San Francisco Budget and Finance Committee Regular Meeting - February 26, 2025
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San Francisco Budget and Finance Committee Regular Meeting - February 26, 2025
The Budget and Finance Committee of the San Francisco Board of Supervisors met on February 26, 2025, at 6:15 PM (stated meeting time) to consider 13 agenda items including loan agreements, contracts, grants, and funding approvals. The committee was chaired by Supervisor Connie Chan, joined by Vice Chair Matt Dorsey and Member Joan Guardio. Supervisor Danny Souter also attended for item 12. The meeting included presentations from city departments, public comment, and votes on all items.
Consent Calendar
- No separate consent calendar was used; all items were considered individually.
Public Comments & Testimony
- Item 1 (Normandy Ellis Loan): Chris Cummings, Director of Housing Development at Tenderloin Neighborhood Development Corporation (TNDC), expressed strong support for the acquisition of the Normandy Apartments, noting the building's scale and condition make it a cost-effective addition to affordable housing in District 2.
- Item 5 (Brilliant Corners FHSP): William Pickle, CEO of Brilliant Corners, spoke in support of the amendment, emphasizing the organization's role in developing the flexible housing subsidy pool model and commitment to reducing housing placement timelines.
- Item 12 (Embarcadero Plaza): Multiple speakers expressed support:
- Aaron Fenton (BXP) urged approval, highlighting the need to revitalize downtown public spaces.
- Mark Leeson (Teamsters Joint Council 7) supported the project, citing good partnership with BXP and expected construction jobs.
- Julia Rome (SF Travel) supported, noting the project would benefit visitors and local businesses.
- Robbie Silver (Downtown Partnership) supported, calling it a once-in-a-generation opportunity for a world-class park.
- Bernadette Kim (resident and Golden Gate Bird Alliance) supported but requested recognition of bird habitat protections.
- Toby Levitt (San Francisco Shakespeare Festival) supported, sharing the success of their free Shakespeare performance at Sue Bierman Park and the need for better infrastructure.
- A speaker from Gateway Tenants Association supported, calling the current plaza an embarrassment and urging reunification of the space.
- Chris Keene (Friends of Embarcadero Bricks) supported, highlighting the community effort over three years.
- Item 13 (Great Highway Promenade): Aileen Bulkin (Coalition for San Francisco neighborhoods) urged continuation, arguing the Coastal Conservancy had not finally approved the work program. Zach Lipton (Friends of Ocean Beach Park) supported acceptance, emphasizing the need for climate change and community planning studies.
Discussion Items
Item 1: Loan Agreement – Normandy Ellis, LP – Small Sites Program – Up to $50,600,000
- Presentation: Alia Gage (MOHCD) explained the loan would acquire and rehabilitate 1135-1175 Ellis Street (78 studios and 31 one-bedroom units). The project includes $35.8 million to repay a bridge loan, $10 million for rehabilitation (life safety, sprinklers, ADA upgrades), and 99-year affordability at 80% AMI. The per-unit cost of $266,000 is well below the program average of $364,000.
- BLA Report: Nick Menard noted the total per-unit cost is about $468,000, low compared to other projects, and recommended approval.
- Discussion: Chair Chan asked about cost savings; Ms. Gage cited a down market and the building's relatively good condition. The resolution was forwarded to full board with a positive recommendation (3-0).
Item 2: Professional Services Agreement – CDM Smith – Sunol Valley Water Treatment Plant Ozonation – Up to $24,600,000
- Presentation: Brian DeSore (SFPUC) detailed an amendment increasing the contract by $9.6 million (from $15M) and extending four years to 2030 due to expanded scope and construction support. The project addresses algae blooms and taste/odor issues. The total project budget is $326.3 million.
- BLA Report: Recommended approval, noting the contract is funded by water revenues and bonds, no general fund impact.
- Discussion: Chair Chan expressed concern about frequent contract amendments and asked about cost estimation controls. Jeremy Spitz (SFPUC) offered to brief the committee on capital program strategies. The motion passed (3-0).
Item 3: Accept and Expend Grant – James Irvine Foundation – Northern California Apprenticeship Network Sustainability – $675,000
- Presentation: Orien Willis (OEWD) presented a retroactive grant to support the apprenticeship network through sub-grantees (Bay Area Council, BayVac Media). The grant runs through November 2027, targeting 30 apprentices per year and growing the network by 20% annually.
- Discussion: Chair Chan noted the grant's focus on small and medium businesses and BIPOC populations. No public comment. Forwarded with recommendation (3-0).
Item 4: Agreement – New Flyer of America – Battery-Electric Buses – Up to $13,424,512
- Presentation: Bob Cater (SFMTA) and Joseph Tabora presented procurement of seven battery-electric buses (four 40-foot, three 60-foot) via a Washington state cooperative purchasing agreement. This is part of MTA's transition to zero-emission fleet, with 18 total buses (others from Gillig and Solaris). Funding from FTA grants and RM3; a small funding gap will be covered by project savings.
- BLA Report: Cost per bus similar to other jurisdictions, recommended approval.
- Discussion: Vice Chair Dorsey asked about the cooperative agreement and Gillig's past unwillingness to work with the city due to contracting requirements (12B, indemnification) which have been resolved. The motion passed (3-0).
Item 5: Grant Agreement Amendment – Brilliant Corners – Flexible Housing Subsidy Pool – Up to $59,542,690
- Presentation: Emily Cohen (HSH) presented a one-year extension (to June 2026) and $19.4 million increase to continue the scatter-site housing subsidy program serving up to 500 adults. 100% enrollment, 422 households currently subsidized. Demographics: 39% African American, 59% over 55, 17% LGBTQ. Housing retention rate 99%. Underperformance in placement timeliness (target 75 days, actual 116 days in 2024, down from 170 days) and spending due to staffing vacancies and market conditions. HSH is working with Brilliant Corners to improve and plans to adjust the target to 90 days in the next procurement.
- BLA Report: Nick Menard noted persistent underperformance but improvement trend. Recommended approval but suggested considering reallocation to other providers; however, HSH noted other providers have smaller capacity and this is a large program of 500 slots.
- Discussion: Vice Chair Dorsey expressed concerns about metrics but acknowledged the need for the program. The committee voted to forward the item to full board without recommendation (3-0).
Item 6: Accept and Expend Grant – Homekey Round 3 – 42 Otis Street – Up to $8,225,095
- Presentation: Emily Cohen presented retroactive acceptance of $8.2 million state grant for acquisition and operation of a 24-unit permanent supportive housing site for young adults (ages 18-24). The city will provide $8.7 million in matching funds (capital and operating). The site will be operated by Five Keys, opening summer 2025. HSH proposed technical amendments to align with state terminology.
- BLA Report: Recommended approval but flagged that capital costs were underestimated: $3.4 million in improvements were needed for a 2021 building, highlighting a systemic issue with due diligence. The city should better resource pre-purchase assessments.
- Discussion: Chair Chan asked about partnerships with DPW for cost estimates; Ms. Cohen agreed improvements are needed. Vice Chair Dorsey noted the project is in his district and supported it. The resolution was amended and forwarded with recommendation (3-0).
Item 7: Accept and Expend Grant – Andrew W. Mellon Foundation – Jail and Re-entry Services – $1,966,000
- Presentation: Jeannie Austin (SFPL) described a grant to expand information access for incarcerated people. The grant funds three project-limited positions. Achievements include updating 1992 standards for library services and growing a network from 40 to over 100 libraries. New funding supports early career librarian cohorts and digital literacy programs.
- Discussion: Vice Chair Dorsey expressed interest in meeting to discuss reentry literacy programs. Chair Chan asked about retention of staff after 2027; Ms. Austin said it depends on future funding. Forwarded with recommendation (3-0).
Items 8-11: Hearings – Release of Reserved Funds – Department of Public Health (Four Grants)
- These items were heard as a group. Anna Volidzik (DPH) summarized each:
- Item 8: State Vocational Rehabilitation Services ($791,433) – vocational services for adults with mental illness.
- Item 9: STD Prevention and Control ($13,635,302) – core federal grant.
- Item 10: NIDA Clinical Trials Network ($104,508) – research on cocaine use disorder treatment.
- Item 11: Comprehensive Opioid and Substance Use Program ($1,600,000) – overdose fatality review.
- BLA Report: Only item 8 had a report; recommended approval despite placement outcomes below targets (50-60% of targets), noting the city contributes only 20% of costs and outcomes are similar to other counties.
- Discussion: Chair Chan asked about evaluating the vocational program. No public comment. The committee voted to release the funds and then to hear and file the items (both motions passed 3-0).
Item 12: Accept and Expend Grant – BXP Embarcadero Plaza LP – Embarcadero Plaza and Sue Bierman Park – $12,500,000
- Presentation: Supervisor Danny Souter provided context, calling the plaza the
Meeting Transcript
Good morning. Here we go again. The meeting will come to order. Welcome to the February 26, 2025 meeting of the Budget and Finance Committee. I am Supervisor Connie Chan, Chair of the Committee. I'm joined by Vice Chair Supervisor Matt Dorsey and member Supervisor Joan Guardio. Our clerk, it's Brent Halipa. And uh just want to thank uh Susan Enalls from uh 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 silence all cell phones and electronic devices to prevent interruptions to our proceedings. Should you have any documents to be included as part of the file, they should be submitted to myself, the clerk. Public comment will be taken on each item on this agenda when your item of interest comes up in 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 tray by the television to your left by those doors. If you wish to be accurately recorded for the minutes, alternatively, you may submit public comment in writing in either of the following ways. Email them to myself, the budget and finance committee clerk at B-R-E-N-T dot J A L I P A at SFGO V dotor G. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. You may also send your written comments via U.S. Postal Service to our office and city hall at one. Dr. Carlton B. Goodlett Place, Room 244, San Francisco, California 94102. And finally, Madam Chair, items acted upon today are expected to appear on the Board of Supervisors' agenda of March 4th, unless otherwise stated. Madam Chair. Thank you. And also just want to acknowledge Supervisor Danny Sauder is here joining us today. And uh and uh Mr. Clerk, before we call an item number one, just like to remind everybody that um typically for the items that have budget and legislative uh report, we will actually go to the department presentation, then to the budget and legislative analyst, and then we'll go to question and commons, then we will go to the public commons. And so with that, Mr. Clerk, please call item number one. Yes, item number one is a resolution approving and authorizing the director of the mayor's office of housing and community development to execute loan documents for the permanent financing of 1135, 1155, and 1175 Ellis Street, pursuant to the small sites program and preservation of the seismic safety program for a total loan amount not to exceed 50.6 million, uh confirming the planning department's determination under the California Environmental Quality Act, finding that the loan is consistent with the general plan and the eight priority policies of the planning code and authorizing the director or their designee to make certain modifications to the loan documents and take certain actions in furtherance of this resolution. Madam Chair. Thank you. And today we have the mayor's office of house uh housing and community development here. Good morning. My name is Alia Gage. I'm the preservation program manager at the mayor's office of housing and community development, and it's my pleasure to be here to present uh permanent loan uh for Normandy Apartments at the address that was uh listed by the clerk. The project is located uh at Ellis and Gough Streets in Western Edition, District 2. It includes 78 studios and 31 bedroom apartments, as well as 120 parking spaces, quite unusual for affordable housing, uh, and also provides a really critical infusion of additional commercial income to the project. Before you today is an acquisition, rehabilitation, and permanent loan, permanent financing. The first component of the loan will be the repayment of a 35.8 acquisition bridge loan that was provided by the housing accelerator fund in late January. Uh after that, uh the budget includes nearly 10 million dollars for rehabilitation. I'll speak a little bit more about that on the next slide, uh, as well as funds for soft costs, reserves, and the developer fee. Speaking of the developer, I'm joined today by Chris Cummings, Director of Housing Development from the Tenderloin Housing Neighborhood Corporation. The building was built in 1968 on land uh that was controlled by the former redevelopment agency. As you know, small sites is an anti-displacement program, and we're proud that land that likely displaced people in the Western Edition is now going to be secured as permanent affordable housing to help stabilize the existing households and future households at that site. There are some vacant commercial suites at the building, though they are a non-conforming use, and so they will be converted to community rooms, something that the current residents are really excited about. There are some vacancies that have accumulated while the project was under contract, and those will be used for on-site relocation during the rehabilitation to minimize the impact for existing residents.
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