Budget and Finance Committee Meeting Summary - February 25, 2026

The Budget and Finance Committee of the San Francisco Board of Supervisors met on February 25, 2026, at 6:15 PM UTC. Chaired by Supervisor Connie Chan and joined by Vice Chair Matt Dorsey and Member Supervisor Denny Souter, the committee considered several legislative items and held hearings on the city's fiscal outlook. Key actions included continuances, approvals of contract amendments, and a supplemental appropriation, along with discussions on the multi-year deficit and revenue trends.

Public Comments & Testimony

• Rocio Molina, Director of the Human Services Network, representing over 50 nonprofit organizations, urged the committee to increase the cost-of-doing-business allocation for FY 2026-2027 beyond the proposed 1.4%. She noted that nonprofits face escalating costs similar to the city, including a 13% increase in food costs and 6–10% increases in health insurance, and that a 1.4% allocation would only cover minimum compensation ordinance requirements, potentially leading to program closures.

Discussion Items

Item 1: Mobile Food Facility Permit Ordinance Amendments

• Chair Chan noted that Supervisor Jackie Fielder requested a continuance to March 4, 2026, to allow further dialogue on the legislation, particularly to avoid penalizing micro-vendors due to cooking facility restrictions. The committee voted unanimously to continue the item to the March 4 meeting.

Item 2: Lease Agreement for 111 Pine Street (SFERS)

• Vice Chair Dorsey raised policy concerns about consistency with the Civic Center area plan and moved to continue the item to the call of the chair, stating productive conversations are ongoing. The motion passed unanimously.

Item 3: YMCA Mental Health Services Contract Amendment

• The Department of Public Health (DPH) presented an amendment extending the agreement with YMCA of San Francisco for outpatient mental health services to children and youth through June 30, 2028, increasing the contract value by approximately $1.6 million to a total of $11.6 million. DPH proposed amendments to correct language by removing references to “substance use disorder prevention services” and changing the start date from January to July. The Budget and Legislative Analyst (BLA) reported the contract serves about 50 clients per year, with actual unduplicated clients reaching 76 in FY 24-25. The committee adopted the amendments and forwarded the resolution to the full board with recommendation, passing unanimously.

Item 4: Treasure Island Affordable Housing and Sustainable Communities (AHSC) Grant

• Vice Chair Dorsey expressed strong support, noting the $45.1 million state investment advances a 150-unit 100% affordable housing project and infrastructure improvements (ferry service, pedestrian/bike ways). The Acting Director of the Treasure Island Development Authority (TIDA) described the award: $30 million as a loan for housing and $15.1 million as a grant for transportation improvements. Non-substantive amendments from HCD were read into the record. The committee approved the amendments and forwarded the resolution to the full board unanimously.

Items 5 and 6: Parking Lot Management Contract Amendments (SFMTA & Port)

• SFMTA presented amendments to add four Port-owned parking lots to existing operator contracts (LAZ Parking and IMCO Parking), increasing contract values by $9 million and $12 million respectively. The BLA noted the Port will continue to receive about $4 million annually in revenue from these lots. Supervisor Sauter asked about flexibility for future uses (e.g., Fisherman’s Wharf area); Port staff confirmed the new structure allows more direct control and easier termination. The committee forwarded both resolutions to the full board with a unanimous vote.

Item 7: Supplemental Appropriation for Emergency Management and Human Rights Commission

• Sophia Kittler (Mayor’s Budget Office) explained the $4.15 million supplemental from the General Reserve: $4 million to the Department of Emergency Management (DEM) for expanded street conditions staffing (overtime for police and public works) related to drug market response and special events (October 2025 – March 2026), and $150,000 to the Human Rights Commission to backfill lost state grants for a basic-income program serving survivors of domestic violence/human trafficking. The BLA noted that drawing from the General Reserve reduces available funds for the next fiscal year and recommended performance metrics. Vice Chair Dorsey raised concerns about police overtime efficiency but expressed support. Chair Chan requested a written record of reimbursement agreements for special events (e.g., Super Bowl) before the next meeting. The committee forwarded the ordinance to the full board with recommendation, passing unanimously.

Items 8, 9, 10: Mayor’s Budget Instructions, Five-Year Financial Plan Update, and Controller’s Six-Month Budget Status Report

• Mayor’s Budget Instructions (Item 8): Sophia Kittler presented the fiscal outlook, highlighting a projected two-year deficit of $936 million (FY 2027-2028 and FY 2028-2029), driven by expenditure growth outpacing revenues. Key factors include a $300 million annual revenue loss from the federal HR 1 bill (Medi-Cal and CalFresh eligibility changes), salary/benefit cost growth of $829 million by FY 2030, and operating cost increases. The Mayor directed departments to identify $400 million in annualized spending cuts through restructuring, vacancy deletion, program elimination, and shared services.
• Five-Year Financial Plan Update (Item 9): Continuing the presentation, Ms. Kittler noted risks including state budget shortfalls, federal grant policy changes, and assessment appeals. The administration plans to use reserves and fund balance as smoothing mechanisms but emphasized structural cuts are necessary.
• Controller’s Six-Month Budget Status Report (Item 10): Michelle Allersmith (Controller’s Office) reported a current-year revenue surplus of $214 million, driven by stronger-than-expected business taxes (tech sector growth) and real property transfer taxes (large commercial transactions). However, $80 million in expected COVID FEMA reimbursements were removed due to uncertainty. Departmental expenditure savings of about $56 million net were offset by overtime costs in public safety; the Sheriff’s Department will require a supplemental appropriation. The fund balance is projected at $525.2 million, with $229.6 million already appropriated for FY 2026-2027. Chair Chan requested detailed data on transfer tax transactions by value tier.

Key Outcomes

• Item 1: Continued to March 4, 2026 (unanimous).
• Item 2: Continued to the call of the chair (unanimous).
• Item 3: Adopted amendments and forwarded to full board with recommendation (unanimous).
• Item 4: Adopted amendments and forwarded to full board with recommendation (unanimous).
• Items 5 & 6: Forwarded to full board with recommendation (unanimous).
• Item 7: Forwarded to full board with recommendation (unanimous).
• Items 8-10: Heard and filed (unanimous). The public comment from Rocio Molina (Human Services Network) was noted; the committee did not act on her request during the hearing.