Budget and Finance Committee Regular Meeting - March 5, 2025
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Budget and Finance Committee Regular Meeting - March 5, 2025
The Budget and Finance Committee, chaired by Supervisor Connie Chan and including Vice Chair Matt Dorsey and Member Joel Engardio, met on March 5, 2025, to consider a hearing on the First Year Free small business program, two tax-related ordinances, airport professional services contract modifications, a Public Utilities Commission (PUC) radio site lease amendment, an emergency declaration for a water treatment facility, Health Service System (HSS) contract amendments, and two real property leases at 1099 Sunnydale Avenue. All items were unanimously forwarded to the full Board of Supervisors with positive recommendations. No public comment was offered on any agenda item.
Hearing on First Year Free Program
Supervisor Steve Sherrow introduced the hearing, expressing strong support for the program as a partnership between the city and entrepreneurs. Amanda Freed (Chief of Policy and Communications, Treasurer & Tax Collector) and Katie Tang (Director, Office of Small Business) reported that since the program began in November 2021, 9,400 businesses have enrolled and nearly $5 million in fees have been waived across multiple departments, with the largest share from the Department of Building Inspection (DBI). Success stories included El Milamores ($11,000 saved) and Casa Guadalupe ($1,800 saved). Officials noted obstacles to full implementation, including interdepartmental coordination and technology integration, and emphasized that a longer authorization (e.g., 5–10 years) would enable investments in system improvements. The committee voted unanimously to hear and file the item.
Voluntary Disclosure Program and Empty Homes Tax Suspension
Amanda Freed presented two ordinances. The Voluntary Disclosure Agreement (VDA) program (Item 2) authorizes the tax collector to waive taxes, penalties, and interest for unregistered businesses that voluntarily come forward and pay back taxes for the prior six years. It is expected to generate $1.5 million in prior years and $1 million in ongoing revenue. The Empty Homes Tax Suspension ordinance (Item 3) suspends the tax pending resolution of a lawsuit that has prevented collection since a November 2024 court order. BLA Analyst Nick Menard noted that revenue loss is estimated at $9 million in 2024 rising to $15.4 million, but these funds are dedicated to affordable housing, not the general fund. The committee forwarded both ordinances to the full board.
Airport Professional Services Contract Modifications
The committee approved modifications to two project management support contracts at San Francisco International Airport. Item 4 increased the Consor PMCM, Inc. contract by $10.3 million (total not to exceed $13 million) and extended it for four years for the Cargo Building 626.1 project. Item 5 increased the Westfield Consultants (WSP/AGS) joint venture contract by $10 million (total $13 million) and extended it for four years for the Cargo Building 720.1 and GSE Building 742 projects. Both contracts resulted from competitive processes, have 20% Local Business Enterprise participation, and received positive performance evaluations. The BLA recommended approval. Both items were forwarded.
PUC Radio Communication Site Lease Amendment
Josh Keene (SFPUC Assistant Real Estate Director) presented a resolution to amend a lease with Communication and Control, Inc. at a radio site in Alameda County. The amendment expands the leased premises to allow the PUC to install additional equipment critical to water and power operations and emergency coordination, increasing the monthly base rent to $9,080. The lease includes options through 2040. The committee forwarded the item.
Emergency Declaration for Tesla Treatment Facility
Angela Chung (SFPUC Water Supply and Treatment Division Manager) presented an emergency declaration to restore the uninterruptible standby power supply system at the Tesla Treatment Facility, which failed on December 11, 2024. The PUC plans to contract with Holt of California at an estimated cost of $700,000, with completion by April 30, 2025. Chair Chan clarified that the facility name is unrelated to the Tesla corporation. The BLA recommended approval. The committee forwarded the item.
Health Service System Contract Amendments
Michael Visconti (HSS Contracts Administration Manager) presented two amendments. Item 8 extends the Hyland Software, Inc. contract for document management by five years, increasing the total not to exceed amount to $574,000. Item 9 extends the P&A Administrative Services, Inc. contract for administering COBRA, AB528, flexible spending, and health spending accounts by 18 months, increasing the total to $4,667,457. The BLA noted that item 9 should have been brought to the board earlier under charter thresholds and recommended an internal audit; the department confirmed no other contracts were at risk. The committee forwarded both items.
Real Property Leases at 1099 Sunnydale Avenue
Driko Penick (Director of Real Estate) presented two leases at the Villages community facility in Visitation Valley. Item 10 with FACES SF provides approximately 3,000 square feet for workforce development and family services, with an initial annual rent of $48,867. The lease includes a conditional 822-square-foot portion tied to grant funding; if the grant ends, rent adjusts to approximately $36,000 per year. Item 11 with Felton Institute provides approximately 1,500 square feet for aging services, with an initial annual rent of $24,216. Both leases have five-year initial terms with two five-year renewal options. The committee forwarded both items.
Key Outcomes
- Hearing on First Year Free Program heard and filed (unanimous, 3-0).
- Voluntary Disclosure Program ordinance and Empty Homes Tax Suspension ordinance forwarded to full board (unanimous, 3-0).
- Airport professional services contract modifications for Consor PMCM and Westfield Consultants forwarded (unanimous, 3-0).
- PUC radio communication site lease amendment forwarded (unanimous, 3-0).
- Emergency declaration for Tesla Treatment Facility power system restoration forwarded (unanimous, 3-0).
- HSS contract amendments for Hyland Software and P&A Administrative Services forwarded (unanimous, 3-0).
- Real property leases for FACES SF and Felton Institute at 1099 Sunnydale Avenue forwarded (unanimous, 3-0).
Meeting Transcript
Good morning. The meeting will come to order. Welcome to the March 5th, 2025 meeting of the Budget and Finance Committee. I am Supervisor Connie Chang, Chair of the Committee. I am joined by Vice Chair Supervisor Matt Dorsey and Member Supervisor Joel Guardio, our clerk at Brent Houtlipa. I would like to thank SFGov TV for broadcasting this meeting, particularly Jamie Atrovery. And so with that, Mr. Clark, do you have any announcement? Thank you, Madam Chair. Just a friendly reminder to those in the 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 trade by the television to your left by the doors. If you wish to be accurately recorded for the minutes, alternatively, you may submit public comment in writing in either of the following ways. Email them to myself, the budget and finance committee clerk at B-R-E-N-T.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 Beak of the 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 11th, unless otherwise stated. Madam Chair. Thank you, Mr. Clerk. And before we start, uh, as a reminder to everyone that typically when we have a budget and legislative analyst report, um, we will go to the city department and then the BL8, and then we will have commons and questions from this committee, and then we go to public comment. And uh with that, Mr. Clerk, um please call item number one. Yes, item number one is a hearing on the first year free program, including a report on the number of small businesses supported since the program's inception. Uh remaining obstacles to full implementation and necessary steps to make the benefits to new small businesses permanent. Madam Chair. Thank you. And we want to welcome um Supervisor Steve Sherrow here, and really thank you so much for calling this uh hearing, and the floor is yours. Well, thank you, Chair Chan, Vice Chair Dorsey, Supervisor Ingario for scheduling this hearing today. I'm deeply appreciative for the opportunity to be here. Um the subject of this hearing is the first year free program, which waives initial registration, license, permit, and other applicable fees for new small businesses and existing eligible shops that are opening a storefront. Now, this item was my first introduction at the board because I strongly believe that programs like this are an o are are an example of City Hall being a partner, not an obstacle, to the success of entrepreneurs and to the vibrancy of our city. Making it easier to open and thrive as a small business in San Francisco must be a shared priority for city leaders. Empty storefronts need to be filled. Creative, small business entrepreneurs must be empowered. I believe that today we will hear about the massive successes of first year free. But the reason we are here today is because first year free will sunset this July unless legislative action is taken to extend this program. Now, as is discussed weekly at this committee, the reality of our budget situation will call for hard decisions on what programs we prioritize to further our city's post-pandemic recovery. If we are to renew first year free, which I believe is again imperative to our success as a city, we must enable it to be as efficient and impactful as possible. I'm extremely grateful to my colleagues, Chair Chan, Vice Chair Dorsey, Supervisor and Guardio for weekly engaging on this incredibly difficult work here on the budget committee to reckon with our shortfall. I hope this hearing will offer us a forum to discuss the program's budgetary impacts and the challenges hindering smooth interdepartmental coordination and the opportunities to strengthen the program's effectiveness moving forward. I want to thank Office of Small Business Director Katie Tang and Amanda Freed from the Treasurer and Tax Collector, and call them to the podium to provide a quick presentation and engage in this critical discussion with us today. We really owe the success of this program to you and to your teams. Thank you very much for being here today. Good morning.
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