

Similar andor overlapping services also became a key criteria for us.

Again, it wasn't that the services being reduced didn't have value.

They do have value, but it was more looking to see if other similar services were available.

It's also important to note that DOS services are very popular and have demonstrated outcomes and impacts in the community.

We have strong dedicated partners in the community, which is made for very difficult decisions.

As to the position deletions, we reduced uh administrative support by two clerks in our APS and Rep Payee programs, and we did a position substitution in our O922 Office of Community Partnerships Manager position.

We've subbed that down to an 1824 principal administrative analyst.

Next slide, please.

So this is about the dignity fund.

The enacting legislation that governs the dignity fund changes the methodology by which growth is calculated in fiscal years 2027-28 through 2036-37.

Beginning in fiscal year 2027, the city's annual contribution to the fund will equal its mandatory contribution for the prior year, adjusted by the percentage increase or decrease in aggregate city discretionary revenues, as determined by the controller and announced in March updates to the joint report.

According to the controller projections, in two of the next three years, we will have a deficit.

We have spoken with other departments who use the same formula, including DCYF, the Library and the Arts Commission, who have all said we need a stabilization reserve to prevent mid-cycle and mid year cuts.

So while we are grateful that we will receive the $3 million growth funding this year, our plan is to use it as follows.

First, as I just said, the stabilization reserve, which is 1.1 million dollars.

Also, cost of doing business for those programs that were not that are not going to be covered, and those are some state programs.

And to sustain baseline funding for core services.

These are programs that need shoring up because the state funding is ending, and we no longer have any one-time only funding.

So we need to baseline these core programs to prevent more cuts.

Lastly, we're allocating a small amount to HIV aging services because, like you all, we recognize that the HIV population is aging, and in fact, 70% of those living with a HIV are older adults.

In an effort to be responsive to a developing need in the community, we will work with DPH and MOHCD to create pathways to DOS and to brought and to provide culturally appropriate training.

That's all I have.

Thank you.

Thank you, and Vice Chair Dorsey.

Thank you, Chair Chan.

I wanted to um if I might pick up on that final point you made about older adults who are living with HIV and the number that's expected to double.

And I will say I know that this is a population that faces complex in some ways, you know, unknown needs.

If I if I understand correctly, there were three uh LGBTQ plus programs for older adults, and two of them were cut.

Um, the Stepping Stone Health and Curry Senior Center.

So I just wanted to ask if can you elaborate on the new HIV aging investment that's part of the dignity fund and how the department is planning on the to address the growing needs.

And that may also be um because you also mentioned that there's other departments, so is the need being picked up elsewhere.

I just want to get some clarity to help you understand that.

First, thank you for the uh the question.

Um, I want to speak to the other the two other LBGTQ plus programs.

So um, one is adult day health centers.

They're licensed community-based day health programs funded through Medi-Cal primarily via community-based adult services.

So the reduction there ends a pilot program started in July 2022, which offered enhanced programming to adult day health center participants, which the idea to design to create a more inclusive space.

So ending this pilot program should not reduce the number of clients in the adult day program, nor should it lead to fewer LBGTQ plus program opportunities.

Uh, they should continue to continue to have culturally competent programs.

And I just want to add that we also just renewed our grant for legal assistance to the elderly and AIDS legal referral for life planning for the LBGTQ population, which we know is really important now.

In the second program, we did make a hundred thousand dollar reduction in uh mental health the mental health connect program.

It still remains a $500,000 grant and has been reviewed for two more years.

The adjustments to the grant should not result in reduced mental health services.

The reduction was for uh the digital divide, so training on digital connection, which has not been as critical as the Mental health connect program.

And additionally, for help with digital connection, that can be accessed through SF Connected, which is a core service.

So that's for those two programs.

And then as to your initial question about the $150,000 that we're using to develop a clearer like roadmap for folks with who are using DPH or who are using MOHCD and where we fit in with that and how we can fit in and how we can refer folks to other services, and also to do some training on culturally competent programming.

Okay.

I mean, I assume that it's your department that takes a look at where there are service gaps.

Yes.

And then works with other departments.

Well, that's the hope, yes.

What gaps do you see in the current infrastructure now?

Well, that's a very interesting question, and I'll just say I think what has happened over the last year or so, is that those gaps are not as wide.

I think with the mayor's office and the and the various chiefs, we're all working to be more transparent and work more collaboratively together.

So I think whereas before there might have been a wider gap between us and DPH or us and MOHCD or Wreck and Park, those seem to be closing because we are meeting more, sharing more, and figuring out where you know these where people are not being served.

I will also acknowledge that we just completed our dignity fund community needs assessment, which also gives us a deep look into where folks are underserved.

Okay.

Thanks.

Thank you.

Supervisor Sauder.

Thank you, Chair.

And thank you for the presentation.

Can you um you started, but could you speak a little bit more to some of the rationale with the dignity fund and how you came to um this set of uses and why you arrived here versus more focus on restoring cuts, for example.

Right.

Okay, so I think one, it was really important for us to know that the funding formula is changing, and we don't want to have a situation two years from now where the projections that the controller put out become real, and in fact, we are going to have to cut some programs mid-year or mid-cycle.

As a result of that, we knew that it's really important for us to have this stabilization reserve to make sure we have the proper funding for the whole dignity fund now.

Um so that's why we chose that one piece.

And then with the other programming that I mentioned, where there is no longer any state pro state funding, or there was one-time-only funds being used, which in the past we have been able to use year after year.

Um, since those are no longer available, and the programs that we were looking at are core services, we knew we had to shore those up to uh also prevent cuts, which means fewer people are being served.

The other uh the issue around that is that we knew after we had to make those those decisions around that amount of money, it was going to be very difficult to determine then from the cuts that we made who is more worthy.

All of the programs are worthy, all of them are adding a valued service, but for us, we had to focus on core services as defined by the older Americans Act, and this is the only way we're able to do that.

And and I see, you know, a good portion of the allotment goes to a reserve.

Can you tell me more about that reserve?

Is it a a DOS specific reserve, HSA?

Where does that go?

Stand by one second, please.

I was doing really well.

Thank you, Supervisor Cindy Kaufman, Deputy Director of Department of Disability and Aging Services.

We are trying to wrap our arms around exactly what the ADR is, and I know there's budget people behind me that can possibly answer it better than I can.

It is not specific to DOS, there are similar reserves, is my understanding with other departments, which is why we we reached out to library to DCYF Arts Commission to see how they handle this, and it is based on revenue.

And so as the revenue increases, there is a percentage based on the dignity fund that will grow.

If the revenue goes down, then it is a decrease.

And so our understanding is for these types of funds in most years, we have to also cover COD B.

The first two years, it is being covered with the exception of what um uh Director Dierman pointed out.

So this is where it is to ensure we are covering current services and grants as well as the COD B as we as it gets projected out.

It is a projection, it does change.

What we have now, baseline for the stabilization fund was based on current projections looking at the next three years where we would not necessarily be able to cover.

So that is what that is based on.

Thank you.

I yeah, I want to acknowledge the controller.

Uh thanks for thanks for acknowledging me.

Um just to clarify, the ADR refers to aggregate discretionary revenues.

That's a metric that we use to calculate the growth in many of our baselines and set-asides.

Uh this fund has been a little bit different in terms of the language uh that the voters approved, where there is more of a fixed predictable uh rate of growth.

Uh but once your uh set aside or your baseline is determined by aggregate discretionary revenues, it will move up or down with revenues over time, and is uncertain like other uh other elements of the budget.

Thank you for that.

Supervisor Walton.

Thank you, Chair Chair, Director Roar, just a quick question.

With the 2919 class, those positions that were laid off, will there be no more child care provided for um our families that are being served?

Yeah, thank you.

And where did they go?

Thank you, Supervisor Walton, Trent Rorigan, Director of Human Services.

Um, correct.

The the three uh child care uh providers, drop-in child care providers, they're at three different drop-in sites in our offices at on Harrison Street, Otis, and then in the mission.

Um, yes, we basically would be ending that drop-in child care service um moving forward if the reductions went through.

We did a examination of the utilization of the three drop-in sites, and it was averaging about nine children.

Um, let's see, I think it was nine children per day at each site?

Eddie uh overall.

So nine children at using the three sites overall.

Um the the total uh program is let me make sure I get the numbers right.

It's close to six hundred and fifty thousand dollars.

When it when we broke it down to um the number of hours in a day, the number of days the drop-in chakra were open and the utilization, it was about um three hundred and seven dollars uh per hour.

Is that correct?

Yeah.

So again, I said one of our budget frames was looking at sort of a cost benefit analysis because of the other channels that we offer our applicants and our recipients to access our services, whether it's online or through the phone, there's less less need to come in person.

And so we're just we're seeing a decrease in the number of families bringing their kids into our centers, and so when you look at our 3120 mission site, as an example, it's our lowest um used drop-in center.

There are days where we have no kids, yet we have a full-time um drop-in child care supervisor there.

So we just felt that given that lower utilization that that the six hundred and fifty thousand or so dollars could be moved towards a reduction.

And where where are they going?

I'm sorry, the ones that were laid off.

Where are they?

Um I believe they're in the citywide layoff pool, so that's up to DHR and how that's going to work across the city.

And what happens if the trend changes?

I'm sorry.

What happens if the trend changes?

If the what changes?

The trend.

Trend changes.

I thought you were saying, train changed.

Um if we saw utilization dramatically increase or we had a lot more children come through, then we would, you know, reassess um what we're currently doing.

Uh I don't anticipate that happening.

Just again, given the number, the volume we have of um existing clients and applicants who call in to our service centers, we average close to fifteen hundred calls a day.

Um and people are really are just using those those different uh channels to access our services.

All of our documents now can be uploaded through the um benefits portal that uh through the state system that goes into our county, and just sort of I think easier for families to navigate that than you know bringing their kids to one of our one of our three offices.

Thank you.

Sure.

Um just kind of curious, what is your current vacancy position?

How many do you have any vacancy position?

We do.

Um you mean within that classification or overall supervisor?

So overall.

Yeah, it's uh I believe our current number of vacancies is 187.

So you're 187 of vacant positions, excuse me, 185 as of the end of March, yes.

Um so yeah, 185 vacant position.

And then what is your attrition rate right now as it currently proposes?

About eight percent.

What is it?

About eight percent.

Eight percent?

Eight percent is our attrition rate, yeah.

Yeah.

Again, sort of our natural turnover, as I said in my presentation supervisor.

About 58% of those 185 vacancies have been vacant less than six months, which is sort of a normal pattern of um you know, someone either re being promoted or or resigning and then moving towards refilling the position.

And one of the dynamics, I think it's not unique to HSA, but it certainly is is common, is positions are filled um through promotions.

So uh an eligibility worker, very common for an eligibility worker to apply for a eligibility worker supervisor position.

So right, so they would fill that vacant position, yet the net right reduction in vacancies is zero because they create a vacancy by moving into that supervisorial position.

Just given the nature of how our department is structured organizationally, there's a lot of those promotive opportunities from general clerk to senior clerk from protective service worker to protective worker supervisor.

We have our analysts from 1822s up through 1824 or 25.

And so we encourage hiring from within.

We think it's good for organizational culture and and consistency in a mission-driven organization like ours.

Um, but the result is that it's sometimes hard to move that number of vacancies down, even though month to month that 185 or so represents a different 185 or part of that 185 is different.

Sure, I mean it makes sense.

More than 2,000 FTEs.

We have we have 242 proposed FTEs for right for um by ratio.

I'm I'm not questioning.

I mean, I think the deletion of 30 FTEs, 31 FTEs makes sense.

I'm just trying to understand if you have 185, and even though out of which 50% of it is six months within six months of vacancy, so you have a roughly about half of that, like just say I don't know, 80.

It's 58% less than six months, it's seventy-five percent less than a year.

Uh less than a year.

And then so with that decision that you were asked to for further reduction, you decided to have 31 FTEs out of which 19 of them uh were filled of that out of that 31.

Is that correct?

Or is it right?

That's correct.

And then out of that 19 of FTEs, 10 you reassigned.

Correct.

And nine were technical layoffs, the individuals that were that went into the citywide layoff process, that's correct.

Yeah.

You know, I I should say that we in looking at the the directive to reduce uh positions from the from the mayor's office.

Um we didn't just look at vacancies.

You know, I I often we we get tripped up in in thinking that um the length of a vacancy is a proxy for need of the position, and generally it's not.

Generally, the lake length of vacancy, there's a lot of other factors going on.

Whether the civil service examination needs to be done, whether we get approval from the mayor's office and DHR to fill.

There's a lot of sort of circumstances that cause vacance positions to be vacant for a long period of time.

What we did in the exercise of identifying positions to eliminate is the exercise that we did for the child care supervisors as an example that Supervisor Wattenbrook broke up.

$305 an hour for care seemed way out of bounds from sort of the industry standard, and the utilization of child care was much lower.

It's very unfortunate those positions happened to be filled in addition to a supervisorial position over them, which was also eliminated.

Um but in terms of sort of good government and looking through a lens of good government, um, I think it makes more sense to eliminate positions where there really is much less of a need than positions that are vacant where we have a big need.

Like we we have 50 or 60 vacant eligibility workers' positions that will be hired to address the HR1 needs, but I'm not going to eliminate an eligibility worker position in CalFresher Medical because we know we're gonna need them, even though they're vacant right now.

So that that's sort of an example of how we approached it.

We we eliminated, for example, um telephone operators because we can people who call into our agency can be directed automatically.

We don't need physical people to do that anymore.

Um we eliminated a uh an account clerk that handled the fast pass um lifeline fast pass, the reduced fee fast pass for low income individuals and seniors, because now that's an automated process, so that MTA does, and they don't need us.

So I can go example after example, but that's really kind of the lens we looked at supervisor, um, which is why we only came to 31.

You know, of 2400 or so FTE, we figured, you know, among that, and two of them were manager positions, um, that we eliminated again, sort of span of control, a bit of a reorganization, adding some responsibilities to some managers and and trying to do it um, you know, with as minimal harm on actual city employees as possible, you know, and but that was the balance we looked at.

Thank you.

Uh I don't see any other name on the roster.

Thank you so much for our presentation today, and thank you so much for the work.

Absolutely.

I think we're also grateful for your team.

Um, when last year, when Trump administration cut foot security programming like SNAP, your team actually was there uh in the uh fast turn around and be able to provide um that support.

We are we're very grateful.

Thank you.

Thank you, supervisor.

And again, uh apologies for being late.

Thank you.

Um, and the next we have the ethics commission.

Thank you, Chair Chan, and members of the committee.

Uh for the record, I'm Pat Ford, executive director at the ethics commission.

Um, have a set of slides to uh that discuss our current um budget that's before you for consideration.

Um before I get into that, a brief recap of the program areas and programs that the ethics commission administers.

Uh we have a number of program areas, not just ethics, but also campaign finance, lobbying uh activity by major developers, campaign consultants, um, number of different program areas, and within all of those uh we conduct compliance activities like training, giving uh advice to people about how to comply with these rules, publishing uh informational material so that people can learn about the rules.

Uh we also operate a number of complex disclosure systems, electronic disclosure systems such as the Form 700 or campaign finance disclosure systems.

Uh we also have a very robust enforcement program as well as a robust audit program that audits campaign committees, and we also do policy development with city departments to help them uh align their programs with city and state ethics rules.

Uh to highlight a few of our major achievements in FY26, uh we've continued to uh establish our KPIs, or the mayor's office uses the term OKRs, but essentially our metrics that we use to track and monitor our progress.

Some of the major ones here, we've continued to advance major investigations.

We've made our investigation process much faster.

We can measure that now very effectively.

Most of our cases are resolved within one year.

So we have a lot faster resolution time now.

Similarly, I have another slide on this.

Our audits are completed very quickly now.

We've already finished all of the candidate audits from the 2024 election.

We're now working on independent expenditure and ballot measure committee audits.

Auditors are able to also very effectively process contributions that candidates submit through the public financing program.

So we're able to get those funds to the candidates very quickly.

Also on the compliance side of our department, we responded to over 2,500 support tickets.

So that's that advice compliance work that we do.

These are all people reaching out to us asking how to comply with ethics rules, campaign finance rules, what they need to disclose on their Form 700, a truly massive volume of people reaching out to us and seeking help, which is a really good thing.

We want that.

We've tried to foster that within the city organization.

I think we should see this as really good for all of us here in the city and county.

We also processed over 12,000 filings across all of those program areas, which again represents a really good high compliance rate of people filing what they're supposed to file, and then our department doing the work of making all those filings very readily accessible to the public.

So the people of San Francisco, journalists, researchers, they have ready access of state-of-the-art access to this information, and we see it used quite widely in reporting and in studies.

Also, we partnered with the mayor's office this year to help ensure compliance by commissioners and other city officers with the Form 700 filing requirement, and we have a record high 98% compliance rate citywide and 99% within city officers.

I think we only have five who didn't file the form.

So I think we've really reached a great point as a city of getting people to file that form, and that's a lot of hard work.

Just to reiterate our audit work, you can see here in FY26 the completion of all 27 audits of candidates who received public financing in the 2024 election, those are done, published and resolved.

That's as many audits as our office used to be able to do in many fiscal years combined.

We've got a really good program in place.

Now we can get those done very efficiently.

So I think you see that across our office.

It's how we've met a lot of budget cuts over past years, is finding ways to use technology to streamline to automate so that we can do more with less.

We've been doing that year after year and continuing to produce more while having fewer staff.

This slide is about our compliance program.

So you can see the request for assistance, those support tickets broken down by program area.

So a lot of Form 700 questions, which I think reflects our work to get people to file that form and to file it accurately.

And you can see our average response times.

We are very quick.

We get back to people with helpful advice right away because people need this information right away.

And we always ask people how they're finding our service, and people generally report that it's very helpful to them.

You can see here that there's about a 30% jump in people's perceived awareness of ethics rules after they take our ethics training as opposed to before.

So I think we're making progress on helping build confidence that people understand and can follow ethics rules within city government.

So to get into budget, you can see our current FY26 budget and what is in the proposed budget for fiscal year one and two of this budget.

It would represent a decrease in our funded positions.

And on the right, you can see kind of how that looks in the context of the last five fiscal years.

So we do see a consistent decrease year after year.

So this is what I was talking about of us finding ways to leverage technology and efficiency to continue to try and maintain or actually grow our work while losing positions.

I think we've been very successful at that.

Some ways that we have not been successful is trying to wind down underused programs.

We've had a number of pieces of legislation that we've tried to get through the board to try and wind down programs that we know have not been successful and are not widely used, but that represent just a constant drag on our staff bandwidth, haven't been able to make progress on that.

So that's just kind of an example of how it's hard for us to reallocate resources to where we know they're needed when we're statutorily bound to allocate them in programs that are required under city law, and it's very hard for us sometimes to roll those programs back.

To put this also in the context of the city's overall workforce, this chart shows the city's workforce over the current fiscal year, the last three fiscal years hasn't changed a ton, whereas our workforce has changed and continues to change year over year.

This is across mayoral administrations, across iterations of the board of supervisors.

This is a concerning trend, I would say.

We can only go so far with using technology and streamlining programs to try and continue to meet the need of the city to follow ethics rules.

At a certain point, we are just not going to be able to keep up.

If we continue to reduce the size and support of the ethics commission while maintaining a very large city government, it's gonna be very hard for us to be there to answer those advice questions to make sure those online support systems are working for people, that the public can get this information.

It's just gonna get really, really hard at a certain point.

And I would say the same thing is true for our campaign finance program.

Uh, we just see more and more money get spent every year.

I mean, you see it in the news.

Every election breaks new records for the amount of money that's spent.

It's so incredibly costly to run for office or to have ballot measures, and that's a big part of our work.

So again, we see that actually going up and up, whereas our staff is getting smaller, it just makes it really tough.

So at a certain point, I think we're gonna start to feel some real shortfalls, frankly.

So, some of the particular ways I think that's gonna start to manifest in the coming fiscal year, would be um, well, in particular, we're going to lose uh a compliance position.

We lost one last year.

Um, so we'll lose another one in this budget.

Um, we'll also lose an operations position, a peril clerk position.

Um, so some of the impacts that we foresee in this fiscal year would be a specific cut to our compliance work.

In particular, we'll have to stop most or all of our live in-person trainings and just use uh recorded trainings and modules.

Um we probably have to roll back quite a bit of our tailored departmental support.

This is when departments reach out to us and say, we'd like your help to consult as we set up a program to make sure that this is in alignment with ethics rules.

That'll be really hard for us to continue to do.

Similarly, that kind of proactive work to reach out and get people to file the Form 700 and get those high compliance rates.

That's the kind of work that we just won't be able to do if we don't have compliance positions.

Similarly, I think we're gonna see longer response times and just fewer resources that we can offer folks when they reach out to us for help.

We'll still endeavor to answer questions and be there and be that helpful resource, but it's just gonna get really difficult.

Um, so people might wait a bit longer.

There may be some frustration there, they might not get, you know, all the information they were hoping for, and maybe fewer written resources for them.

Um, similarly, it would be tough to pivot on issues where we we see concerning trends as a city.

Um, just for example, the BLA came out with a report last month about Form 700 filing by contractors.

Just a good example of an issue where you know the Board of Supervisors is recognizing there may be an area where we need to do some work on ethics rules to make sure there's transparency.

That's a good example of a place where then the ethics commission would come in, work together with the board with those departments, potentially move a piece of legislation.

Um, that's a lot of work.

Um, it's important work, but that's the kind of stuff that's gonna become very difficult for us to do with the direction that our staff and our budget is heading.

Um, just a quick note: we also have the election campaign fund as part of our budget.

That's the fund that's used to fund the city's public financing program.

Uh, it's kind of an irregular appropriation of that fund where together with the Mayor's budget office, we try and project what we think the needs may be of the program, how many candidates will qualify.

So that's why you see this kind of irregular history of how that fund is funded.

I do want to offer for your consideration restoring the 1823 compliance position that would be eliminated in this budget, basically to ameliorate those effects that I talked about.

So just to make sure that we are able to study emerging trends, to provide those kinds of trainings, compliance resources, work directly with departments or with campaigns that are trying to comply with these rules.

I think it would be good to keep the current level that we have.

If we don't, I think we will start to see, yeah, perhaps not the level of compliance support that we would want.

And this is our current work chart.

And so you can see the two positions with the red border, those are the positions that would be eliminated in this budget.

One of them is filled, as the personnel clerk position.

The incumbent in that position would go to the city administrator's office, is my understanding.

And we would have our personnel payroll functions filled through a work order, existing work order with the city administrators' office.

Otherwise, the 1823 compliance position is currently vacant, and that's the one that also would be eliminated.

So I think I'll leave it there and happy to answer any questions that you have.

Vice Chair Dorsey.

Thank you, Chair Chan.

I wanted to just ask you to elaborate a little bit.

I think you had mentioned that there were responsibilities that you have that maybe we should be looking at legislatively.

Could you elaborate a little bit on that?

That there's things that we might be able to do.

Yes.

So don't involve money.

Correct, correct.

So this time last year, through last year's budget process, we lost one of these 1823 compliance positions.

And at that time, we presented to the board about programs that we think if we were going to lose that position, we would need to cut because we won't be able to support them anymore.

So in particular, the city has a program where major developers are required to register and file disclosures, but only in a very kind of nuanced and specific situation when they give money to a nonprofit organization that then later communicates with the city government about the project.

So it's a kind of very specific scenario.

We have not seen a lot of uptake of that program, both in folks filing those forms and in people accessing them.

So that's one.

We just don't think that's a good value, you know, ROI, that we can use our staffing resources to do other work like campaign finance and ethics.

Similarly, the city has a program that requires campaign consultants to register and file disclosure forms.

And that program was created many, many years ago before the city and the ethics commission had electronic filings for campaign finance disclosures.

Now that we have that and all that information is very easy to parse, it's simple to see in a campaign's filings who their campaign consultant is and how much they paid them.

You can see that now.

I think back when that program was created, I think two decades ago, all of those forms were in paper format.

So it would have been difficult for you to go through them, maybe and see all the campaign consultants that had been hired.

So that I think the city back then thought, well, we'll create a separate program just for that.

So it'd be easy to see.

Frankly, that's just obsolete now.

It's I could show you how to do it in two minutes, how to go in and look through the campaign finance data and see all the consultants.

So again, it's just an area where I don't see a lot of ROI.

I think if we were to eliminate the campaign consultant filing program, that would be a lot less that we had to produce, fewer questions we had to answer, and we could just use those resources to do other work.

So those are really the main uh the main two.

There's also changes to the public financing program, um, some very cumbersome parts of that program, especially the uh individual expenditure ceilings.

We think there's a much faster and easier way to administer those that would not require as much time, both by our staff and frankly by the candidates by the campaigns.

Um, so we think there would be a lot of efficiency savings to moving that to a different model.

Um we think it would have the same policy outcomes, the same effects that it was intended to have, but it would be less costly to the city and to the campaigns.

So those are really the main three, and those are in separate ordinances, but the commission sent them over to the board almost a year ago as a package, and we have not uh had any progress on those thus far.

So they're still on the books, it's still something that my staff has to spend time doing.

It just creates a drag.

It just makes it harder for us to pick up the phone when someone has a Form 700 question or when a campaign is trying to file their 460 and they're trying to ask a really timely question.

Meanwhile, we have so many other programs that we're doing.

Great.

Thanks.

I have a whole different kind of perspective about what you just said, but I'm not gonna say it right now because it's not related to budget, is a completely different policy perspective, to which I believe my colleagues, myself, along with my colleagues, Supervisor Walton, Fielder, and Chen has a very different, we all have a very different perspective along with clean government folks that have been doing clean government campaign work statewide, have a very just different perspective about those proposed legislation.

Namely, I want to highlight one that you just mentioned that specifically it's actually raising individual contribution for $500 to $1,000.

Again, I'm against raising that cap for very simple reason.

$500 is already not easy for many working families to be able to afford to contribute due to any matching and public finance and campaign contribution, let on to raise it to a thousand dollars.

So I just want to leave it like that uh for now, and then uh thank you so much for your presentation today.

We appreciate your work.

Um, I don't see any other name on the roster.

We will go to public works.

Good afternoon, Chair Chan, members of the committee, Carla Short, Public Works Director.

Thank you for the opportunity to present our budget today.

Before jumping into our presentation, I want to thank our budget team for all their hard work, in particular Donna Lee, Victoria Chan, Jennifer Marquez, and our CFO Bruce Robertson.

Public Works is one of the city's primary service delivery departments, and as designated by federal law, we are also first responders.

Every day our employees maintain streets, sidewalks, trees, public buildings, and other infrastructure that residents rely on in every neighborhood.

Our work supports many of the city's priorities, including clean and safe streets, accessibility improvements, housing delivery, economic recovery, and capital project delivery.

As we developed this budget, our focus was on preserving core services, improving efficiency, and continuing to deliver results for San Franciscans.

Just a quick reminder: our current year adopted budget is 428.5 million dollars.

That, of course, is our operating budget.

Our total budget portfolio exceeds 2 billion dollars.

Public works work touches every neighborhood in San Francisco.

In fiscal year 25, we paved 557 blocks, repaired more than 10,000 potholes, constructed over 1,200 curb ramps, planted nearly 1,800 trees, addressed more than 53,000 graffiti requests, and responded to over 163,000 street cleaning service requests.

These metrics represent our core services that residents see and rely on every day.

As we responded to the mayor's budget instructions, our goal was to preserve these essential services while identifying opportunities to operate more efficiently.

Public Works did not wait for this budget cycle to begin looking for efficiencies.

In October of 2024, we completed a department wide strategic plan.

And in December of 2024, we implemented a major departmental reorganization.

That reorganization centralized support functions, streamlined reporting structures, expanded spans of control, and aligned resources with our core missions.

Public Works is both a service delivery department and a central service provider to many city departments.

In addition to maintaining streets, sidewalks, trees, and public facilities, we provide architectural engineering, project and construction management, contracting, and project delivery services that support citywide capital investments and major initiatives.

As part of that effort, we eliminated some management positions and identified opportunities to improve efficiency while continuing to support service delivery and project execution.

Those efforts positioned us well to respond to the mayor's budget instructions.

As requested, this slide shows the department's organizational structure following our December 2024 reorganization.

We are organized into six divisions that support both direct service delivery and citywide project delivery.

The remaining divisions provide the finance, technology, workforce, permitting and communication support needed to deliver those services efficiently.

This structure reflects the efficiencies implemented through our strategic plan and reorganization, which again centralized functions, reduced duplication, and improved coordination across the department.

While PublicWorks has a broad citywide mission, we operate with a very lean management structure, which is reflected on the next slide.

Public Works has approximately 1,935 authorized positions.

More than 96% of our workforce consists of the employees who maintain streets and sidewalks, plant and care for trees, respond to graffiti and street cleaning requests, design projects, inspect construction, and keep city infrastructure operating every day.

The department operates with a very lean management structure, allowing the vast majority of resources to be directed towards service delivery and project execution.

The department's gross vacancy rate is approximately 23%.

However, approximately 100 FTE of those vacancies represent budgeted attrition savings that are already built into the department's budget and are not available for recruitment.

After accounting for attrition, the department's operational vacancy rate is approximately 15%.

Despite these staffing challenges, PublicWorks continues to deliver essential services in every neighborhood while supporting capital projects and citywide initiatives.

As part of our December 2024 reorganization, PublicWorks evaluated span of control, organizational structure, and staffing needs across the department.

During the FY budget, sorry, during the FY26 budget process, we eliminated three management positions.

This proposed budget includes four additional management position reductions.

Across two budget cycles, PublicWorks will have eliminated seven management positions while continuing to maintain core services and support citywide project delivery.

Included in the mayor's budget, the remaining position reductions are primarily vacancies and positions associated with the proposed contracting out of the materials testing laboratory.

Our approach was first to identify efficiencies through reorganization, consolidation, attrition, and vacancy before impacting frontline service delivery.

Again, despite these staffing reductions, we remain laser-focused on maintaining the infrastructure and services residents rely on every day and continue to find efficiencies.

This budget includes approximately 41 million dollars in additional capital funding in FY27 to support paving, curb ramps, and equipment replacement.

These investments help maintain critical infrastructure and support long-term service delivery.

At the same time, this budget assumes approximately 4.5 million in additional attrition savings in FY28, equivalent to roughly 23 additional FTE.

While these savings help address fiscal challenges, they will create additional staffing pressures and make it more difficult to maintain service levels over time.

Public Works is responsible for maintaining one of the city's largest public assets.

Oh, do we keep?

Sorry.

Public Works is responsible for maintaining one of the city's largest public assets, its street network.

Through strategic investment and preventative maintenance, San Francisco has achieved a pavement condition index, or PCI of 75, which remains above the regional average.

Maintaining that condition requires substantial and sustained investment.

As the chart shows, state and bond funding decrease over time, resulting in a greater reliance on local funding to maintain our current pavement conditions.

Investing in maintenance today helps avoid significantly higher reconstruction costs in the future and protects the city's infrastructure investment.

For example, maintaining a block in good condition requires about $60,000, whereas rebuilding a block in poor condition requires as much as $600,000 or more.

This budget includes additional paving and capital funding that will help us continue maintaining safe and reliable streets for residents, businesses, visitors, and all multimodal transportation.

Public Works manages one of the city's most important accessibility programs through the construction, inspection, repair, and maintenance of curb ramps throughout San Francisco.

Today, approximately 79% of curb ramps are in good condition.

However, more than 8,700 curb ramps still need to be upgraded or constructed to meet the city's long-term accessibility goals and requirements.

This budget continues the city's investment in accessibility improvements, including approximately $8 million in FY27 and $8 million in FY28 for Curb Ramp construction and repair.

Public Works works closely with the Office on Disability and Accessibility, ODA, to prioritize locations based on public requests, accessibility needs, and opportunities to coordinate improvements with paving and other capital projects.

While significant work remains, continued investment in curb ramps improves accessibility, enhances pedestrian safety, and helps ensure San Francisco remains a leader in accessibility compliance.

I'm gonna go to 2.5 speed for these next two slides.

For the records, these two slides are provided for reference.

Public works relies on a diverse mix of funding sources to deliver services throughout the city.

More than a third of the funding comes from the work performed on behalf of other city departments, reflecting our role as a citywide service provider.

General fund support remains an important funding source for core neighborhood services, while capital, gas tax, and other dedicated funding sources support infrastructure maintenance and improvement.

This diversified funding structure allows public works to maintain essential services while delivering capital projects and supporting citywide priorities.

The majority of public works budget is invested directly in people in infrastructure.

Nearly half the budget supports the workforce that delivers services and projects throughout the city.

More than one quarter supports capital investments, equipment, and infrastructure improvements, including paving curb ramps, trees, and public facilities.

Together, these investments allow public works to maintain the infrastructure residents can rely on every day while continuing to improve neighborhood conditions throughout San Francisco.

In closing, Public Works has already taken significant steps to improve efficiency through strategic planning, reorganization, expanded spans of control and management reductions.

Today, again, more than 96% of our workforce supports frontline services, technical work, project delivery, and the infrastructure residents rely on every day.

Across two budget cycles, we have reduced management positions, consolidated functions, and continue to absorb attrition savings while maintaining core services.

At the same time, this budget invests an additional 41 million in critical infrastructure, including paving, curb ramps, and other capital improvements that improve safety, accessibility, and neighborhood conditions throughout San Francisco.

Our focus remains on delivering essential services efficiently while protecting the city's infrastructure and supporting citywide priorities.

Thank you, and I am happy to answer any questions.

Supervisor Sauder.

Thank you, Chair, and Director, thank you for the presentation.

I'm happy to see this capital investment in particular in the CurbRAMP program.

I think that's really important, and I know we have some work to do to catch up on that.

Can you speak to the additional equipment here within this 41 million dollars that you intend to purchase?

Certainly.

Thank you, Supervisor Sauter, for that question.

We intend to purchase 10 electric pickup trucks with that additional equipment funding.

I want to emphasize that we have a very old fleet.

Those would replace 10 vehicles that are on average 23 years old and on average have over 200,000 miles on them.

They don't have any of the current safety features that we really want our equipment that our frontline employees rely on every day to have.

We had looked into the possibility of trying to procure some power washing pieces of equipment.

However, we did not have the necessary carb credits that would allow us to buy non-electric vehicles, and there are not electric vehicles available that can support our power washing equipment.

Vice Chair Dorsey.

Thank you, Chair Chan.

I wanted to ask about illegal vending.

I think it's on page eight.

The four four and a half million dollar increase.

Let's see, we will severely impact the ability to clean streets and conduct illegal vending enforcement.

So in my district, um illegal vending is bedevils a lot of brick and mortar businesses all over.

Oracle Park is one where a lot of the businesses down there they need to make their money when the ball games are there, and some of the illegal vending that happens, it isn't just limited to the hot dog vendors, it's also full bars and people are selling liquor, and you know, this we probably presumably not carting anyone.

I mean, it's just illegal in multiple respects.

And I often get hear from different enforcement organizations that there's a multitude of enforcement agencies, ABC for liquor.

I think DPH has some involvement in this.

I think public works has some involvement in this.

Can you elaborate on what you could do with more resources in actually the other places in my district, the uh Folsom Street Corridor and the nightclub, 11th Street during the night night hours, there's a lot of businesses that would love to have sell food there, but they just they've they've given up because we just tolerate this level of lawlessness with illegal vending.

Bill Graham is another one.

I think Market Street and Fourth is what is one where there's just a lot of vending on the street that I think really highlights that most of the brick and mortar businesses are closed.

Um I just don't think it's a good look for an area of downtown that we need to.

I think this is something that we need to focus on.

So could I ask you to elaborate on what resources, what you would be able to do with more resources on illegal vending enforcement.

Sure, thank you for that question, Supervisor Dorsey.

Um our team spends um a lot of time uh addressing, trying to address illegal vending all over the city, and there are very high demand um areas of the city where we end up having the teams have to focus more because we don't have um additional staffing to address illegal vending, we do end up relying quite a lot on overtime for those staff, and it can result in our teams getting really um burnt out of having to constantly cover shifts on the weekends.

We were able to create a swing shift with the additional resources that we got in last year's budget, which has allowed us to cover the evening hours.

Um we've done a lot of enforcement efforts uh with the Port of San Francisco at Oracle and along the waterfront.

Um we do generally try to work as a task force, so as you said, there are a number of different entities that are involved in this enforcement.

We're not alone, DPH does play a role, and they are alongside us when we when we do these enforcement actions.

Um I think the concern we're raising with this bullet point is um the attrition savings that were built into year two are general fund savings, and our general fund allocations go to street cleaning and illegal vending.

So we fear that that built-in attrition savings is going to further impact our ability to perform illegal vending throughout the city.

We have a higher demand, not not less of a demand, as you point out.

So we're just concerned about what that's going to look like in year two.

Is it my understanding that public works also regulates food trucks?

Food trucks are another form of illegal vending where the truck itself isn't necessarily illegal, but it's just operating at a place that is illegal during hours where it's not licensed to be I have again brick and mortar restaurants on the Folsom Street corridor that this is just driving them crazy.

We make small businesses jump through a lot of hoops, and it's infuriating to them that the we are tolerating lawless behavior by people who aren't paying a dime of taxes, presumably.

It's something that I hear a lot about, and I wish I had a better answer for them.

Um I share that frustration.

I wish I had a better answer for you, Supervisor.

It is that same team of street inspectors who also enforce food trucks who are not either who are either operating without a permit or who are not following the conditions of their permit.

And so we are pulled in many different directions, and we we share your frustration.

Okay.

Then separate issue.

I want I know that um I appreciate that there was a presentation here on the public works paving program.

It's my understanding that there was uh elsewhere in my we had a recurring sinkhole, I think, on Well Street in my district, and we we had heard that it won't be addressed until 2030.

And I was encouraged when I saw that the mayor is making some investments in paving or at least you know the uh some of the street repair.

Can I ask is some of the what the the mayor's proposed increases is that something that's gonna put you in a better position to solve some of the issues over the next couple of years?

Uh we certainly expect that it will.

As I noted, um it's much, much more cost-effective to invest in maintaining roads that are already in good condition to keep them in good condition.

But part of our program every year balances the right treatment on the right road at the right time for the right price.

So we do rebuild roads that have fallen into disrepair with the these resources, as well as trying to, you know, do surface treatments that will maintain good uh roads in good condition for the longer term.

I will note um a sinkhole is probably caused by a void under the roadway.

It may be related to other issues, and so the paving program would need to work alongside with the PUC and the sewer program to address um something like that.

That's a bit of a bigger um undertaking to reconstruct.

Great, thanks.

Thank you.

Thank you very much for your time.

Thank you.

And we will now thank you so much for your service.

Thank you so much for your work.

We will now go to um our clerk of the board.

Members of the committee, Chair Chan, I am Angela Calvio, Mr.

Clerk.

I'm here today with the department's administrative deputy, Dr.

D.

Assis, Edward Diazis, um, who maintains the department's budget transparently, efficiently, uh, and maintains the wellness for your uh review.

Five months ago, after consulting, as we do with the board president and all members of the board, we provided the committee a fiscal year 2026-27 and 2027-28 budget with only COLA and LAFCO statutory requirement and a few modest requirements in the outyear 2027-28, required to continue the department's operations.

And this is out of respect for the San Francisco economic recovery and the desire that no employees be laid off, much less any in our department.

But the budget before you today fulfills that expectation.

In just a moment, fearing that my voice may not hold out, Dr.

De Assis has agreed to provide the presentation for your consideration.

For the board's phase of the budget.

Uh he will outline the final annual May LAFCO final numbers and the expected negotiated MOUs for the base wage and benefits growth pursuant to the June 1st.

And thereafter, we'll answer questions.

And before I hand over the podium, I know that we in this department in the legislative branch of government, we all work in a very uh public and high risk environment.

Your board staff, the clerk staff, every day bring pride and good judgment to their work and with each other, the constituents, and it shows and I am eternally grateful for them.

And so thank you, Dr.

De Asis.

Chair Chan, members of the committee, good afternoon.

I'm Dr.

Edward De Assis.

I'm the department CFO, and I'll be walking through you through the rest of our budget presentation.

So slide two depicts the department's mission, the highlights of our core work and our ongoing projects that you've all been briefed on or are all familiar with.

Through all this work, all of our staff have performed exemplary through challenging times and have cornered high praise from colleagues as well as members of the public.

I will highlight a couple of projects of citywide significance that we're working on.

First is the processing of a high volume of assessment appeals that is being received by our assessment appeals board.

Assessor Torres talked about this earlier.

The last two years, the AAB has received 8,000 appeals each year, and it's forecasted to remain high throughout the budget years.

So continuing resources are needed to adjudicate these appeals timely.

The second is continuing work on our new legislative management system.

Currently, we are undertaking the finishing of phase one, which involves validating the functionality of the system and extensive testing of the user interface to make sure that it meets user needs.

We are also working on phase two to add innovations, the heat map, drafting tool, boards and commissions, and public participation features.

As you know, the city can garner revenue from selling this system to other agencies, and we will continue to demonstrate this system to interested parties throughout the budget years.

Slide three provides an organizational chart requested for by the committee.

So now we have 67 commissioners in the department, which has added the workload of the office of the clerk of the board as well as administration of the department.

Slide three provides a historical review of the department's FTEs.

As you know, the department's FTs remained flat for three decades, with the exception of an addition of a fourth legislative aid in each of the office in 2019.

Currently, the department has six vacancies.

One is an assistant clerk in the office of the clerk of the board.

Another is an operations junior management assistant and an 1820 youth commission development and community partnership analysts.

There's also a vacancy for our chief information systems officer.

The CISO position and the operations management position, the assistant position, were recently vacant.

The 1492 we will be hiring to help with testing of the new legislative management system.

We kept the 1820 youth commission position as well as the toll 44 senior HR analyst position, vacant for salary savings.

And we also did the same for a sixth vacancy in LAFCO in the policy analyst position.

Slide four uh underscores the continued challenges uh facing the AAB.

Um, as Assessor Torres talked about earlier, and as I alluded to in our previous slide, the volume of appeals applications uh remains high at 8,000 per year into the current year.

We're forecasting to receive uh over 7,000 applications in both budget years each year, which will add to the backlog.

So presently there's a backlog of 16,000 appeals that need to be adjudicated within the two year deadline.

Um so this slide also illustrates the challenges that are faced by the AAB and also the vacancies alluded to in the previous slide.

So our staff are working harder they're doing more and the vacancies frankly have um eliminated backups that are needed in each department so there's a risk that if um a vacancy isn't filled the our divisions in the department will not have the backup needed to continue operations should somebody go on leave or leave the department slide six um shows the proposed budget for June 1 for the department um the June 1 proposed budget contains all of the budget requests that the committee approved in February those included extending uh three limited term 1406 senior positions senior clerk positions in the AAB to June 30 2029 to help with the high volume process of high volume of assessment appeals a permanent increase to each department's legislative expense account to 10,000 dollars a permanent funding to permanently increase the stipend for board members to 175 dollars per session um an ongoing permanent reversal of cuts to attrition savings so that the department can pay out vacation payouts uh to departing legislative aids in the coming budget year and afterwards and the proposed budget also includes minimum statutory funding for LAFO 446,532 as well as the 4.5% budget for the 4.5% cost of living adjustment for the BLA that's mandated by the by the contracts so one through four were actually approved as one time additions last year so the June 1 budget simply annualizes them and makes them ongoing so that we can maintain department operations five and six are annual requests that we bring before the board every single year for approval lastly number seven is a non-general fund request to appropriate savings in the Prop J outreach fund to continue the charter mandate of publishing outreach advertising so given that the June 1 budget contains all of the requests approved by the five by the finance committee and in light of the city's challenging economic and fiscal outlook which has resulted in layoffs in the departments we're making no new additional requests for June 1.

We're simply requesting that the June 1 proposed budget for the department is approved by the committee with no changes as is I'd like to thank Dan Gontcher of the BLA always a pleasure to work with controller's budget office um Greg uh Chayu as well as layers budget office for the review of the budget and I will I know it's been a long day so I'll yield the rest of my time and we are available for questions.

I don't see name on the roster I don't have additional question we really appreciate all the work that you're doing I cannot thank you enough.

We already approved this budget you went you came before us um to authorize for you to go forward the mayor's office so thank you very much.

Thank you thank you members madam chair and so with that um we will go to public comment and a reminder that we have set public comments at one minute earlier when we start today.

Yes we're now opening public comment for these items five six seven eight nine and ten which includes both the uh interim um appropriation ordinance and salary ordinance as well as the proposed.

Um, we are asking the, let's see, with a particular focus on the departments that presented today, that is the the uh budgets of the assessor recorder, treasurer and tax collector, department of technology, city administrator, health service system, civil service commission, uh human resources elections, general city responsibility, controller, human services agency, ethics commission, public works, and the board of supervisors.

And yes, we did declare at the beginning of the meeting that public comment will be limited to one minute.

And with that, first speaker, please.

Hi, I'll talk fast.

Um, my name is Gabriela Cascianos Rumble.

I was appointed by the rules committee to one of the health equity seats on the Soda Tax Advisory Committee.

I take that commitment and responsibility responsibility very seriously.

That's exactly why I'm here to fight for health equity, especially for all the underserved children of color.

I've noticed a trend after the years of continued disinvestment in them.

Right now, one of the focuses of the mayor's budget is food security, which is absolutely incredibly important.

But do you know what they need in order to eat that food?

Healthy teeth and a disease-free mouth.

Did you know that one in three kindergarteners in the school district has an active bacterial infection in their mouth?

That's what a cavity really is: an infection that creates a hole in the tooth.

And your chances of that increase if you are black API or Latino folks who have historically a harder time receiving care.

A glaring blind spot that I have not heard during any of these presentations is that HR1 is not only changing medical benefits, but completely stopping dental coverage for adults with unsatisfactory.

Thank you much for addressing this committee.

Next speaker, please.

Good afternoon.

I'm Marie Jobling.

I'm a San Francisco resident and leader with the Dignity Fund Coalition and the Community Living Campaign.

While you try to balance your budget, consider the challenges so many residents face.

Please make your final decisions with some empathy and a commitment to fairness and justice.

Imagine that you're one of San Francisco seniors.

That would be about one in every four neighbors.

Nearly half depend on Social Security as their primary source of income.

The average senior is trying to get by on an average of about $1,500 a month to cover rent, food, transportation, utilities, and health care.

In large part, getting by relies on services funded through the dignity fund, not extras, but essential supports.

And for individuals on fixed incomes, access to part-time employment is one of the few options we have to make ends meet.

Uh the mayor says he doesn't want to leave people behind, but he is leaving us behind.

We've heard city leaders say that things will be better in five years to just be patients.

Well, we may not be around then.

We need the city's help now.

So we ask you to delay creating the new dignity fund stabilization fund, reduce the amount of cost of living business that comes off the top.

But thank you, Samuel Jobling, for addressing this committee.

Next speaker, please.

Madam Chair, members of the committee, I'm Janet Crane here to speak to one of the uh senior programs that was cut from the dignity fund.

Um this one is District 2 University, which is a program of Next Village, San Francisco, helping neighbors age in place and uh maintain engagement and uh prevent loneliness.

Um D2U and Next Village between them have been going now for 16 years, and that's an incredibly valuable momentum.

Um we can't express strongly enough how vital these programs are for seniors as the social safety net phrase.

Next village has got that momentum, and in supporting older adults in a to age you place with engagement and resources, we are preventing them from becoming dependent on much more costly senior uh city services.

So please use your creativity to restore these senior service cuts.

Thank you.

Thank you much, Janet Graham.

Next speaker, please.

Good afternoon, supervisors.

My name is Jack Willen Zimmer Jones, and I'm the director at Next Village San Francisco, and we operate District 2 University.

Uh, we take exception to being referred to as a low volume and duplicative program in the Department of Aging Services recommendations.

D2U is not a low volume program.

It was created to respond to a DOS survey that showed that seniors in district two were isolating.

Our programs not only brought those seniors out, it caught the attention of seniors from throughout the city, and it demonstrated an unmet need for social interaction and opportunities outside of senior centers.

Um our social programming takes place out in the community.

Seniors are visible, taking advantage of all cultural, educational, health and wellness programs that the city has to offer.

And it has also become a pipeline to other direct services and direct volunteer services that Next provides that keeps people independent and living in their own homes and out of the city offices where they're requesting higher services.

Finally, may we suggest using reserves to restore funds.

Thank you.

But thank you much, Jacqueline Summer Jones.

Next speaker.

Thank you for your time.

My name is Kate Cookrow.

I'm a D11 resident and a co-executive director of CLC Community Living Campaign.

I'm here to urge you to restore the proposed $500,000 cut to our workforce program, SF Reserve.

The program connects older adults and people with disabilities with subsidized part-time work at nonprofits, schools, small businesses, and community organizations across San Francisco.

Other workforce programs do not fully meet the needs of this population.

Many need a higher level of support, flexible part-time work, and help navigating benefits.

That's why the program exists.

Speaker's time has expired.

But thank you much, Kate Kukra.

Next speaker.

Good afternoon.

My name is Ugo Baldasari.

I'm a native of San Francisco.

I started working here when I was 11 years old.

And a couple of years have passed since then.

But I've now gotten the privilege of working through the Felton Institute to help people get back into the workforce to train them to reestablish their dignity as workers in the community.

For the last three years, I've been working in a back to work program, which is a pilot program designed to help not only seniors but people with disabilities of any age retrain, regroup, and get back to becoming uh citizens, uh earning a living and contributing to the economy.

I was just told two days ago that our program has been cut.

I am looking for work.

Can you help us?

Thank you.

And thank you, Ugo Balsari.

Next speaker.

Good afternoon.

Uh, Kathy Spenceley, Felton Institute.

Um, supervisors, please consider that effective job training and helping very low-income older adults at risk of becoming homelessness, homeless is a solution to the current affordability in our city and the growing safety net needs that are adding to the financial challenges today.

Since 2010, the Felton Institute has been the SF provider of the senior community service employment program CSEP under the National Council on Aging, where for the past two years we have been number one in the country in getting older adults' jobs with U.S.

dollar labor dollars.

A cut to the reserve program will close the only locally funded portion of the successful model that Ugo just spoke about that will leave us in the hands of the Trump administration who wants to cut CSEP across the country.

Please don't leave us in the hands of Trump and please preserve this local model.

Thank you.

And thank you, Kathleen Spence.

Next speaker.

Hi, my name is Marty Garcia, Supervisor Dorsey.

I live in your district.

And I'm also with the Felton Institute.

And I wanted to make a couple of points about cutting this particular program and why it hurts everyone.

So it pays for itself.

I think we heard some of the other speakers talking about every dollar invested in work for in it in workforce training or every dollar invested returns multiple dollars in tax revenue, reduced public assistance cost, and decreased reliance on social services.

The population, the senior population faces compounding barriers.

Adults who are 55 and over, who are unemployed or below the poverty line face age discrimination, skills gaps, and health challenges.

Without targeted support, they cycle deeper into poverty.

The cost of inaction is higher.

Cuts to shift costs to Medicaid, food assistance, housing programs, and emergency services, all more expensive than job training.

These are workers, not dependents.

This program converts benefits recipients into taxpayers and contributors, strengthening the local economy and workforce.

So the community economic ripple effect is that employed participants spend locally, support families, and reduce the burden on caregiving systems.

But thank you much, Marie Garcia.

Next speaker.

Good afternoon.

My name is Marvin Ronquillow.

I'm a native San Franciscan, and I'm a participant trainee in Felton Institute's senior community service employment program, CSEP.

It is a workforce development program that helps seniors get back into the workforce.

Thank you for hearing my voice in support of senior programs and services and services for adults with disabilities.

I rediscovered my voice during the course of my becoming a trainee.

My self-esteem, my self-worth, my dignity has been bolstered by my participation in CSEP.

San Franciscans love, appreciate, and look out for seniors in the community.

And as a native San Franciscan, I am grateful.

We are a generous and supportive people.

Reducing funding for senior services flies in the face of our collective sense of support for one another.

Here is why senior services are important.

Senior workforce programs are all encompassing, fostering connection, engagement, financial autonomy, and the acknowledgement of the very real challenge of ageism.

But thank you much, Marlon Killer.

Thank you.

Next speaker.

Good afternoon.

Thank you for listening to our concerns.

We need more workforce programs for the elderly and disabled, not less.

I'm currently a participant in a workforce program, gaining important skills, uh digital literacy, which we all know there's a digital divide.

And previously I worked at an organization for 12 years.

I was laid off during the pandemic.

And ageism is real.

I found that when searching for a job for two plus years, I would see that they hire 20 year olds and 30 year olds.

As soon as I went to the interview, I saw it was plain as day.

So most uh companies do hire younger.

So with this competition, I knew that I needed to gain more skills, and luckily I found this uh workforce program before finding this paying workforce program.

At the end of each month, I would get so desperate, I would dumpster dive the last week of the month to find food to eat.

Speaker said, The reality is real.

We are rich.

Thank you much for addressing this committee.

Next speaker, please.

Supervisors, I urge you to continue funding workforce programs for seniors and the disabled.

I am a low-income senior and disabled.

I'm extremely isolated and haven't worked in decades.

Mental health challenges make doing a formal job search and finding a job on my own nearly impossible.

Programs like C SEP and Back to Earth, Back to Work provide individual coaching and support that are critical for people like me, as well as people that have other challenges, such as outdated or no job search skills, outdated or no computer skills and language barriers, to name a few.

These are some of the unique challenges that seniors and disabled folks face.

One of the wonderful things I've gotten out of participation is a renewed energy to find a job and to contribute to our community because of my interactions with other seniors and disabled folks in similar positions.

Thank you much for investing as committee.

Next speaker.

Good afternoon.

My name is Andrea.

I'm a participant in C SEP.

I'm here today to ask that funding for workforce development programs be protected and the strengthened.

This program provides training, work experience, confidence, and the opportunities for people who wanted to contribute to our communities and the economy.

Many older adults still have valuable skills, experience, and a strong desire to work.

Workforce development programs help connect people with opportunities and allow them to remain active, productive, and independent.

Investing in workforce development is an investment in people, families, business, and the future of our city.

Thank you for your time and the consideration.

Thank you much, Andrea.

Next speaker, please.

Good afternoon, Supervisors Christina Irving with the Dignity Fund Coalition and a D3 resident.

I urge you to reject cuts to services for older adults and adults with disabilities.

These cuts are short-sighted and do not reflect San Francisco values.

Community-based services keep people stable, connected, and living in the community while reducing the need for more costly services later on.

Older adults and adults with disabilities have already been disproportionately harmed by budget choices, including the suspension of the dignity fund allocation for four years.

That was a choice and not a requirement of the legislation, and it weakened services during and after COVID when isolation health risks were rising.

The city has also used the fund to cover cost of doing business increases, leaving less for direct services and undermining the will of the voters.

Older adults and adults with disabilities make up more than 20%, 27% of San Francisco's population, and they are the fastest growing segment of the city.

They vote and they will remember the choices that the city makes.

Please protect the dignity of these individuals and fully fund these essential services.

Thank you.

Thank you, Christina Irvin.

Next speaker, please.

Good afternoon.

My name is Jeanette Longton.

I am one of the two PCS counselors, uh counselor positions that is proposed to be cut, thus eliminating the internal and internal EAP that has been a vital support to employees and leadership of the city for over 40 years.

I need to point out to you that the HSS director, Ray Goulin, has repeatedly stated a false metric, stating that HSS counselors only do 20% of the work.

In fact, the person who follows the metrics deeply and is in charge of them re disputed that falsehood and informed Ray of that.

The counselors do actually more like 91% and COMSEC 9%.