Good morning.

Good morning.

The meeting will come to order.

Welcome to the November 5th, 2025 meeting of the Budget and Finance Committee.

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

I'm joined by Vice Chair Supervisor Matt Dorsey shortly by Supervisor Danny Souter.

Our clerk is Brent Haliba.

And I would like to thank Seuss Enols from EssexGov TV for broadcasting this meeting.

Mr.

Clerk, 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, it 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.

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 tray by the television to your left and 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.j.

SF G-O-V.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 B.

Goodlett.

Place Room 244, San Francisco, California, 94102.

And finally, due to our observance of Veterans Day, items acted upon today are expected to appear on the Board of Supervisors Agenda of November 18th, unless otherwise stated.

Thank you, Mr.

Clerk.

And again, uh reminding uh everyone, uh general public, um, and welcome, Supervisor, and that um for all the items that have budget and legislative analyst reports.

We typically would go to the department for presentation, and then we will go to the budget and legislative analysts for their uh reporting back, and then we can go to comments and questions from this body, and then we'll go to the public comment.

And so with that, Mr.

Clerk, please call item number one.

Yes, item number one is an ordinance amending the administrative code to create the small business rezoning construction relief program to provide financial support, including grants and loans to businesses impacted by construction relating to the city residential rezoning program, uh, adopted in 2025 to 2026, establishing the small business rezoning construction relief fund to receive monies for the program, designating the Office of Small Business and Office of Economic and Workforce Development to administer the fund and the program and promulgate rules and regulations in furtherance of the program and amending the business and tax regulations code to follow to allow taxpayers to designate a portion of their gross receipt taxes for deposit in the fund.

Madam Chair.

Thank you.

And uh we want to welcome uh Supervisor Mirna Malgar to the chamber, and this is an item that actually uh was heard and continue from last week and uh due to substantive amendments that it had to be continued, and uh the floor is yours, Supervisor Malgar.

Thank you.

Uh Chair Chan.

I don't have uh much to add.

Uh just to um point out since we did substantive amendments.

I hope that you had a chance to review them.

Uh the amendments were meant to uh uh reflect the reality that for some small businesses their profit margers margins are shorter because of the nature of their business or overhead is higher, and those business are restaurants uh of which are there are so many uh in our hospitality-based economy in San Francisco.

So uh that's it.

And uh the I hope that you can support it, and I look forward to the partnership on all these issues.

Thank you.

I don't see any name on the roster.

I do not have additional questions.

Uh let's go to public comment on this item.

Yes, we are now opening public comment for this item number one.

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 closed.

Colleagues, I would like to um with the support uh and urging of Supervisor Malgar, I will like to move this item uh as now amended to full board with recommendation uh and a roll call, please.

And on that motion to forward the ordinance to the full board with the positive recommendation.

Vice Chair Dorsey.

Dorsey, I member Sauter.

Soder.

I.

Chair Chan.

I.

Chan I.

We have three eyes.

The motion passes.

Thank you, Supervisor.

And Mr.

Clerk, please call item number two.

Yes, item number two is a resolution authorizing the Mayor's Office of Housing and Community Development to execute a standard agreement with California Department of Housing and Community Development under the Infill Infrastructure Grant Program, catalytic qualifying infill area for a total award of 45 million dispersed by Cal HCD as a grant to the city for infrastructure improvements for the housing development related to revitalization and master development of replacement public housing, affordable housing and market rate housing, commonly known as the Sunnydale Hope SF development, the housing development related to the revitalization and master development of affordable and market rate housing, commonly known as Treasure Island Project, and the housing development related to the mixed-use urban village, including affordable and market rate housing.

Pardon, commonly known as the India Basement, uh sorry, India Basin Development.

For the period starting on the execution date of the standard agreement through June 30th, 2031, and any and all other documents required or deemed necessary or appropriate.

Madam Chair.

Thank you, Mr.

Clerk.

And today we have the mayor's office of housing and community development here.

Good morning, members of budget and finance committee.

My name is Robert Baca.

I'm the joint development director of Mayor's Office of Housing and Community Development.

I do have a slide.

Okay.

So today I'm here to present file 251054.

It's an accept and expand resolution for infill infrastructure grant, also known as IAG funds for 45 million dollars.

In uh 2023, the City of San Francisco responded to a state-issued RFP and was awarded 45 million dollars to support infrastructure improvements.

The city plans to apply these these funds to India Basin, Sunnydale, Hope SF, and Treasure Island.

The first project is India Basin.

Um it's led by Build SF and the BMB Company, who's the lead for the affordable housing component.

It's a total, it's planned for a total of 1,575 new homes, of which 25% will be affordable units, uh 209,000 square feet of commercial space and 14 acres of public space, including transit improvements.

The part uh that we're referring to for IIG application purposes is India Basin Phase One.

Um, and so part of the application included 392 total units, of which 181 are affordable units, 45,000 square feet of commercial retail and five acres of public parks, and new streets, utilities, and transportation improvements right now.

The tied uh with this phase, which we which we included in this award, is uh Treasure Island E 1.2 senior, which is 100 units of senior housing uh funded with HUD 202, and uh currently there's a tight emotion pre-development loan, and we also plan to provide a gap loan um pad and utilities uh through stage two infrastructure, and then there'll be shared site access and a fire road with behavior health.

Um the second project is E 1.2 behavior health, which is six stories, 68,000 square foot facility, totaling 256 beds.

Um currently there's funding from DPH, Prop A bond, TIDA development subsidy, and C D S C C E.

Um so right now the plan is to start that in 2027.

Um, but obviously the critical path is pad delivery.

Uh there's a lot of infrastructure work going on right now.

Um, and this uh this grant would actually pay for.

Let's pull it up really quick.

And this uh this grant would actually pay for SATO conduit installation, the Yoruba Buena Island uh multi-use path, and then Eastide Commons uh infrastructure improvements, which is tied to IC 4.3, which is a third project, and that consists of 150 family units and a child care center.

Uh, they applied for ASIC this spring, and we're waiting to hear back if that project was awarded HCD ASIC funding uh hopefully in December.

Um, there's currently a tight MOCD predevelopment loan, and we also plan to fund a GAP.

Uh thank you for your time.

I'm happy to answer any questions.

And um we also accept all the uh clerk changes on the resolution.

Thank you.

And uh Vice Chair Dorsey.

Thank you, Chair Chan.

I do want to express my gratitude to everyone who has worked on this, including um the state.

Um representing Treasure Island, one of the things that I'm aware of is that we have a lot of people there who um are experiencing the issues that play out because they don't have the infrastructure.

Uh I know Treasure Island has had um I think more than 500 power outages since 1997.

It's uh four times higher than the citywide average.

There's uh I think often when we talk about um when we talk about infrastructure.

You know, there's not there aren't people there, but I think I know for for my district uh and for the neighborhood that I represent there.

There's a lot of great things happening.

Obviously, there's a lot of people have been waiting a long time for this, so I appreciate the uh the work on this.

I'd like to be added as a co-sponsor.

Thank you.

Thank you.

Uh I don't see any other name on the roster.

I do not have additional questions.

Thank you so much for your work, and thank you.

Thank you.

And we'll go to public commons on this item.

Yes, if you have any members of the public, wish to address this committee regarding this item number two.

That was your opportunity to uh approach the lecture.

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

What is your will, Vice Chair?

Thank you, Chair Chan.

I would like to make a motion to send this resolution out to the full board of supervisors with our positive recommendation.

Wonderful.

Roll call, please.

And on that motion by Vice Chair Dorsey to forward this resolution to the full board with a positive recommendation.

Vice Chair Dorsey.

Aye.

Dorsey, aye.

Member Sauter Sauter, aye.

Chair Chan.

Aye.

Chan, I.

We have three ayes.

The motion passes.

And Mr.

Clark, please call item number three.

Yes, item number three.

Is a resolution approving for purposes of internal revenue code of 1986 as amended the issuance and sale of revenue obligations by the California Enterprise Development Authority in an aggregate principal amount not to exceed five million to refinance the cost of acquisition, rehabilitation, improvement, installation, and equipping of a portion of administrative facilities owned and operated by Mission Economic Development Agency.

Madam Chair.

Thank you.

And today we have uh our controllers here.

Morning, Chair Chan and Supervisors, Keith Savini from the Controller's Office of Public Finance.

Also present is Elaine E from the Mission Economic Development Agency.

If there are any questions on the project, uh just a reminder for the committee and members of the public, the tax equity and fiscal responsibility act or TEFRA should uh allows the tax exemption of interest on certain types of debt issued through joint powers authorities.

In this case, uh the proposed financing is to be issued through the California Enterprise Development Authority or CETA, which is a joint powers authority to which the city and county of San Francisco is a participating member.

The authority is authorized to issue bonds, notes, COPs, or other forms of debt, including refinancing previously issued debt.

Federal tax law requires that the governing body of the jurisdiction in which the project is located, approve the financing in the project after providing the opportunity for a duly noticed public hearing.

The public hearing notice was published on the controller's office of public finance website on October 7th, and the hearing was held by telephone on October 14th.

There were no comments from the public through the public hearing process or received by email.

The purpose of this project, uh the proceeds from the sale of the obligations in an amount not to exceed five million will be loaned to Mission Resource Center LLC, whose sole member is the Mission Economic Development Agency or Meta.

The proceeds will be used to refinance the balance of a 2015 loan that funded the cost of improvements of a 21,000 square foot multi-story commercial building at 2301 Mission Street, which is owned by Mission Resource Center and leased to and operated by Meta.

The loan will be repaid entirely from payments by Mission Resource Center under the loan agreement, and the city and county has no obligation to repay the loan.

I'd also note that the 2015 financing went through a similar TEFRA process.

Founded in 1973, the Mission Economic Development Agency is a community economic development corporation located in the mission district.

They help families open and improve small businesses, purchase homes, and prevent foreclosures, build credit and savings while reducing debt, access technology, and find sustaining jobs.

Meta works to improve economic and social conditions for San Francisco's low and moderate income residents with primarily Latino families as Meta's constituents.

They're located in District 9, and Supervisor Fielder is the sponsor of the resolution.

And that concludes my presentation.

Thank you.

Thank you.

I do not have additional questions.

Thank you so much for your work on this.

We will go to public comment on this item.

Yes, we are now opening public comment for this item number three.

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

Seeing no public commons, public common is now closed.

Colleagues, I would like to move this item to full board with recommendation and a roll call, please.

And on the motion to forward to the full board to the positive recommendation.

Dorsey, I.

Member Soder.

Soder, I chair Chan.

Aye.

Chan I, we have three ayes.

The motion passes.

Mr.

Clerk, please call item number four.

Item number four is a resolution approving amendment number three to the airport advertising lease between Clear Channel Outdoor LLC doing business as clear channel airports as tenant and the city and county acting by and through its airport commission as landlord for the addition of premises solely for the promotion of large sporting events and establishing a new rent structure for those locations.

Madam Chair.

Thank you.

And today we have SFO here.

Good morning, Deanna Voleck from SFO.

The airport is seeking your approval for amendment number three to an existing lease with Clear Channel Outdoor LLC operating as Clear Channel Airports.

This modification would add premises solely for the promotion of large sporting events and establishes a new rent structure equal to 65% of gross revenue generated for those locations.

Clear Channel Outdoor Inc.

currently operates the advertising concession at SFO under the airport advertising program lease.

The lease has 148 individual advertising locations for static and digital units within the terminals and the rental car center, and rent is a minimum annual guarantee currently equal to 14,205,786.

Due to several large sporting events occurring next year, such as the 2026 Super Bowl and 2026 fee for World Cup, the airport would like to add new locations that would be desirable for welcome messaging and advertising, along with a revenue share rent structure.

As with all advertising installations, prior airport approval is required to ensure design and messaging standards.

Clear channel will install, manage, operate, and design and display commercial advertising using various media types.

The BLA has recommended approval, and I am joined by our revenue development and management team for any questions.

Under the lease, the airport leases property to Claire Channel, which they use to display advertising.

We summarize the lease terms on page three of the report.

And under the existing lease, Claire Channel pays a minimum guaranteed rent to the airport of over 10 million dollars, but there's no percentage rent structure, which is unusual for airport leases.

Um this amendment adds a percentage rent structure to spaces specifically for advertising for large sporting events.

The airport will get 65% of the revenue from those advertising spaces.

Uh the airport estimates that it will generate 1.3 million dollars in revenue over the next two years.

Uh 15% of that would go to the general fund, so that's about $200,000 for the general fund over that time.

Uh and we know it as a policy consideration that we actually recommended the board reject this lease in 2013 because it did not contain a percentage rent structure.

We went back and tested what the revenues to the airport would have been over the past 10 years had it maintained the prior rent uh percentage rent structure, and we determined that the airport would have received 20.6 million dollars more revenue over the 10-year period um than they than they received under this lease, which had no percentage rent structure.

Um three million of that would have gone to the general fund.

So we're recommending approval of this item, but also recommending to the airport that they include a percentage rent structure in the when they reprocure the advertising service going forward.

Thank you.

Help me understand when are we gonna if we are and if you are, and when uh if so, that you will reprocure this um contract and where then you will that SFO will reconsider.

Yes, the it was supposed to go up for RFP, but because of COVID, it's been extended with the other leases.

This current lease um expires October 2027, and we are fully prepared to go to a full RFP process in terms of the thinking of future with the previous um original lease in 2013.

The airport director at the time did not want a superfluous amount of advertising and thought because of percentage rent that would encourage them to put advertising everywhere.

Um, but I'm going to defer to my colleague from RDM to talk about our future plans.

Thank you.

Good morning, I'm Cheryl Brennan, Director of Revenue Development and Management.

So the Clear Channel contract does expire in October of 2027, but we're gonna get a running start for a variety of reasons, and we plan to issue an RFP first quarter of next year.

And we will absolutely um have the financial structure be at the greater of a meg or percentage rent.

It's a it's a different time period at the airport, and we're very interested in maximizing revenue off of this contract.

There's a lot of upside to be had, a lot of new locations to add that wasn't the uh our desire, our aesthetic desire 12 or 13 years ago.

Yeah.

I mean, I wish that we also had this conversation, like right now, or I should say earlier, when we know that the city is gonna take on Super Bowl and FIFA, like hosting uh events um in both Santa Clara area and then in basically in the Bay Area, which is really creating um SFOs such a hub for travel um in 2026.

Well, for me, I think also not to mention there's also gonna be the Pokemon War Champion in August.

Um so that's what my family really is like focusing on besides like well, also Super Bowl, of course, but you know, just kind of just some of the thoughts of like wishing we have more opportunity uh in terms of generating more revenues.

Uh, I look forward to seeing perhaps their other opportunities uh in the very same period, um, and that that the airport I'm sure will figure out ways uh and I I do look forward to that uh on top of you know existing contract with Claire Channel and um look forward to seeing that and hearing more of that uh what you're gonna do for 2027.

How me understand when is then uh you intend the RFP is gonna go out if it's expires in October 2027.

So we'll issue the RFP between January and March of 2026, so it will be awarded next year, which you know puts it award a year before expiration, but that gives us time to plan the new installations.

It also gives us some comfort because we're opening Terminal 3 West, our latest renovation in 27.

It just gives us some comfort if the incumbent wins.

They're probably comfortable installing all their new uh locations in Terminal 3 West.

If they don't, then we'll cross that bridge uh you know early so that we can get uh if there's a new company that comes in, we could have them install the advertising in Terminal 3 West earlier before the actual expiration of Clear Channel.

We just don't want to open Terminal 3 West with empty advertising locations.

Thank you.

We appreciate it.

I don't have any additional question.

I don't see any name on roster.

Let's go to public commons on this item.

Yes, if we have any members of the public who wish to address this committee regarding this item number four, that was your opportunity.

Madam Chair, we have no speakers.

Seeing no public comments, public comments now closed.

Colleagues, I would like to send this item to a full board with recommendation and a roll call, please.

And on the motion to forward to the full board with a positive recommendation, Vice Chair Dorsey.

Dorsey I.

Member Sauter.

Sodger, aye.

Chair Chan.

I.

Chan I.

We have three ayes.

The motion passes.

Thank you so much.

And we are also excited about Pokemon too.

I'm gone.

Thank you.

And Mr.

Clerk, please call item number five.

Item number five is a resolution approving a commercial lease agreement between the city and county and San Francisco CNC doing business as Mills drive-in.

For the retail space located at 801 Mission Street and the fifth and mission garage for an initial five-year term that will result in an estimated 1.9 million in revenue and one five-year option to extend the lease effective upon approval of this resolution.

Madam Chair.

Thank you.

And we have SFMTA here.

Good morning, Chair Chan, Supervisor Dorsey, Supervisor Sauter, Mr.

Clerk, thank you so much for making time for us this morning if it gets into your busy uh current workloads.

Uh we deeply appreciate the opportunity to be before you today to discuss this lease agreement.

Um I am going to hand it over to our uh fully capable real estate manager, Kaziah Tang, who will be walking you through this presentation.

Good morning.

Good morning, Madam Chan, Supervisor Sauter, Vice Chair, sitting in, thank you.

And Supervisor Dorsey.

And while we are discussing a new lease agreement, uh we discovered some information from the previous real estate administration of incomplete work.

And so I'd like to address that before I get into the details of the Mills uh lease proposal.

Um back in 2020, while the city was undergoing the pandemic and shelter in place was ordered.

The mayor then, uh Mayor Breed issued an ordinance saying that the city should be forgiving rent, uh providing an abatement since the shelter in place had drastically reduced the traffic and business potential for many of the businesses downtown and throughout the city, as well as the country.

Um in 2021, we verbally effectuated about 25 of these agreements.

And at that time, the perspective was that we would address them as they came up for renewal.

I don't know exactly what happened between that time and now, but we only discovered this last week.

And so, having discovered this, we have formulated a plan to address it, and we would like to discuss that with you now.

In addition to this MELS lease, there is one more lease with TAS Incorporated that is very similar in structure, and we'll also need the Board of Supervisors' approval.

In addition, we have 15 other leases that do not require the board approval because it does not hit the threshold of section 9.1108.

Uh however, we will work diligently with the city attorney's office to formally have those amendments memorialized.

However, um, our timeline with the holidays would be to come before the board in January 2026, ideally, to bring TADS before you and then work internally with the city attorney's Office to bring the remaining 15 uh leases to uh current amended status, and that would hopefully occur at the end of the first quarter by April 2026.

So that is our proposed timeline.

Along with that, we will be developing more internal and written policies and procedures that seem to be lacking at this time.

I am fairly new to this post.

Not that it is an excuse for the agency, but now that I'm aware of some of these issues, I'm beginning to formulate a plan to address, and we are committed to bringing these to legal amendment status.

So with that, I'd like to bring up the real issue we are brought here today, which is to discuss MELS lease.

And this would be next slide, please.

For an initial term of five years, it would bring us just under two million in revenue, and there would be a potential extension option for another five years.

They are known for late night hours, weekends, family meals, and has been an anchor tenant for us at Fifth and Mission Garage.

The existing, the original lease, sorry, um, was signed in 2000 by a downtown parking corporation.

It was then transferred to the SFMTA in 2013.

If you look at the three-year average, it's just under 400,000 for revenue.

Based on the current structure of 8% gross rents, we would be bringing in approximately that same amount.

It is very close to what we were looking at over the past few years and closer to also the pre-pandemic uh gross receipts levels.

So we are seeing improvement in the economy slowly but surely.

If there is any sublet or assignment, we have negotiated to add additional terms for that.

And so long as MELS business is good and the city's business is good, the MTA should also benefit as well as the city.

Therefore, we request that the board approve of this lease amendment as it benefits the city and be assured that the SFMTA remains committed to bringing the other leases into compliance.

Thank you.

That's the end of my presentation.

Thank you.

Item five is a resolution that would retroactively approve a new lease agreement that MTA will have with San Francisco CNC, which does business as MELS DINAR.

MELLS would occupy or continue to occupy a space at the Fifth and Mission Garage, and the lease has an initial five-year term with one five-year option to extend.

We also note that based on historical revenues, because they've been on this 8% structure for a couple years now, MTA is projecting that at least over the initial five-year term, if MEL is able to sustain um their revenues at their current levels that the lease would generate 1.9 million dollars for MTA over five years, which would be used to fund our transportation operations.

We also in conversations with the department, we identified um several internal control weaknesses in the historical management of MTA's real estate division, which include not documenting lease transactions, not having any policy and policies and procedures governing the division.

So for example, what the standard lease terms should be for commercial leases, when they should tri when the lease would trigger an RFP or a process to work with the broker.

Um, for that reason, we do have several recommendations in this report um to establish policies and procedures uh along that addressed those items that I just mentioned to document all property transactions.

Um, and do so as soon as possible.

I think you know, for any organization, this would be an urgent set of recommendations, but I think they take on a special significance given MTA's structural budget deficit and the fact that they're undertaking very high risk and complex property development um in the next several years, for example, at Petrero Yard.

Um so I do I do consider these um very urgent recommendations.

And I also know in the report that the there's new management at MTA's real estate division, both at the deputy director and at the manager level.

Um so that's an opportunity given the recent reorganization to modernize the division's um operating procedures.

Thank you.

I mean, certainly it's alarming uh, you know, uh according to the budget and legislative analyst report, and you can correct me if I'm wrong because I'm trying to understand the discrepancy between that in the report it mentioned approximately 50, 50 others leases that require um that you actually that have received like rent forgiveness, but does does not actually they do not have any um written lease amendments and um but then I think you mentioned 15 1.5 that is what you're focusing on, hopefully by April 2026.

That's a problem for me, that timeline.

Uh and so I I want to understand how and how long is it gonna take for your division to fix all 50?

Um I think today I wanna uh be supportive of this lease because we gotta do we got to start working on this, right?

And and so this is like a first step to fix the mail's drive-in, and I can understand that it's coming, and I can understand that you know your priority is another 15 by April 2026, but you actually have 50 in total.

Actually, I'd like to correct the record.

It's not five zero, it's one five in addition to the TATS and the MELS lease.

We have many properties, but only 25 businesses accepted, and some businesses left before.

So we only have 17 in total, one seven.

So you have 17 leases that have no written lease amendment, not formalized, correct.

And how many lease with business or commercial property that you have right now total?

We have approximately 40.

Yeah, approximate 40, and that out of which only 17 that has no written lease amendment.

Correct.

Got it.

Uh and uh, and what about the remaining of those?

That you may were they did they actually have any lease amendments at all, or the reason why they do not have written lease, they are not required to go through the process because they did not receive rent for that.

Are you referring to the 15 additional leases that we need?

No, I'm I'm referring the remaining, well, I guess like those were not offered or did not accept any rent relief.

So yes, it was the remaining of the 23 or 25, did not or 23, did not assess not subject to this.

Yeah, not subject to lease amendments because they do did not accept loan or rent forgiveness.

It was not abated, correct.

Could you walk us through?

I I don't think I'm gonna go back to what happened.

I think instead I'm gonna look forward to see uh what is how are you gonna tackle that fifteen?

So it's approximately three or four per month if we can get it done by the end of the quarter, and that seems like it's still gonna be a challenge for the city attorney's workload.

Um that is probably our largest challenge for this particular task because it requires city attorney uh input and work on each of these uh agreements.

That is really the only uh major time obstacle.

Of course, we need to also reach out and make sure that these tenants are agreeable to the terms.

What happened if they don't?

Um it's just like any other negotiation.

We have to um make concessions on both sides to come to an agreement.

Because technically it's retroactive, isn't it?

Um, well, we'd want to we'd want to bring these leases current up to date.

And so we may make reference to what occurred, but it would be looking forward, just as this is a new lease with MELS.

Um, we're looking forward and we're not referring back to the original lease or terms necessarily.

Interesting.

Great.

Uh Vice Chair Dorsey.

Thank you, Chair Chan.

Um I want to express my appreciation to the BLA for its its work on this and um highlighting things that um we need to make sure that we get right, and I appreciate MTA's commitment to to getting this right.

I think the good news for SFMTA is that your financial needs are going to be priority number one for many of us in next year's election at a time when the viability of our transit system, which includes MTA but isn't limited to MTA, is regarded as essential to our economic recovery.

The bad news for SFMTA is that your financial needs are gonna be priority number one, and there's gonna be a lot of scrutiny um that is put upon you.

Um and I just urge everybody to to this is we can't have unforced errors.

Um this is gonna be really important.

I represent a downtown district.

We have to get things right.

Um we're when if and when we go to voters to ask them to dig down deep, they need to have confidence that their money is going to be well spent and carefully scrutinized.

Um so we just, you know, this is this is really important.

Beyond that, there's uh, you know, as a district six supervisor, I this is uh an area that is under some distress.

Um so I appreciate I'm gonna I'm supportive of this and I really appreciate that Mills is there.

I appreciate that you know there have been some some vacancies.

I did want to ask what what is the current situation at the fifth admission garage in terms of um we're currently in the process of um terminating uh the occupation for two of those spaces, and then um hopefully we will be able to release those.

Okay.

Yeah, I'm I'm hoping that um I know that you know with Bloomingdales and the some issues at the San Francisco Center, um it's a difficult time right now.

I have some optimism about the Metrion and some other things that hopefully will contribute to um a resurgence in this area.

I'm cautiously optimistic.

I'm grateful to MELS and just appreciative of everybody's commitment to making sure that we uh we get things right.

I'm happy to support this.

Thank you.

Supervisor Sauter.

Thank you, Chair.

Um this is clearly um you know something that you're having to clean up, and I recognize that you're coming into this.

So um thank you for getting us back on track here, and clearly a lot of mistakes were made um to uh to folks that were in your seat prior, so thank you for cleaning it up.

Um of the sounds like 15 more leases to kind of sort through that had this verbal agreement, this lease with MELs, you're um proposing to have at a percentage of gross sales, but I think you're indicating that for those other 15.

How do you anticipate that going?

Will it be a discussion?

Are you trying to get them to adopt one model or the other?

How do you anticipate that happening?

We may continue with the current model of percentage receipts because the economy has not yet rebounded enough to have the full faith of the businesses that they can provide a base rent.

So we may be negotiating that point, but it may follow similarly to Mills.

How does this compare to practices with other um real estate in the city and then also maybe zooming out others in your industry in other cities?

You know, I believe it's probably quite different from the airport or the port, and it's also very different because of the location.

MTA has various parking garages throughout the city and in downtown, which is unfortunately the mall is 93% vacant right now.

So it's very hard hit with the airport.

They have a closed environment that's very safe and secure.

Um people are in transit and going through the airport, and so they have um what I would say is sedier source of business and traffic.

The port is also a tourist destination, and their properties are also quite different from what MTA has.

And so while I understand an RFP is probably preferred and it sounds very good, it is not always applicable to the MTA's real estate portfolio because of our various locations and truthfully the limitations of some of our spaces.

So I don't know that it's an apples to apples comparison, it might be more of an apples and oranges and bananas comparison.

Um but I understand the concern that we are getting market rate and trying to maximize the revenue for the city, and that is also our shared goal.

Um, and in this way, we're trying to keep the spaces occupied, which is very difficult in some of these areas to do that, and also allow the businesses sustain themselves and grow if possible.

Okay, thank you.

And I think we all want to be partners in helping you get this back on track, it's important.

Thank you.

I think actually I would I don't know if I really completely agree that that is what the port is doing.

Um, I definitely think SFO has different strategy in terms of build out their portfolio with concierge and different kind of like and with airline or with um retail spaces.

I think they have different strategy with it.

I definitely think though uh port has a different strategy, not utilizing an RFP.

In fact, it was a it was a discussion that we had with uh as a port.

Um they actually use a broker in a specific a broker partnership to identify spaces appropriate for port spaces.

They I mean they have cruise terminal, they have restaurant spaces, they have retail spaces.

I think there are really different needs and storage and in industrial spaces.

Um I would strongly encourage you to consider uh just different approach, uh, but most importantly, if I may, a backup plan, uh a backup plan in the next six months uh while you undergo these negotiations to try to bring to date these leases.

I would strongly encourage to also uh have alternatives should these space become vacant, then what is your next step to fill them because your negotiation uh try to bring them to market rate rent uh is not successful.

So for some of these spaces, due to like you said, you know, they are not the typical retail space or whatever commercial space that because of again the situation of of your um use uh addition to on or on top of or adjacent to your commercial space.

Um so I look forward to hearing and more of that uh when you return in January with the TET lease uh to kind of give us a little bit of initial update.

Just just to um speak further on that point, I am working with the TJPA, and they have an RFP for brokerage services, and we're trying to piggyback off of that for the spaces that we have in that area, um, because you know it is based on that location for their brokerage.

But yes, we are obviously looking at alternatives, thank you.

Of course, and so we'd love to see that report back along with your TET lease uh agreements when you return in January.

Thank you.

Thank you.

Um seeing no more uh questions and uh let's go to public comment on this item.

We are now opening public comment for this item number five.

If you have any members of the public who wish to address this committee, yeah, I'm Matt Worth.

I'm I am uh counsel for Mel's Drive In.

Um I don't have a presentation for you, but I wanted to introduce Gabriel Mendez, who's one of the owners of SFCNC.

He's here.

If you have questions, um I think just listening to the to uh the discussion, you know, I would just really encourage the city uh not only for MELS but for all of downtown, you know that an 8% gross uh rent agreement puts you guys in partnership with business, and it's the direction the city needs to go in.

Um, unless you have questions about the lease, I would just uh thank the city attorney's office for their uh professionalism in negotiating all this, and uh hope hope you'll approve the lease.

So thank you.

Thank you much for addressing this committee.

And with no other speakers, madam chair, that completes our queue.

Thank you.

And seeing no more pop no more public comment, public comments now closed.

Vice Chair Dorsey.

It occurs to me that I also forgot to thank the city attorney for their work in this, and I know especially when it comes to leases, there's a lot of unsung heroes that are doing this work.

So my uh expression of appreciation to uh our deputy city attorney and everybody at the city attorney's office who's doing that work.

Thank you.

Um colleagues, I think today uh it I we are all in supportive of the mouse drive-in lease itself, and what I think thank you so much, SFMTA, especially for the news staff that is at the real estate uh division for your work on this.

I think though, due to the nature of how it came about, uh, meaning the lack time between what it was during COVID to now what it is, um, with uh uh overwhelming long period without documentation uh and without approval from the city attorney in terms of the lease amendments and the recommendation of the budget and legislative analysts.

Um I think that and that I think it should be um allowing send a signal to our colleagues at the full board, letting them know this is a problem, but I think that um SFMT is working to fix um again.

This is I do not think that this is our lease uh but truly is really on the city.

So it's not a reflection on Mouse Drive-in, but SFMTA.

Um, and that I would like to make the motion to move this forward, um, but without recommendation at this time.

Uh again, not a reflection on Mouse Drive In, our partnership with them, but much more on SFMTA got to get it together, and hopefully by the time you come back with TEDs, uh we will have more uh progress made.

Uh so with that a motion to um this to full board without recommendation and a roll call, please.

And on that motion that this resolution be referred to the full board without recommendation, vice chair Dorsey, Dorsey, I.

Member Sauter, Soder, I, Chair Chan.

Aye, Chan I.

We have three eyes.

The motion passes.

I also do want to indicate that I will be voting in support of this lease uh at full board.

Thank you.

Um with that, Mr.

Clark, please call item number six.

Yes, item number six is a resolution approving the fourth amendment between the city and county acting by and through the Office of Contract Administration Handlistic International Limited for Class A Biosolids uh Management Services for an increased amount of approximately uh 20.7 million, and a total not to exceed amount of approximately 36.7 million to extend the term by two years from June 30th, 2027 for a total term of July 1st, 2022 through June 30th, 2029, and to authorize the Office of Contract Administration to make necessary non-material changes to the amendment prior to its final execution by all parties that do not materially increase the obligations nor liabilities to the city and are necessary or advisable to effectuate the purposes of the agreement.

Madam Chair.

Thank you.

And today we have uh the city administrators's office.

Good morning, Chair Chan, Supervisors Dorsey and Sauter.

I'm Sophie Hayward, and I'm here from the Office of the City Administrator on behalf of the Office of Contract Administration.

And we are seeking a recommendation of approval to amend the existing contract with Listec International Limited for Biosolids Waste Management.

The amendment we seek would increase the not to exceed amount to 36.67 million and to extend the term by two years to June 20th, 2029.

Uh just by way of background, uh the city's wastewater is treated at two facilities: the Southeast Treatment Plant and the Oceanside Water Pollution Control Plant.

Those treatment plants convert our waste into what is known as Class B biosolids, and then at that point, Listec International is responsible for converting that Class B product into what is known as Class A biosolids, things like liquid fertilizer and compost.

That conversion of our biosolids into Class A products allows us to actually send less waste to landfills because we produce compost and fertilizer, and that complies with state law SB 1383.

Uh this contract is used exclusively by the PUC's wastewater enterprise, and the contract was executed based on a low bid solicitation by OCA conducted in March of 2022.

The contract was awarded to LISTEC, which was the only contractor to submit a qualified bid by the deadlined.

Our request to extend the term as well as the not to exceed amount is based on the average monthly spend and the estimated annual usage.

That concludes my presentation, but I'm joined today by representatives of OCA and the PUC if you have additional questions.

Thank you.

Thank you.

Item six is a resolution that approves an amendment to a contract that the Office of Contract Administration procured with LISTEC International.

The amendment increases the contract value from 15.9 to 36.7 million dollars, and then exercises an existing option to extend the agreement from June 2027 to June 2029.

The contract basically allows PUC's wastewater enterprise to divert biosolids from landfill to agricultural uses.

LISTEC takes those products and processes them so that they can be safely used in agriculture.

PUC is doing this to comply with the state law that as of 2024 required 70 utilities to divert 75% of biosolids away from landfill.

The PUC reports that it's actually diverting 100% of its biosolids.

That the wastewater division produces every year.

In terms of fiscal impact, this contract's about a 5.1 million dollar a year cost, which then drives the increase in the not to exceed amount by about 20 million dollars.

We summarize the basis for the contract budget on page 20 of our report, and note that the contract is funded by wastewater ratepayers.

We recommend approval of item six.

Thank you.

Thank you, Chair Chan.

I guess I do this is just a larger issue.

I'm always concerned when there's when we do a bid solicitation and there's one bidder.

Um, and I'm not sure if this would be a BLA question or are there other, is there anything we're doing in our bid solicitations that or could do in our bid solicitations to improve the competitiveness of our competitive bidding?

Good morning.

My name is Lynn Ropola.

I'm with the Office of Contract Administration.

The reason why there was only one bidder in 2022 is because there's a very limited field of suppliers that work in this market.

In fact, there was another supplier at one point, uh Donali, who chose to exit the business.

So there are really not that many suppliers that can do uh what wastewater needs to be done.

That's the primary reason.

But our office makes a very strong effort in reaching out to all suppliers.

Are there other wastewater enterprises that use other providers, or is this one that provides to other jurisdictions?

I have with us uh Joanne Yee, who's with Wastewater, who's probably more equipped to answer that question.

Good morning, supervisors.

Um, that's a great question.

So this contract is specifically for LISTEC to convert Class B biosolids to Class A biosolids.

We do have a separate contract with Cyneguil for land application, so that's directly applying to Class B biosolids onto the fields.

So in that sense, we do try to diversify.

But land application is a short season.

Once it starts raining, once the fields get wet, it depends on the farmers too.

So it's it's limited in terms of this specific contract.

List tech is open year-round, so it provides um our ability to send it on weekends on um in the winter whenever it rains.

Okay.

All right, thanks.

Thank you.

And uh with that, we will go to public comments on this item.

Yes, we're opening public comment on this item number six.

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 closed.

Colleagues, I would like to move this item to full board with recommendation and a roll call, please.

And on that motion to forward to the full board to the positive recommendation.

Dorsey, aye, member Sauter Sauter, aye, Chair Chan.

Aye.

Chan, aye.

We have three ayes.

The motion passes.

Mr.

Clerk, please call item number seven.

Yes, item number seven is a resolution authorizing the sheriff's office to enter into a contract with Aramark Correctional Services Inc.

for jail food services for a total contract amount not to exceed 22 million and a term of five years to commence on November 1st, 2025, with two two-year options to renew.

Madam Chair.

Thank you.

And we have our sheriff's office here.

Good morning, Chair Chan, uh, Vice Chair Dorsey Supervisor Sauter.

My name is Patrick Leong.

I'm the chief financial officer for the Sheriff's Office.

This morning we're asking for the committee's recommendation, positive recommendation for our Airmark jail food service contract.

Just as an overview, Eramark has provided food services for the San Francisco County jail since 2012.

The new contract that's being proposed is for 22 million dollars.

There was a competitive bid solicitation uh per admin code chapter 21 requirements.

We did receive two bids for which Airmark was the uh the highest scored proposal, and um the awarded uh vendor.

The term of the contract is from November 1st, 2025 until October 31st, 2030.

The contract also incorporates good food purchasing practices, and it adheres to uh the board and state of community corrections Title 15 requirements.

Within the contract, there's a provision that the pricing will be held firm for the first 24 months of the agreement.

Some of the included services, the Airmark is to provide three meals daily for inmates and also staff at all the county jails.

The service also includes coffee service and garbage service, and included within the contract is their in-to-work program, which is a training and certificate program that trains uh incarcerated individuals of safety food handling, and there's a credentialing program that's based off of SERVSAFE, which is a credentialing program administered by the U.S.

National Restaurant Association.

This last slide kind of shows the jail count patterns for the last eight years or so, and what you see within this graph is that the jail population for the last several years have increased, and right now we're we've the jail population is basically equivalent to what it was pre-pandemic.

Um I do want to make one note that the BLA had rec made a recommendation for us to amend the contract terms so that the option years within the contract is consistent with what is stated in RFP, and uh we did make that change.

If any members of the committee has any questions, I'd be more than happy to answer them.

Thank you.

Item seven is a resolution that approves a new contract between the sheriff and Aramark correctional services.

Uh, this contract has a five-year term that begins November 1st and a not to exceed amount in the resolution of 22 million dollars under the contract airport the Aramark provides uh food for the jail system both for inmates and for staff who work there.

We summarize the contract budget on page 25 of the report.

You'll see the 22 million dollars is uh sufficient to pay for the contract cost over that five years, um, assuming no escalation.

So the contract locks in food prices for two years, but if there's any escalation in food prices beyond that, which is allowed under the contract based on CPI, um, the sheriff may have to come back to this board to request an increase in the not to exceed amount, even before the option to extend is exercised.

Um, we're also noting that there's no cost increase between the current food service and the new food service going forward.

So, this is about a 4.8 million dollar year contract.

This cost this cost is funded by the general fund, and that cost will basically remain the same for the next two years so long as the jail population remains the same.

Uh, and we do have a recommendation just to align the contract's total term with the total term that was advertised in the RFP, and it sounds like the sheriff agrees with that.

Thank you.

Um, I have two questions specifically about this.

I think one is the most recent we passed a good food policy.

Um, how has and any of if I understand correctly?

I think Airmark has consistent been consistent since 2012.

But um, could you just elaborate a little bit about um as we consider extending those contract?

How will and or will IronMark be able to comply to the good food policy that recently passed?

Sure.

Thank thank you for that question.

The good food purchasing provision that was included in the prior contract, and it's carried over to this contract.

Um we did have a um email from apologize, I don't remember the person's name, but the point of contact for the good food purchasing program.

Um we have been touching base with them.

We're going to work with good food purchasing program and also with a vendor on the next steps on any changes that's needed for this contract.

Um, at least for what Airmark has been able to achieve.

Some of the highlights from the existing program, they've reduced uh processed meats by five percent within the proteins that they've provided.

They've increased uh the number of uh or they've reduced the number of added sugars by 10 percent of the daily value.

Um some of the options that they've also provided, um they've increased the number of uh healthy beverage options they are providing one percent milk during um uh different meal times, and we do expect to continue working with the vendor and also with good food purchasing.

I think one important highlight is within the old contract, the good food purchasing program, the standards has changed from what the uh original contract was the one that just expired, to what the current standards are.

And so the for the sheriff's office, we do intend to work um with the good food purchasing staff and with the vendor on um making sure that any necessary changes are needed to better align what services are being provided with some of the practices and recommendations of um the good food purchasing program standards.

Thank you.

Um, and as you mentioned about Surf Safe as a training program, that uh looks like the requirement is to have 40 a minimum 42 incarcerated individuals uh to be trained and certified.

Uh is that an annual number uh by or the entire of the contra entirety of the contract?

That I'd have I would have to check back.

I I know that the 45 or the 45 was a minimum number, uh, but I'd have to check on the details on that.

We'd love to uh I'm supportive of the the contract uh today um uh in the events that it does get approved by this body today and out of to full board, would love to do to get a little bit of information from this today till we vote on it, which is not next week but the week after, um, to have both uh just previously just that the the let us know like how many individuals actually were trained and certified uh from the previous contract and the projection of uh what we expect to see with the uh upcoming contract term.

Sure.

Thank you.

Um with that, I don't have any additional question.

Let's go to public comment on this item.

Yes, we're opening public comment for this item number nine.

Oh, sorry, item number seven.

If we have any members of the public wish to address this committee, madam chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Colleagues, I would like to first amend the uh legislation as proposed by the budget and legislative analyst, amending uh a two-year options to renew to one-year options to renew, and then to send the amended legislation to full board with recommendation and a roll call, please on that motion.

And on that motion, to amend the resolution to correct the uh extension options from two two-year options to two one year options, and to forward this resolution to the full board with a positive recommendation as amended.

Vice Chair Dorsey.

Dorsey, I, Member Sauter, Sauter, aye, Chair Chan.

I chan aye.

We have three.

The motion passes.

And Mr.

Clerk, please call item number eight.

Yes, item number eight is a resolution retroactively authorizing the police department to accept an expendate grant in the amount of approximately 600 four fifty-four thousand from the board of state and community corrections for the Edward Byrne Memorial Justice Assistance Grant Equipment Hand Training Program to procure equipment and services for the criminology laboratory with the project period beginning on October 1st, 2025 through September 30th, 2026.

Madam Chair.

Thank you.

And today we have uh our police department here.

Good morning, uh, Chair Chan, Vice Chair Dorsey, and uh supervisor software.

Uh, my name's Mark Powell.

I'm here from the San Francisco Police Department.

I'm the forensic services director, and we're just hoping for um approval to accept and expend the Edward Byrne Memorial Justice uh Assistance Grant.

So I'll just take you through that a little bit.

Uh the funding purposes for equipment and training for six hundred and fifty four thousand dollars, six hundred six hundred and fifty four thousand six hundred nine dollars.

Um, $600 $654,609.

What we're gonna use it for is to purchase equipment for our drug chemistry section of the crime lab and the latent print section.

So for drug chemistry, we're looking to buy an instrument that's called a DART or direct analysis in real time mass spectrometry.

This will be a significant improvement for our screening.

So right now they use color tests to kind of see where what route to test the drugs.

This will give them more specific information on what the drug is and allow them to have quicker analysis and more accurate.

So this will be really helpful for us as we're we just got accredited for testing.

We're going to begin testing.

So we have a limited number of staff, so this will kind of help us do more with less.

What we do is we we have chambers that we fume them that allows us to develop latent prints.

We process a lot of guns.

So this will be an increase in capacity at the lab.

We'll also have a portable chamber that we can bring out to the field if necessary.

And then we're also going to upgrade our image capture.

So when we when we develop the print, we take a picture of it and put it into the into the AFIS database for searching.

So this will allow us to upgrade that, which is about 20 years old.

So those are kind of the purposes of the grant and how we're going to use the funding and if you have any questions.

Vice Chair Dorsey.

Thank you, Chair Chan.

I am happy to support this.

The reason the one thing I wanted to ask about was mass spectrometry, mass spectrometry.

Um I think I've also had this come up in the context of drugs that we're checking for in the drug supply with the Office of the Chief Medical Examiner.

I'm aware that we do um we have uh HSA now I think does some evaluation for as a condition of benefits.

I don't know if that includes drug testing, but I know we have contingency management programs that do that do um drug screening.

It's from what I understand mass spectrometry, just God, I've got to learn to to pronounce this.

Um is the gold standard.

Um other thing that I have hopes for in mass spectrometry, there I said it right.

Um, is expanding this to drug checking.

Um, for example, people who that there is a harm reduction approach that I think we should probably be doing for people who go to nightclubs or the Raves and if they want to check no questions asked to make sure that what they think is ecstasy is not ventilable, for example.

Um there's a lot of applications as a city where we might want to make in investments in this technology.

Um is this something that you are do the toxicologists talk to one another across city agencies on this on what technologies we have?

I know uh Luke Rota, he's the director of the ME's office talks lab.

So we we're we're pretty friendly and we're both part of professional organizations together.

Um so he's he's really testing uh from body fluids, and we're our lab will be kind of testing from CS drugs, so kind of kind of different realms of the of the same thing.

But you're you're right, mass spectrometry is the is the gold standard.

And it's it is something as I understand it, where it's um your results are near real time.

I mean, these these are this is something where we're not getting it doesn't take uh we don't have to send it out for to a lab and then have it come back in a week.

So this instrument would be in real time, but it would be one step of the process.

So it would kind of guide our further testing route to get results out as fast as possible.

So uh uh for the the best practice is to have a few different kinds of tests to confirm a drug, at least for the solid phase.

Um this instrument is a lab-based instrument, but there are portable devices available, but the limitations of those is that if it's a mixture of of uh compounds, then it it cannot sometimes it's not as good at seeing those low level compounds, which is what you'd probably be worried about as far as like a contaminated drug.

Right.

Okay.

Yeah, as a budget matter, I don't I don't want to take up a lot of time with this.

It was just uh it it's something that I every time this comes up.

I think this is there is a lot of applications in a lot of city departments in the era that we're in.

Um so I just wanted to ask about that, but uh I'm happy to support this.

Thanks.

Thank you.

Well, finally, CSI turning into 21st century.

We appreciate that.

Uh let's go to public comment on this item.

Yes, are we have any members of the public?

Wish to address this committee regarding this item number eight.

Now is your opportunity.

Seeing no public commons, public commons is now closed.

What is your will, Supervisor Dorsey?

I would like to um make a motion to approve this grant and send it to our full board with positive recommendation.

Roll call, please.

And on that motion by Vice Chair Dorsey to forward this resolution to the full board with positive recommendation, Vice Chair Dorsey.

Dorsey, I member Sauter Soder.

Aye, Chair Chan.

Aye.

Chan, I we have three ayes.

Thank you.

Uh Mr.

Clark, do we have any other business before us today?

Uh Madam Chair, that completes our business.

The meetings adjourned.