Good morning.

The meeting will come to order.

Welcome to the February 25th, 2026 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 Denny Souter.

Our clerk is Brent Halipa.

I would like to thank Jamie Averchery from SACF TV for broadcasting this meeting.

Mr.

Clerk, do you have any announcements?

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 uh uh 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 chair left by those doors.

If you wish for your name to be accurately recorded for the minutes, alternatively, you may submit public comment in writing in either of the following ways.

Email them to myself, the budget and finance committee clerk at BRENT.jal I P A at SFGOV.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.

Good 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 3rd, unless otherwise stated.

Madam Chair.

Thank you.

And Mr.

Clark, with that, um please call item number one.

This item number one is an ordinance amending the health and business and tax regulations codes to revise the definition of a mobile food facility permit.

Had definitions for compact mobile food operations, mobile support unit, and permitted auxiliary conveyance permits to reflect recent amendments to the California Retail Food Code, revise existing definitions of various other terms to reflect state law definitions in that code, and expand the definition of stadium concession to include food foods facilities in stadiums with a seating capacity of 5,000 or more.

Establish annual permit and plan check fees for auxiliary conveyance, compact mobile food operation, and mobile support unit permits and wave license and permit fees for compact mobile food operations, amending the public works code to include a definition for compact mobile food operations and to expand the Department of Public Works Street Vending Authority to include regulation of compact mobile food operations and to require that department to consult with the Department of Public Health and the Fire Department when issuing rules and regulations that regulate street vendors.

Madam Chair.

Thank you, Mr.

Clark.

And um with that, though, I know that uh Supervisor Um Jackie Fielder has requested a continuance until next week, March 4, for their uh ongoing dialogue um to really improve this legislation so that we can make sure uh some of our uh vendors, uh especially the really micro um uh vendors will not be left behind and be um punished um due to the uh restriction um of cooking facility um with this legislation so that she has recredit for this requested for this to continue to next week, March 4.

And uh with that, let's go to public comment on this continuance.

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

If we have any members of the public, wish to address this committee regarding the continuance.

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Colleagues, I would like to make the motion to continue this item to our next budget and finance committee meeting on March 4th.

A roll call, please.

And on that motion to continue this ordinance to the March 4th meeting of this committee.

Vice Chair Dorsey.

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

Aye.

Chan, I we have three ayes.

The motion passes.

And Mr.

Clerk, please call item number two.

Yes, item number two is a resolution approving and authorizing the director of property on behalf of the San Francisco Employees Retirement System to execute a lease agreement with Doublewood Investment Inc.

as landlord for use of a portion of 111 Pine Street, consisting of approximately 47,000 rentable square feet for an initial term of 10 years with two five-year extension options to renew in 12 months of rent credit with an annual base rent of approximately two million with three percent annual increases.

Uh S efforts to contribute up to approximately 4.7 million on tenant improvement, effective upon approval of the resolution and execution of the lease by the director of property, and authorizing the director of property to execute any amendments, make certain modifications, and take certain actions that do not materially increase the obligations nor liabilities to the city.

Madam Chair.

Thank you, Mr.

Clerk and Vice Chair Dorsey.

Thank you, Chair Chan.

So this lease has raised some policy questions for me, including whether or not it is consistent with the Civic Center area plan, which I wish had been addressed earlier in the process.

But the good news is we are having productive productive conversations on some of those policy considerations now.

So I would like to make a motion to continue this item to the call of the chair.

Sounds good.

And so let's go to public comment on the continuance.

Yes, we are opening public up and for this item number two.

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

Seeing no public comments, public comment is now closed.

How would you let's uh that was the motion, correct?

And so let's roll call on the motion to continue to the call chair.

And on that motion by Vice Chair Dorsey, do we continue this resolution to the call to Chair?

Vice Chair Dorsey.

Dorsey, I member Soder, Sodger, I, Chair Chan.

Aye.

Chan, I we have three ayes.

The motion passes.

Yes, item number three is a resolution approving amendment number two to the agreement between the city and county acting by and through the Department of Public Health and YMCA of San Francisco to provide mental health and substance use disorder prevention services to children and youth to extend the term by one year from June 30th, 2027 for a new term of January 1st, 2018 through June 30th, 2028, and to increase the amount by approximately 1.6 million for a new total not to exceed amount of approximately 11.6 million, and to authorize DPH to enter into amendments or modifications to the agreement that do not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the agreement or this resolution.

Madam Chair.

Thank you.

And we have Department of Public Health here.

Good morning.

Thank you, Chair Chan, Vice Chair Dorsey and Supervisor Sauter for taking the time to hear this item today.

My name is Faranaz Farman, and I'm the director of the Children Youth Family System of Care and Behavioral Health at the Department of Public Health.

Next slide, please.

The Department of Public Health seeks approval to extend its agreement with YMCA of San Francisco for outpatient mental health services to children, youth, and families.

This amendment extends the term one year from June 30th, 2027 to June 30th, 2028 for a total of 10 years, July 1st, 2018 through June 30th, 2028.

The amendment increases the not to exceed amount by just under 1.6 million, bringing the total to just under 11.6 million.

In terms of the contracted services, the annual award for this fiscal year is $806,683.

And this includes serving 111 unique youth.

This includes outpatient specialty mental health services to children, youth, and families on Medi-Cal and educationally related mental health services or ERMS on behalf of the San Francisco Unified School District.

Services include comprehensive assessments, individual and family therapy, case management, and it's predominantly delivered in the community, such as schools, homes, family resource centers, and YMCA sites.

Next slide, please.

As you can see on this side, their office is located in the uh Japan Town area, but as noted, services are predominantly delivered throughout the community.

For example, the ERM services for their ARM services, they're delivering uh services across 17 different San Francisco Unified School District sites as visualized on this map.

It may look like there's only 16 pin drops, but in the civic center, there's two campuses close to one another.

Next slide, please.

In conclusion, DPH agrees with the BLA recommendations and respectfully requests approval of this item.

But before we do that, we have several amendments to introduce, correcting the legislation so that it accurately reflects the contract, which focuses on outpatient mental health services.

On page one, lines one through three, we would like to delete substance use disorder prevention services.

On line one, I'm sorry, on page one, lines five through eight, we are deleting substance use disorder prevention services.

On page one, line nine, we are deleting the word January and adding the word July.

On page two, lines two and three, we are deleting substance use disorder prevention services.

On page two, line five, we would like to delete January and add July.

And on page two, lines nine and ten, we are deleting substance use disorder prevention services.

Thank you.

Item three is a resolution that uh approves an amendment to TPH's agreement with YMCA Urban Services.

The amendment extends the agreement through June 2028 and increases the contract value to 11.6 million dollars.

Under this contract, DPH funds YMCA to provide outpatient mental health services to youth, primarily in the Bayview, uh Petrero Hill and Western Edition neighborhoods.

The contract serves about uh about 50 clients per year.

Uh and we show the performance of the contract on page 10 of our report, and then you can see the fiscal impact of this amendment on page 12.

This is about an 800,000 a year program.

Only 30% is funded by the general fund.

The remaining um costs are funded by Medi-Cal.

Uh, and we do recommend that you adopt the changes to the resolution to correctly reflect the contract.

Thank you.

And we do see that you know um that it was contracted for 50 clients serve, but then they exceeded the unduplicated client serve.

I really do appreciate um the services, it's like 50, and then they end up serving 76.

In fiscal year 24-25, yes.

Yeah, and uh unduplicated ones, and so I do appreciate the willingness to commit to the surveys uh with the city for the city.

And so with that, let's uh supervisor souter.

Thank you, Chair.

Um, can you give a little more detail on the shortfall and why we got into the situation because it seems like a pretty sizable number?

Sure.

Um, you'll see sort of the table of funding across different fiscal years on page 12 of the BLA report and um in part the la the additional um the funds that are needed for to cover 2627 are in part because of increases of cost of doing business, but also between fiscal year 2425 to fiscal year 2526, you'll see an increase of about a hundred and ninety-one thousand dollars.

We shifted money from a different contract they have serving probation youth due to low referrals and difficulty with engagement and and a decreased need in that contract, but an increased need in the outpatient programming money shifted uh into this outpatient contract in 25-26.

So, in part, there's the shift to this funding, in part it's cost of doing business increase.

Okay, thank you.

Let's go to public comment on this item.

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

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

I want to continue to encourage Department of Public Health to diversify its funding sources outside of city funding.

Um good to see that you have increased the Medi-Cal states and federal reimbursements.

And with that, I'd like to move this first um amend this um item number three, um, as proposed by Department of Public Health, changing the um date from January to July in strikeout substance and use order of prevention, and to move this amended item to full board with recommendation, a roll call, please.

And on that motion to accept the amendments as so offered by the department, and that we refer this resolution to the full board with recommendation as amended.

Vice Chair Dorsey.

Dorsey, I.

Member Sauter.

Sauter, I, Chair Chan.

I.

Chan, I.

We have three eyes.

The motion passes.

Thank you.

And Mr.

Clark, please call item number four.

Item number four is a resolution authorizing the Treasure Island Development Authority to execute the standard agreement with the California Department of Housing and Community Development under the Affordable Housing and Commun and Sustainable Communities Program for a total award of approximately 45.1 million, including 30 million dispersed by HCD as a loan to IC 4.3 family housing LP for a 100% housing affordable housing project at Treasure Island parcel IC 4.3 and approximately 15.1 million to be dispersed as a grant to the authority for public transportation improvements on Treasure Island for the period starting on the execution date of the starting agreement through March 30th, 2046, and authorizing the authority to accept and expend the grant of approximately 15.1 million for transportation, streetscape and pedestrian improvements, and other transit-oriented programming and improvements as approved by HCD.

Madam Chair.

Thank you.

And we have the city administrator's office here.

But before we start, Vice Chair Dorsey.

Thank you, Chair Chan.

I just wanted to say that um Treasure Island, you know, which I represent uh represents something that has been sadly too rare in San Francisco for several years now, and that's forward momentum.

This 45 million dollar state investment reflects the kind of long-term discipline discipline growth strategy that really benefits our city and that our city needs.

This item advances a 150 unit 100% affordable housing project.

Just as importantly, it invests in the infrastructure that makes the housing viable and sustainable, including uh ferry service, pedestrian improvements, bike ways, stronger transit connectivity.

There are challenges, infrastructure build-out, long-term resilience, the pace of development, but that's really precisely why this kind of state partnership matters.

It strengthens the foundation that the neighborhood needs to grow.

And at a time when we've been grappling with population decline and affordability pressures and young people leaving San Francisco, I think Treasure Island really is telling a very different and exciting story.

It's one of the few neighborhoods that's actually just not just growing but growing younger.

The Chronicle re did a feature story on this recently that Treasure Island now has the highest percentage of residents between the ages of 18 and 44 of any neighborhood in the city.

I think the median age is uh is just thirty.

Um there's a lot of use of the ferry.

Um so this is really you know, people are really fulfilling the promise of what Treasure Island is supposed to be.

Um and I think if San Francisco is serious about the making the progress into the 20th century that we need, expanding affordable housing, building neighborhoods that are sustainable, transit oriented.

This is exactly the kind of work that we need.

So I want to express my gratitude to everybody who has worked on this, and I'm not gonna start with the uh acronyms.

You all know who you are because I know I will leave somebody out.

The one thing about Treasure Island is that it has been 30 years of work and a lot of moving parts and a lot of agencies, but I will say um I will single out a thank you to the California Department of Housing and Community Development for this important grant, and thank you for that for everybody who's participating in it.

Thanks.

Uh thank you, Vice Chair Dorsey.

And with that, um City Administrator's Office.

Uh good morning, Chair Chan, Vice Chair Dorsey, thank you for your kind words and supervisor Sauter.

My name is Jamie Kruben.

I am the acting Director for the Treasury Island Development Authority, or TIDA.

I'm here to present this resolution on behalf of TIDA as well as the Office of the City Administrator.

The item before you is to authorize TIDA to execute a standard agreement with the California Department of Housing and Community Development, or HCD, under the Affordable Housing and Sustainable Communities Program, or ASIC, for a total award of forty five million one hundred and nine thousand and one hundred and forty dollars.

The award itself is made up of two components.

The first is dispersed as a loan in the amount of 30 million dollars to fund improvements that will support the development of 150 apartment units, including 58 new affordable units, 30 transition units, and 61 replacement units, plan for the parcel IC 4.3 on Treasure Island.

The second component includes a grant of $15,109,140 to support housing related infrastructure, electric ferry operations, 10 new bus shelters, over 1.5 combined miles of walkways and bikeways, as well as program costs.

The resolution before you also authorizes TIDA to accept and expend this grant portion of the total award.

As I'm sure many of you are familiar with this program, as a reminder, the Affordable Housing Sustainable Communities or ASIC grant program is developed and administered by the state of California's Strategic Growth Council and Department of Housing and Community Development.

The ASIC program targets implementation of transportation, housing, and infrastructure.

It provides grants and loans of up to 50 million dollars for disadvantaged for development projects that achieve greenhouse gas reductions and benefit disadvantaged communities, connecting locations to employment centers and key destinations via low carbon modes of transportation.

TIDA applied jointly for this grant with IC 4.3 Family Housing LP, who will receive the $30 million loan portion of the award and lead development of this project.

Slide four shows the location of the parcel IC 4.3 on Treasure Island.

And again, this grant will support the development of 150 permanently affordable family apartment units, 58 which will be affordable, 30, which will be transition, and 61 replacement units for residents and housing programs that were present on Treasure Island prior to 2011.

This site is planned to be developed by John Stewart Company in partnership with Catholic Charities, who will operate a child care facility on the ground floor.

In terms of timeline, the funding application notice was issued by HCD in March of 2025.

TIDA jointly filed the application with IC 4.3 Family Housing LP, which was approved by the Board of Supervisors in April May of 2025.

On December 10th, HCD issued a conditional award letter, which triggered the process of TIDA board approval, which occurred on January 14, 2026, which leads to our final step today as we respectfully ask this committee for your consideration and approval of this resolution.

The construction of the IC 4.3 project on Treasure Island is anticipated to begin in Q2 2027.

With permission of the chair, we have submitted some non-substantive amendments to the file, which were distributed today.

These non-substantive amendments were directly provided by HCD state grant staff and are required to be made to this approving resolution.

I'd be happy to read these amendments into the file if you prefer.

Great.

So on page one, line five, adding S to standard agreements.

Also on page one, lines 10 through 13, adding the phrasing approving the standard agreements and removing the phrase of the standard agreements and adding the phrase acknowledging the expenditure deadlines are set forth in the standard agreements.

On page three, line one, removing the word has after TIDA board of directors on line five, changing the word fines to found.

On page four, lines nine and ten, removing the phrase that the city and county of San Francisco acting by and through and the reference to the city.

Also on page four, lines 21 through 22, adding the word the and removing the word funds after ASIC program.

On line five, lines one through four, including the phrasing ASIC program loan award, uh, across lines one and two as well as line four.

Uh on lines nine through eleven, adding the whereas clause uh reading whereas the ASIC program loan award and ASIC program grant award expressly identified above will hereinafter jointly be referred to as quote ASIC program award on lines 20 to 21, uh shifting uh the reference to city to the authority uh and adding the award word award instead of funds, lines 24 through 25, adding the reference one or more STD 2213, and removing the phrasing the ASIC program funds are to be used for allowable capital asset project expenditures identified in the application package and program guidelines on line six uh sorry page six lines 10 through 12, adding in the phrasing one or more STD 213, standard agreements for a sum not to exceed the full amount of the ASIC program award and execute and uh line 13 adding the award award and lastly on page seven uh changing the reference to Robert Beck Treasure Island Director who has retired as of the end of January to myself Jamie Kruben as Acting Treasure Island Director.

And those are all the amendments to read to the file.

Uh, happy to answer any questions you may have related to this grant or the project.

Thank you.

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

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

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

Thank you.

Seeing no public comments, public comment is now closed.

Thank you, Chair Chan.

I would move to adopt the amendments that the tide acting director read into the record and then forward this resolution as amended to the full board of supervisors with our positive recommendations, and I should add how much I appreciate your presentation.

Thanks so much.

Thank you.

And with that, a roll call, please.

And on that motion by Vice Chair Dorsey to amend this resolution to accept the amendments as so offered by TITA and to refer the resolution to the full board with a recommendation as amended.

Vice Chair Dorsey.

Aye, Dorsey, aye.

Member Sauter.

Sauter, aye.

Chair Chan.

Aye.

Chan, aye.

We have three ayes.

The motion passes.

Yes, item numbers five and six are resolutions approving contract amendments with the following and sitting and county.

Volume three, the municipal transportation agency for the management of off-street parking facilities under the jurisdiction of the port, both effective on March 1st, 2026, with no changes to the term of February 1st, 2023 through January 31st, 2032.

Item number five approves the third contract amendment with IMCO parking LLC for the management of two off-street parking facilities located at Pier 30 and 32 or through 32 and Pier 70 for an increased amount not to exceed 12 million for a total contract amount not to exceed 219 million.

And item number six approves the second contract amendment with uh LAZ parking California LLC for the management of two all-street parking facilities located at triangle lot in seawall 321 for an increased amount not to exceed nine million for a total contract amount not to exceed 189 million.

Madam Chair.

Thank you.

And today we have SFMTA here.

Morning, Chair Chan, Vice Chair Dorsey, Supervisor Sauter, Robert Icardi off-street parking for the Park and Accur Management Team.

We're here today to amend our park and operator contracts to add two locations to each for first and foremost 21 2021 64-1 for Group A, Laz Park in California LLC, and a third amendment to contract two twenty or twenty twenty-one sixty-four-two or group B MCO Park and LLC.

Contract history, we had RFP in 2022, which the two contracts were awarded as of February 1st, 2023 for both contracts A and B.

Both awarded contracts were five year with two two-year options.

And the both contracts have an allowance for us to add or to subtract up to three locations throughout the life of the contract.

Currently, for group B, we have already added music concourse in December of 2024.

So that's already the first one we've added to it.

The proposed amendments I mentioned providing two new locations that will increase contract A or 2021-64-1 by 9 million, not to exceed 189 for the life of the contract, and for contract 2021-64-2, and manning two locations to the MCO parking one and maximizing the total value by 12 million and not to exceed 219 million dollars.

A little history, we have an ongoing partnership with the court with the SF port and our on-street division, which manages all their embarkados parking on street as well as enforcement.

And back in 2022, SF Port reached out to our off-street team to look into a potential partnership expanding parking across onto their on-street, or sorry, off-street meters lots.

And at this time, SF Port, after much review with our team and their staff, is to add four locations, CWall lot 301, aka the triangle lot, C Wall lot 321 to the group A contract, and Pier 3032 and Pier 70 to group B contract.

And the remaining off-street locations, as you see in the picture, would be managed by our meter lot portfolio, similar to the rest of the meters throughout the city.

Overall benefits for this partnership is as SF Port currently does not have any control over their lots.

It's currently through a lease through other vendors, and with our model, they'll be able to have direct control on maintenance oversight or an overall functionalities.

We at the SFMTA have our off-street expertise department with our team throughout the last 10 years of my tenure, and it would be better for us to do run from them instead of in-house.

Also, potential increase in enforcement revenue, which the port does not receive for any other off-street locations.

The SF Port Authority approved it back in November on their board, and our MTA board approved it in December earlier last or at the end of last year.

And with that, I can wait for any questions.

Thank you.

Items five and six are two resolutions that uh amend MTA's contracts uh for parking lot and garage operators.

The LIZ contract is getting an increase of twelve million dollars, and the M the MCO contract is getting an increase of nine million dollars with no change to the terms on either contract.

Uh the purpose of the amendment is to add four uh port-owned parking lots uh to these contracts so that they can be managed by MTA.

We showed the fiscal impact on page 19 of our report.

Uh you can see that after the switch for of operators, the the port is still expecting to get about four million dollars a year in revenue uh from these four lots collectively.

That's comparable to what they're getting now from the information we got from the port, and that over the next six years, the remote remaining term of the contracts uh the the lots will generate about 23.8 million dollars in revenue uh for the port for the harbor fund, so it's not our general fund revenue.

And the purpose of the changes is really to um have more direct control over our parking lot operations under the contracts.

MTA can approve the operating budget of each lot each year, and so it provides the city additional um, like I said, control over the operations at those sites.

So we do recommend approval of item six and five.

Thank you.

So, visor souter.

Thank you, Chair.

Um, I had a question about the triangle lot specifically.

Um, as I'm sure you know, there's a lot of ideas circulating in the fisherman's wharf community about the broader area and then about that lot in particular.

Um I just want to understand, you know, with this.

I think you're saying we we have more control.

Um, I mean, does that does that amount to more flexibility?

You know, if there if if the lease were to be ended early or or if there was um, you know, other plans that went forward to use that space for use other than parking.

How does that how do these changes impact that?

And then what is the contract term of this that we're looking at?

Yeah, so I to defer about future things for overall for parking with the way that the MTA would oversee, we'd have direct control with the port about if there's certain events or certain things going on, whereas right now it's a lease.

But to your question regarding sort of expansive use or the plan, the future for that lot.

I think I would defer to my partners at the SEP port to answer that question.

Thanks.

Good morning, Chair Chan, Supervisor Soder, Supervisor Dorsey.

My name is Kimberly Beale.

I'm the assistant deputy director for real estate with the port.

And in response to your question, this will allow us more flexibility as it was mentioned currently what we have are expired leases which you know have term that we are required to then go through certain steps if we were to terminate and with the partnership that we have with MTA or would have with MTA through this again it would allow us more flexibility than to uh as you're aware with some of the things that are proposed for that lot again allow us flexibility to then um either reduce the size of the lot to accommodate some of those uses or when we get to the larger project then actually then being able to terminate.

Okay very good that's helpful thank you you're welcome thank you um just kind of curious um this sort of uh contract between um I I think I have through the BLA just kind of help us understand the ports approach along with SFMTA in partnership you're managing um the entire I believe eleven lots um and out of which according to the BLA report seven of them are going to have pay station uh and then the four is really the the two contract under the two contract that we're evaluating right now help us understand sort of the ratio or um strategy of staffing because staffing was part of also what you have in presentation so just like how does the port manage it better with SFMTA and then now with the contractors and just kind of help us understand a little bit more about the approach both on from the port and SFMTA.

Sure so the way the current contract works with the these lots in particular their lease their revenue split lease 6633 split where essentially the port has only collects the revenue and the operators get to do as they see fit.

Essentially staffing maintenance or whatnot is on their basic on their agenda if not and it's up to the the port cannot direct directly if it's more staffing less staffing is whatever the end needs because the expense on the MTA model since it's a management count for the four locations specifically to the contract we continue with the port and manage with the operators unfortunately we were not allowed to speak to the current operators of how they ran it so our projections at the moment is based off what we saw based from afar and as we dive in we understand a little bit more but we have the ups and flows of high season low season and with that actually to also correct with excuse me all 11 locations will be seam in McKay meters so the current 11 set the current four under the operator contract will be metered still with enforcement but will be still overseen staff wise by our operators and same with any maintenance requirements or whatnot with the approval as support for any expenditures.

I think that it's a long overdue conversation eventually we will come back to it and particularly this May when SFMTA returns for the enterprise agency budget process um and I think that we're gonna have a bigger conversation actually around SFMT approach to revenue generation and revenue approach uh to parking garages all across the city and this is not about the port clearly um but just for SFMTA's notes uh just something to think about um that when you return love to have a uh a more in-depth conversation about the group A and group B that you have broken into according to the budget and legislative analysis report and just help us a little bit on I'm just gonna throw it out there for example the fifth emission parking garage what we know previously generated an annually of 25 million dollars prefor the pandemic but then during the since the pandemic it's been dropping to you know five million dollars of tax revenue per year and just wanted to understand better about the approach and along with these contractors I I know that they it's really within these two.

Which one is which I can't quite remember all, but I I look forward to that conversation.

As do I.

Thank you.

And so with that, let's go to public comment on this item.

Yes, we're opening public comment for both these item numbers five and six.

If we have any members of the public we should address this committee.

So thank you.

Thank you much, Mark Gleason.

Seeing no other speakers, Madam Chair, that completes our queue.

Seeing no more public commons, public comment is now close.

Um colleagues, I would like to send these two item to four board with recommendation and uh roll call, please.

And on that motion to refer both resolutions to the full board, with a recommendation.

Hi.

Dorsey I, Member Soder.

Soder, I chair Chan.

I.

Chan, I, we have three ayes.

The motion passes.

Mr.

Clerk, please call item number seven.

So item number seven is an ordinance appropriating four million from the General City Reserve to the Department of Emergency Management for Expanded Street Conditions staffing, and 150,000 from the General City Reserve to the Human Rights Commission for Community Initiatives and Fiscal Year 2025 to 2026.

Madam Chair.

Thank you.

And Miss Sophia Kittler.

Good morning, Chair Chan, members of the committee.

Thank you so much for having me today, Sophia Kittler from the mayor's budget office.

I will have a brief presentation.

The item before you is a 4.15 million dollar supplemental from the general fund reserve that is uh meant to establish an operational posture, basically from October through March, as kind of like a not quite a pilot program, but kind of a short-term sprint on understanding what resources are necessary to maintain um increased levels of staffing for uh response to night markets and special events um downtown.

We found uh we kind of back in I'm gonna go on the storytelling venture here.

Um starting back in October, we kind of looked at the calendar and realized that while we had we believed we had budgeted enough within our individual departments to do normal staffing levels and and it had considered special events.

We were looking at how many special events were coming forward and the amount of national attention that we were getting as a city and really wanted to make sure that we had um all of the resources we needed to focus on the things that were getting us bad press for lack of a better term, but we're kind of really bringing national attention to San Francisco and in a time when we really needed the um the city to shine at its best.

Um, in particular, I think the national attention on our local drug markets in um supervisor by two of your districts, actually, um, was something that I think we really wanted to spend a lot of focus on.

But what we kept hearing from our departments is that if we pull, if we ask them to really focus on those areas, they would pull from our neighborhood commercial corridors.

And that's that is I think what we really were trying to avoid.

So what we said is for drug market response and special event response.

We wanted to say, like, all right, we are giving you a little bit more leeway in your budgets to flex up staffing when um when necessary for an event.

Uh this is thinking about in particular drug markets.

We were thinking about the swing shift.

We had found that the police department had done a really spectacular job of of holding night markets until the end of a shift, and then as the shift turned over at the police department, we'd kind of have like a bunch of chaos come back.

Um, and so we were asking like, all right, what can we do on overtime on a short-term basis to kind of flex that couple of hours and then bring DPW in, for example, a little bit earlier than their normal shift would be also perhaps on overtime or an increased staffing.

Um to kind of like hold that zone uh in kind of those critical hours.

And so that's how we started thinking about the operational changes on drug market response, um, and then replicating that um in certain key areas as we looked at the special events calendar.

Um, October through March.

Um I think I have a calendar uh dates here, um, kind of marks like when we started getting an increased amount of national attention on these issues through holiday safe shopping, JP Morgan Healthcare Conference, the Super Bowl and Lunar New Year parade.

Kind of looking at these things where we expect a huge number of people, we express a large we expect a large influx of national attention.

And we really wanted to make sure that we had both our community corridors getting the baseline resources that they have come to expect and they deserve, and not sacrificing that in order to make sure that we kind of had our increased staffing.

The way the mechanics of this are working, and I will get to the 150,000 for the agency for human rights shortly, is we put it in general fund reserve, and instead of giving it directly to departments, just kind of as a general bunch of money for their operations, we put it in the DMAC project fund, not because we expect the Department of Emergency Management to actually administer or spend these funds, but because DMAC is the organizational body that determines those staffing levels and what is necessary for those flexes.

And so we said, all right, if we kind of have an agreed upon policy body that says this is the level we are needing, then as they charge against that, as they charge against that project, we can validate whether or not that was in fact the operational um priority of that weekend and then kind of let it off of mayor's reserve as that passes.

Um so that way it does not become just kind of like an extra bucket of funding for any individual departments.

Um along with that is a 150,000 dollar um addition to backfill of state grants that we lost at the Department of Status of Women.

Um it's one that we I think we will continue to evaluate in the budget, but uh particularly given the nature of large events like Super Bowl, um, we were really concerned about an uptick in human trafficking.

We saw that at Super Bowl 50.

We there was a huge uptick in human trafficking and sex work in San Francisco, and we really wanted to make sure that we weren't losing that critical community work, um, right as we had kind of like this influx of of visitors from out of town and kind of this again, this attention.

Um so that we didn't think we needed to put to DMAC, we just put that directly to HRC so that they could operationalize that quickly.

Um so again, we think that the idea was to fund a sustained operational posture to look at actuals of being what was being spent and kind of compare that to the DMAC operational plan rather than just kind of giving it directly to departments.

Um that does kind of like slow down the urgency of the timing, but it is kind of like a current year need in order to allow people the flexibility within their budgets to go meet the staffing requirement that we were asking of them.

Um, and then as I mentioned, it the the other goal is to preserve baseline resources across the city.

Um I'm happy to answer any questions.

Thank you.

Okay, item seven is a supplemental appropriation ordinance that draws from the general reserve.

It provides four million dollars to the Department of Emergency Management and 150,000 to the Human Rights Commission.

Uh, the $4 million will have stated go to DEM to help the mayor's office validate expenditures that have been incurred by the public works department related to a legal vending and uh street cleaning around uh drug markets late at night from October 2025 through March 2026, and then extra uh overtime that the police department has incurred kind of in that same time frame around those same activities.

Uh, the the HRC money is to extend uh grants, two grants uh that ended in December 2025 that provide about 10 people each uh with uh about a thousand dollars a month uh as a kind of basic income.

Uh and the grants are geared towards people who are survivors of domestic violence or human trafficking.

Uh the so when you draw from the General Reserve, you have to put that money back into the budget next year.

So any money spent now from the General Reserve essentially becomes another reduction in the general fund budget next year.

The balance of the General Reserve this year is about a hundred and sixty million dollars.

Uh so that's the fiscal impact of this legislation.

We note two policy considerations.

One is that the kind of the definition of whether this program or intervention is succeeding, I think it is still under development.

I think it would be helpful for the board of supervisors to request a report back from any department drawn on the supplemental funding about the effectiveness of these interventions late at night.

And we have recommendations about performance metrics to track in the report, but I think that would be beneficial for all.

And then the other consideration is rather than drawing on the budget reserves, you know, the departments could just do less for the remaining fiscal year, um, do less services in other neighborhoods for the remaining remainder of the fiscal year to avoid drawn on the general reserve.

That would be a more fiscally prudent option, in my opinion.

But for this reason, we consider approval to be a policy matter for the board.

Thank you.

Thank you.

Thank you, Chair Chan.

So I am generally supportive.

I mean, actually more than that.

I'm enthusiastic about these kinds of um initiatives, and I think they're widely supported in my district.

With that said, I always have mixed feelings about overtime.

I know enough about law enforcement to know that even if we had a fully staffed police department and fully staffed sheriff's department, overtime is a reality because we just don't know if the warriors are gonna win the title or you know that there are things that happen running a major city um good and bad that we have to make adjustments.

It's I think I think what gives me pause whenever it's an overtime question is I don't feel good, while I may feel good about the initiative, I don't feel good about asking taxpayers to spend more money on less policing because we're dipping this far into our overtime.

I guess my question is as we are making progress toward a fully staffed police department, can we expect that the overtime ask is gonna be smaller in years out?

That is such a good question, supervisor.

Um, you only asked one question, but I'm gonna answer two.

So on your question of can we expect overtime to go down?

Um, I think that this is something that the new chief has is taking seriously, and and I believe that the interim chief was also focused on it and um AC Lazar kind of had a strong hold on.

I think there is a certain amount of, and this is to the BLA's point, where are we asking the police to be?

Some of it is is operational, you know.

I think we we want to trust the departments to determine the correct level of staffing to keep the public safe, right?

And that that is what we choose a chief to do, and that is why we trust that organizational structure.

And then I think the question is how do we on those staffing questions of of like the BLA report last year, right?

When we're thinking about um how people draw on their sick time, when they draw on overtime, when they draw on 10B, and kind of what the controls there are.

Um I think that is something that we that we need to continue to make progress towards.

And I believe until we make significant progress on those controls, and um have a central thought about where we want our police to be and not have as many special events that require large scale re-staffing, um, you know, I don't think it'll come down, right?

I think and this is one thing that we've been seeing a lot of is there have been a lot of large events this year, and that does require additional staffing.

And the question is at what level, right?

And and at what level and with which police officers using which time?

And so I think I think it would be correct for us to expect it and to hold a department accountable for it, and then I guess the question is on what timeline is it realistic?

Um, and that is I think what we're trying to figure out.

On the question you did not ask, but I will answer anyway, um, is that is I think it is those exact considerations that led us to put this in the DMAC budget, right?

And I think what we really we really did want to say we do understand that you cannot be three places at once.

We do not want this to be um yet another ambassador contract, right?

We think that this is work that should be done and that needs to be done by city employees, um, both on the DPH, like on the DPW side, on the police side, potentially on DPH side, if that's the intervention that we determine is necessary, and we wanted to have some of that flexibility, but we also wanted that accountability of what specifically was this overtime for.

Does it line up with this DMAC operation?

And where else might might they have been drawing from otherwise, so that it is not just here's another four million dollars for your overtime to be wherever it is that you need to be, right?

This is something that we really wanted a level of control and accountability over, but it was a policy priority for us during this period.

Does that approach an answer to your question, Supervisor?

I think so.

I guess uh what I what I would like one of the things that I have prioritized in my first term was getting the police department closer to full staffing.

Yes, um, and I think I actually it was the I think Norman Yee and the pre-board before me did a lot of great work that should have been done probably 30 years ago to do to have a methodology for how we developed how many police police officers should we have.

Many of these issues that we're grappling with, these are good problems to have.

We've got a Super Bowl and JP Morgan and the thing th great events and more people are coming to our lunar new year parade.

That's that's all great.

I like I like that we're policing that.

It does feel to me that we that there is an inherent inefficiency when we just don't have, I think we're still just a just a little bit above 75% staffing based on the recommended staffing level.

It would make me feel good to know that while this is not an efficient use of taxpayer dollars now, we're getting to a better place where we're ultimately I would like to think that we're not going to have these overtime asks that are this big when we have a fully staffed police department.

That's I share your aspirations, sir.

Okay.

Do I have cause for optimism?

In my lifetime.

It will take well, it depends.

It's a good caveat.

I did speak to the police department about this very question.

Their most recent academy was quite was high.

It was like over fifty-five people, and their actual uh full duty staffing has increased this quarter, um, which is the first time that's happened in the past couple years.

So I think that the trend right now is good, and as that staffing goes up, the overtime should go down.

And I agree that, you know, as we stated in our audit, there are many areas of control that could be applied and implemented in the police department to bring down that overtime in the interim.

Okay.

Great.

Thanks.

Thank you, Vice Chair Dorsey.

We want you to live long and prosper.

It's like a Chinese New Year's thing in me.

I'm like, live long.

Um, but I I think we will have this conversation.

We understand that you know you're going through your budget process right now, which we appreciate.

We'll go into the next conversation, uh, which is really your budget instruction.

Um I'm eager to hear that.

I there was a part of me that we had these conversations already.

You know, what is the reimbursement rates actually, um, and and or an MOU agreement that looks like with the host committee, like for the Super Bowl.

Um, can you elaborate just a little bit on that?

Um I can, although I am not authorized to speak about it, so I will speak in the terms that I know to be true rather than any details that I think might be true.

Um, the city has been in talks about an MOU with the Super Bowl host committee, and we do expect um an additional infusion of money to help pay for the expenses.

And so, like what is so, I mean, clearly it will be retroactive.

Yes.

Um, and you know, it's it's been a while uh since we've been planning this.

Um I think what I do look forward to having is written record of the status of that uh to be included in this overtime spending.

And I I think let me also just put it this way: it's not just with the Super Bowl, but any of these events that you're listed to say as an example of why, like, is it with the San Francisco Chamber of Commerce for the holiday shopping, or is it with um JP Morgan Chase?

Is it the lunar new year?

Like, which is there's a whole list of sponsor.

Like, like what do those kind of contribution actually look like?

Uh what those conversations been look like, and how sort of the staffing spread across among them look like.

Do we actually end up spending more time and more staffing for Super Bowl than and lunar new year parade than we would for the holiday shopper, which I assume so?

So it's sort of even out, and what that will look like.

I think that I am looking forward to see a bit more analysis, if possible.

I am not stopping this uh supplemental today, but I think that it will be retroactively like if we have some sort of one-pager indicating the approach, indicating sort of like the the staffing, but potential reimbursements agreement that we could lend.

Um I would appreciate it before next week, Tuesday, March 3rd.

I will work on what I can.

Thank you.

Um, and then we will go into the next two items and then help us have a bigger picture about um budget overall.

You do, or you had, I believe, introduced another supplemental for overtime staffing.

But that one is specifically for SFPD, which I believe we budgeted roughly about 30 or 31 million dollars last year for the entire fiscal year, and I believe what you have introduced is roughly about 34 million dollars, so it's a little bit and but that is a trade that is uh revenue neutral.

So that is not a draw on the general fund that is shifting dollars from within salaries, yes.

Yeah, um, so which is good uh for SFPD.

We I think you and I have some we were both skeptical, but we want to be a cautiously optimistic.

And so I that we can so at first I was thinking gonna combine the two comments this this one and that together, but I think that it is best that we do not.

Um but I I think that I do expect similar to what Vice Chair Dorsey has indicated.

I think what we're gonna expect for the budget that's upcoming is then how do we be included?

This should be the norm, and it's not a um, it's it shouldn't be coming back for supplemental.

But I I do understand you're in a tough position because everything it's not norm right now.

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

Thank you.

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

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 refer to the full board with recommendation, Vice Chair Dorsey.

Dorsey, aye, member Soder Soder, aye, Chair Chan.

I.

Chan, I we have three ayes.

The motion passes.

Yes, item number eight is a hearing on the mayor's budget instructions for fiscal years 2026 through 2027 and 2027 to 2028.

And item number nine is our hearing on the city and county's joint report and the five-year financial plan update for fiscal years 2026 to 2027 through 2029 through 2030.

Madam Chair.

Thank you.

Would it be problematic if we were to also call item 10?

Um, which is really the controller's six months budget report.

Um, I'm just trying to understand.

Uh, it's, I mean, this is the mayor's budget instruction, and then it's a joint report for our five-year, and then it's a controller's report for the six months.

It's all actually inclusive about like really budget projection.

So uh I don't see anybody objecting to it.

Please also call item number 10.

Yes, item number 10 is a hearing to discuss the controller's six month budget status report for fiscal year 2025 to 2026.

Madam Chair, thank you, Mr.

Clerk.

And so with that, we start off with again our mayor's budget directors, Miss Sofia Kittler.

Thank you, Chair Chan, members of the committee.

I'm somewhat pleased to present uh our joint report update followed by how our our budget instructions and how we responded to those.

Um a high-level summary.

Our fiscal outlook is um not so good.

Uh the rate of expenditure growth in our city far outpaces our general fund revenues.

We have a two-year 936, as of the joint report issuance in December, we had a two-year $936 million two-year deficit, which is approximately $300 million in year one, growing to $640 in year two.

Specifically, our expenditure growth projections, which we will get into the details of later, grow by approximately $1.8 billion over the next four years by 2030, while revenue growth is expected to increase by only $617 million.

And in short, the mayor's direction to departments was that we need to cut an approximately $400 million of annualized spending through restructured service delivery and targeted program elimination.

I will start with the fiscal outlook and kind of a debrief of the five-year financial plan update.

So this is a visualization of the deficit effectively and our revenues and growth.

So as you have heard me talk about in this chambers before, the mayor has a large focus and kind of my mandate from his first day in office has been to think about how to reduce the structural deficit.

And last year, in a series of very challenging budget choices, we were successful in reducing around $300 million out of the then one-ish billion dollar structural deficits.

And so that is as you see the projection of the cost line, that is the red is our projected cost growth over the next four years.

A quick moment on this.

When we project costs, we are effectively saying like if you take the city as it is operating currently and make no policy choices other than what has already been made, it is a status quo projection, right?

And so it assumes the current level of staffing with the known level of increases.

Um it does not assume any kind of like major policy shifts in the five-year prudential report.

And then we look at the controller's office does their revenue projections, which they update periodically.

Um, and then the exercise of the budget is to close the gap, but is to make those policy choices that would bring spending in line with revenues.

On this graph, the dotted black line is where the projection would have been at the end of last year were it not for HR one.

And then the blue line is our revenue expected revenue loss, mostly at DPH, but also including some at HSA, which are a result of the federal bill that changed, that is largely driven by Medi-Cal changes.

Um we will get into that in more detail.

So as you can see, we start with kind of a smaller deficit that is that is it is much smaller in year on and would have been even smaller were it not for HR one and that grows.

Our cost projections continue to grow.

Um our revenue loss from HR1 kind of stabilizes, and our revenue similarly like continues to grow, but at a very um slow pace.

Uh the major assumptions in the five-year forecast are that we do expect strong business tax growth, but it is it is modest on a local basis.

And I believe that um I don't remember your title, but Ms.

Lerzma will kind of elucidate this and kind of how those revenue projections come through.

But basically, we we capture a percentage of global business um activity in our gross receipts tax, and because there is a lot of global business activity, we've had really strong gross receipts growth at that level.

But when we look at local hotel taxes, sales taxes, um, kind of like local payroll taxes, such as they continue to exist, the local share of what we are generating here is is not growing.

And so what we see is kind of like a weird tax income structure for us.

Um, we also assume uh we are not pointedly assuming a recession at this point, right?

We do assume that that taxes continue to grow, that businesses continue to grow, and that we will continue to be in a growth environment, however slow.

Um revenue loss, we are assuming $300 million dollars in the in the $936 million dollars deficit.

Um 300 of that comes from HR1.

Uh, and that basically it's it's around 80-ish in year one of the budget, growing to two something in year two.

We'll get to those details in a moment, but that again kind of stabilizes in the 200, 220 annual revenue loss assumptions.

Um we assume CPI growth on all open contracts um starting from July 1st onward, um, and then assume the cost of the contracts as negotiated.

Uh we assume a 7.2% rate of return on pension investments and a 9% health rate cost growth.

Um, so salary and benefits is one of our largest cost drivers.

Um in general, we assume that we will begin fully funding the ICT plan by fiscal year 28.

Uh, and then we took the first year of the budget as passed by the Board of Supervisors last year, and then add 30 million dollars in annual growth to the capital plan.

So that is, I want to be clear, not fully funding the capital plan in this.

And then we do um per the legislation that the board of supervisors passed, I think three years ago, on any on out years, specifically in starting in fiscal 28 and forward, we assume a 3% increase in the cost of doing business for grants and contracts.

Um, and then we assume that we will uh not hit any baseline triggers.

We do assume that we will be paying out all of our baseline growth in all in each year of the budget and of the forecast.

Um this is a mathematical representation of what we've just been talking about.

Um, but it teases out as you can see the growth in reserves, reserves grows by as much as 275 million dollars by the end of the projection, salary and benefits is expected to grow by as much as 829 million dollars by the end of the projection, operating costs by 300 million, departmental costs by 380 million, um, and state impact costs by around 220.

Um we wanted to show kind of like the structural city operations up top, and then we added in the state and federal policy impacts line so we can tease out the impacts of HR one in the deficit.

Um specifically on HR1.

So uh HR1 is is very bad for our residents and for our city budget.

Um we estimated that between 25 and 50,000 San Franciscans would lose Medi-Cal or CalFresh coverage.

Um that could be as high as 400 million dollars revenue loss annually by 2030.

Um, and so we took what we consider kind of like a middle-of-the-road estimate on um HR1.

The the largest driver in revenue loss in HR1 comes from eligibility loss for Medi-Cal.

Um, and there are kind of three different ways we were thinking about that.

The first is that there is an expanded work requirement.

There had previously been a number of waivers or kind of uh exceptions to the work requirement in Medi-Cal, and a number of those were removed in HR one.

We expect that that could um affect as many as 35,000 individuals.

Uh, there was what they call unsatisfactory immigration status.

Um, if you lose eligibility or if you were not ever, you have never qualified for Medi-Cal as a UIS individual, you are no longer eligible to start being on Medi-Cal.

And so we expect that is like another 7 or 8,000.

And then the third big driver here is um six-month redeterminations.

We have historically um resubmitted your Medi-Cal eligibility once a year, and so we kind of have a large number of case managers that um do the good work of making sure that everybody submits their paperwork to stay eligible.

Um, this increases that process to every six months, and so we assume that certain number of people will just fall off with the friction, and that doesn't mean unless they are UIS that they can't come back on, but for that period of time, we would not be able to submit their billing for reimbursement.

Um not listed here, but for the record and for those who haven't spent time on this.

Um this is not it is I I really want us to think of this as a revenue loss, not as a new cost, if you will.

Um, typically, these are health programs or food programs that we are running regardless, and then we provide the service, and then we have historically turned around and billed the federal government or the state for these services.

Um, in assuming all of these lost revenues in the deficit, we are saying we are we are assuming that this coverage continues, that people continue to get their health care coverage, that we continue to give them this food, that they continue to kind of get the benefits that come with Medi-Cal and CalFresh, but that we can no longer bill the state or the federal government for it.

And so it is the policy choice here, and this is gets to the my thing about the status quo, is that we continue having the same level of service that we always had, but we no longer get the the reimbursement for that money.

Um a couple other things.

Um we also we assume a 26 million dollar loss in the administrative cost share.

Um the federal government had said that they would outright not pay for their cost share anymore.

Um there is a an estimated 52 million dollar administrative cost, so we are assuming we lose around half of it.

Um and that may be picked up in the state in the governor's revise.

Um so that's one of the things that we are closely watching.

And then not included in the deficits, but a mitigating factor that could take on some of this is um is uh if the human services agency were to increase their eligibility workers, they would be able to keep more people on their benefits.

Some of that six-month friction would potentially fall off.

They would be able to help get more people work and kind of keep more people on benefits.

So we have some kind of proactive um initiatives to try and keep as many people on their medical coverage as possible.

Any questions on HR1?

Yeah, I mean, I think that I'm just kind of curious how you were framing it.

You said something interesting.

I'm just trying to understand.

Yep, I I don't see it the difference, but how me understand what you said about you don't see it as a cost, but then that it but it's just simply a revenue loss, and that there's a policy decision.

And my assumption is what you're trying to tell us is that the policy decision is it means that the city has to decide are we maintain the same level service, which then the city will then make up for that revenue loss, but and by maintaining that revenue loss from the federal government and by maintaining the same level of service, or if because the loss of the federal revenue, therefore the city now will and it's not receiving that reimbursement, therefore we'll then reduce the service.

Yes, and I think I will not pretend to understand the legalities of it, and so I will frame it as a policy choice.

I I would say that private health care would have the option to change that policy, right?

They would be able to say we are no longer accepting any, we are not providing care to anyone who does not meet medical eligibility.

I do not believe the city will make that choice, and I am not sure, and I would not put the city attorney on the spot, but I'm not sure that we would be able to do that.

I think that we are we have kind of like an emergency system, and and the less we are providing preventative care, we have a you know, like a tier of I can't remember the title of the trauma center, but like our emergency room kind of tends to be the receptacle for people who do not have proactive health care.

And so we will be paying for it in, you know, out of this pocket or out of this pocket.

And I think the policy choices do we kind of like take our take the risk of of saying we are no longer going to um fund our community clinics, for example, where we see that people kind of go to pro get proactive care, or are we going to wait for everyone to show up in the emergency room where it is more expensive?

Yeah, I mean, I think that is essentially, I mean, that is also why we had the BLINCEN hearing two years ago or a year ago, and to basically is with the recognition of potentially a medic medical cut or Medicaid cut um overall, and that is a policy decision Department of Public Health already said.

We're not if we're not receiving any more if we're getting re reimbursement reduction, the city is not going to put more general funds for these types of services.

So we have a balance and hearing.

Um we could, but then that will be a subsequently we can make those decisions, but we we department department of health has to, it's mandated to do so.

I think similarly, I would say that like the approach for this budget should probably roughly be kind of the same.

Like I I would expect the administration sometime in May prior, like as or as you unveil the budget to us, is that like or or I I don't know at which point.

I'm not meant I'm not dictating the terms and conditions of which point you disclose that, but I am asking that potentially to disclose the fact that uh this we are making these are the policy options or decisions, and potentially we're making or deciding on because we no longer are receiving federal uh reimbursement for example, I don't know, mental health program.

Um, there are pilots that we're doing that you know, we don't know if it will get coverage, and and and therefore we're now using general fund to cover we could or could not receive reimbursement.

And we are decided that as a policy decision that we're making that investment or for security, we actually have funded for security beyond the terms um allowable by both the state and federal for reimbursements too.

Um, are we gonna continue with that?

Which is roughly about 17 million dollars uh a year for security programming.

So I I mean I think those are the conversation and policy choices that absolutely I think that's a great point.

The the one and that I would add to that, yeah, is that it's not that the the services themselves in most of in the cases of HR one are not eligible for Medicaid, it is the individuals, right?

And so the question for us is how do we keep make sure that this the services provided and we're like we're not turning away individuals, but we are trying to make sure that as many individuals stay on medical and become and are um eligible for reimbursement.

At the same time, the Department of Public Health has been looking across their um across their portfolio of services that they've been provided and trying to figure out what what is eligible for medical reimbursement that we haven't been billing, right?

Where could we pick up extra revenue that we've kind of been money left on the table?

And how do we think about making sure that we are getting every dollar out of Medi-Cal that we deserve?

Yeah, I mean, I think that's can you continuum of care absolutely both for housing and care and and treatment and health, like those that's like probably one of the biggest, yep, like you know, in terms of that conversation.

I sorry, I I I'm just highlighting the difficulty of your task.

I think which I think you already know, but I think the public should know.

I appreciate that like this is a moment where um this you may be casually um you know talking about slice seven.

You're not, you're not.

But like it's just that it it seems like this 400 million dollars of revenue loss or 300 potentially 300 million for another one.

These are these are significant um in terms of the budget deficits, and that is something that um I'm not gonna opine further, but it is for policymakers for everyone involved, should really look at the numbers and make sure the math actually maps when we begin to tweak local tax measures and to recognize that these are like the challenges that we face, and I don't think it's gonna go away anytime soon.

I wish we we like you it could problem solve within the one fiscal year.

I don't know it for sure by the federal government, and that local policymakers has the responsibility to say what locally we could do and need to do to make sure that whatever it is that we got.

I don't even know that the conversation around tax measures that like you know budget neutral is enough of a conversation for us to sustain for the next two to five fiscal years.

I'll leave it for that.

Sorry, my no, I I appreciate that chair.

Thank you.

The one thing I just want to underline on this because I'm not sure I spent enough time highlighting it, um, is that so these are we have all made assumptions about who falls off.

We do not know who will lose their coverage.

Um, and we have taken again a kind of a middle of the road assumption here.

More people could lose coverage, fewer people could lose coverage, right?

And so that what this number ends up shaking out looking like, we will have some understanding of in in kind of July and August, and then it'll be re-upped every six months thereafter.

Yeah, Vice Chair Dorsey.

Thank you, Chair Chan.

This really isn't a question, it's more just an observation on that one particularly vulnerable population, and one that we've really been prioritizing here in San Francisco is um for drug treatment.

Um in August, the New York Times did a really sobering editorial that America was finally turning a corner on opioids until now.

And there's a the estimate is because of HR one, 150,000 Americans are going to lose access to drug treatment.

This is I I would argue there's probably few things that we could spend money on that are better investments than helping people get on the other side of their addiction.

So it is it is scary.

Um I appreciate everything that uh that you're doing, and hopefully in 1,059 days, 21 hours and 40 minutes when the Trump administration is over, we'll be in a better place.

Um I mean, I think that we have put dollars on reserve, like you know, last fiscal year, um, that is including the you know um healthy SF, um, the sheet at dollars that we anticipated or projected.

Um what is the approach of the administration in tackling the deficits for this upcoming two fiscal years along with the dollars that were already put on reserve and then sheeted dollars we are in as is kind of like the mayor's budget development, we are um in the process of developing exactly the details of that strategy, but generally the way we have thought about the sheeted dollars and the reserve of kind of our our state and federal reserve is if we look at um the changes we need to make over time and when we think those changes might take effect.

So for example, I think of it as a smoothing mechanism, not as a total backstop, right?

I don't we do not have enough time or enough money to fully backfill all of HR one for the duration of at least the the current presidential administration, or you know, beyond that, should the the policies stay in place.

Um and so what we're thinking about is what are the tough choices we need to make, and then how do we smooth the effect of that over time so that it does not feel just like a massive four to six hundred million dollar hit in a single year?

Um and I think that's that's where reserves are can be useful for smoothing and kind of mitigating pain, but they do not outright we do not we could not have enough money to backfill all of this um forever.

Yeah, I agree just to breach the gap just to to get us to um to have to build out the runway exactly a bit more.

Thank you.

Please continue.

All right.

Um a few things that are not in our projections, just a few risks.

First, um the state a state budget shortfall.

There could be potential revenue loss if um cuts to things like XSERAF come through every year.

We have done kind of a dance with the governor's budget on which pass throughs they continue to give us, um, and so depending on what the state budget looks like, um, we could lose additional revenue there.

Um federal policies like um that are less related to HR one, but thinking about, for example, um their policies around grants and DEI.

Um, we still do get a number of grants from the federal government.

Much of the language that we have seen in the NOFOs are fundamentally changing policies from how um we have applied in the past, either because they say, you know, this the jurisdiction may have no DEI related programming, and then we have a legal question as to what what the jurisdiction is and what DEI programming is and how you track that.

Um, and so we've been tracking very closely the grants that we do and do not get.

Um, I do not have a full rundown of that right now, but I know that some we have just outright lost, and some we continue to get, and it has not been uniform across the board, and it is very difficult for us to predict kind of where which individual department will fall on any particular policy.

Um and then assessment appeals, we continue to um see uh declining or flat property values um as people continue as appeals continue to grow on the assessments of people's individual properties, um, particularly in the residential.

So we do see revenue risk tied up in appeal outcomes.

So the mayor's budget instructions as issued in December were that we need to cut 400 million dollars of annualized spending.

Um, because of the shape of our deficit, we have said that what we're really trying to get to is is by year two, we need to have identified a full 400 million.

Um we will go as far as is appropriate and necessary in year one, but the idea is that by 400, we have really by year two, we have really identified that four or four hundred, but we may not have 400 in each year, just so you can anticipate what the shape of that might look like.

We asked, as you know, we've had a hiring slowdown throughout the year.

Um we have asked departments to reorganize their staffing levels to reflect current staffing.

So that is effectively deleting vacancies in the system and using existing personnel to deliver the services.

Um we want them to eliminate non-core programming.

We are thinking working collaboratively with departments to think about what the reason for existence of any particular department is, how they deliver those services more effectively, and then if they have other strategic programs that help them get towards those goals, but are not necessarily their core reason for existence.

We are evaluating those on an individual basis to kind of understand what we can't afford to do.

I want to be um, as I have said to departments, very clear to um to this committee that uh the elimination of a program is not an indictment of that program.

It is it is simply that we need to make tough choices, and and it is because it is either um not core to what the city needs to be delivering on, and so we are using this.

I we are trying to protect certain services rather than um proactively cut others, if you think about it that way.

Um we are looking at enforcing a span of control for management and supervisory positions, um, thinking about uh how many how how you have efficient decision making, how you make sure you have the right ratio of management for any particular initiative, and kind of giving guidance to departments on how they think about that restructuring that I mentioned in bullet number two.

Um we are exploring establishing a pooled shared services for IT, HR, contract administration, and um a few other financial functions.

Um again, this is where we are kind of looking at the total size, thinking about the implementation options and and trying to decide what what the right pace of that change is.

And this is again, supervisor where thinking about you know where those reserves are.

If there is a large savings opportunity, but it would create a lot of chaos.

This is where the reserves help us kind of smooth those decisions to maximize operations.

Um we are looking at non-personnel contract spending, kind of going line by line through all of our contracts, not just at an individual department level, but seeing where a contract is held across the entire city and where the opportunities for consolidating those or kind of renegotiating or making getting efficiencies on those are.

And then the last would be to revisit our one-time spend on capital, fleet, equipment, and technology spends.

Um, as you have heard the mayor say, uh we do not want to use one-time dollars on ongoing expenses, and so uh really cutting cutting one-time expenses um that kind of keep us from having cost growth in the later years is the last place I will hopefully go.

And that is all.

I'm happy to answer any questions.

Thank you.

Going to your next presentation.

Uh Michelle is the next one.

Oh, sorry.

Oh, so if I just director.

Um, thank you for the presentation.

Rewinding to some of the risks, the assessment appeals note.

I know that we're seeing historic levels of appeals.

Do we have any approximation of the financial risk of those in the coming years?

What that looks like.

I think the controller might be able to better answer that question.

We definitely have an estimate of it, and it's baked into our projections in a couple of ways.

Um, sorry, this is Michelle Aller Smith from the controller's office.

Um we have appeals that have already come to the assessment appeals board.

They've been filed.

Um we look at kind of what's on the AAB's docket once a quarter, kind of see what's the pattern of decisions and kind of what's the total like possible liability out there.

Um, so and we maintain a reserve um to pay refunds that we think will come due on the appeals that we are holding in our hands today.

Um, so that's several hundred million dollars that we are holding today, um, given the changes in assessed values, um, especially with commercial real estate.

In our forecast um, in years where um we don't yet have an appeal in hand.

We expect to get appeals because they're temporary.

Unless you're changing a base year value value, which is uncommon, every year that you that a building owner thinks that their property is overassessed, they have to reapply for it.

They have to appeal that value.

So we think that through our forecast, those property owners will continue to appeal their values, and we've made a model using some co-star data that says, okay, we think here's kind of like for all of our for all the properties in the city.

We think here's kind of what their Prop 13 value is and what their market value is.

If it market value is lower, they will appeal and we assume a payout on that.

So that's a long-winded way of saying our our future, our forecast forecasted property tax revenue is smaller because we assume we're gonna have to reserve for appeals.

If we didn't make that assumption, there will be more money in the budget.

So we are planning to have appeals be paid out.

That reserve is to the tune of a couple hundred million.

Yeah.

Thank you.

Okay, I have a very short deck here today.

Um, if I can make that look better.

Okay.

Um, so as the chair noted, um, we just heard from the budget director about um kind of our five-year forecast.

That forecast is for fiscal years 27 through 30.

Um, and what I'm bringing to you right now is a is a status report on the budget year that we're in right now, so fiscal year 26 through kind of the first half of the year.

Um, so some summary points.

Um, I'll start with the third one, which is really um there's a couple of key stories here.

A big one is a revenue story in the current year that's kind of building on what happened at the end of last year in our close, where we see how do we perform for the last fiscal year.

Um, so in the current year total, um we're projecting a revenue surplus of about 214 million dollars.

Some of that is news that was baked into the five-year plan, and some of that is news that we have in the quarter after that plan, um, and really where the strength is coming is in business taxes and real property transfer taxes, which we'll talk about, and um at the same time uh we budgeted 80 million dollars of COVID FEMA reimbursements for COVID costs, and we've just we've taken that out entirely.

Um, we still don't have final determinations from FEMA on some of our non-congregate shelter costs, and the longer that goes, the less likely reimbursement seems, so we've just taken that entirely out.

Um, on the department side, um, this will probably sound familiar.

So we have good news in departments, it's really public health because they are so large, um, and also some um some combination of expenditure savings in lots of programs in the human services department.

Um there's expenditure savings kind of broad-based in a lot of departments, and some of that is um in salary and benefit costs, because as you know, the mayor's office has been um holding uh a pretty uh tight line on approving positions in the current year.

So we do see some savings we think from that about $8 million.

That's pretty much washed out by um overtime costs in public safety departments, which you've already talked about a little.

Um we see the need for supplementals for the PUC, police, fire sheriff, and emergency management departments.

Um of those, the sheriff's department will require a general reserve to pay for it.

Uh, the other departments either have revenue or other expenditure savings that can cover that cost, but we um at this point we don't see how it's possible that the sheriff could cover their cost.

They will need a supplement as you know uses of the general reserve in the current year increase the shortfall in the outer year because you have to replenish the reserve and we also make no assumptions in this report about um uh federal funding rescissions or freezes or anything like that um so in in table format here's like the summary of the words I just said um if you're looking look in the center column which says six months the first bolded number you see is 38.6 so kind of looking back in time a little bit at the end of last fiscal year we had some we had some good news we ended up with more fund balance than we had projected and that's the result of a few things some of it being real strength in business taxes and property taxes um at the very end of the last fiscal year and and some of that um what's driving that is also carrying forward into the current year so I'll talk about that in a second so we're for the whole year we're um oh the final point on that is that 38.6 is now subsumed in uh the five year forecast in the deficit numbers that um Ms.

Kittler provided so that 38.6 is spent in making that shortfall smaller than it would otherwise be now it's happening we have a citywide revenue surplus of 214 million so slightly better than our last projection all the baselines take their bite out of that they all receive their required portions of that so that's 55 million that goes to the flows to those baselines and departments have a little bit of a expenditure a net surplus of about 56 million and then I'd like to talk about a few revenues because I did say this is really like a revenue story.

The first thing just kind of looking at these highlighted cells the first one is business taxes.

What we learned the at last year and the there's a delay in getting data about business taxes because you can delay your filings and it takes a long time to um to kind of go through some of those but what we learned at the close of last fiscal year was business taxes really depend on two factors the revenue that we get it's sales in San Francisco and between calendar years or tax years 23 and 24 that grew kind of with inflation a little bit less than two and a half percent what really really happened the other thing that grows our business tax revenue is that we get a portion of companies worldwide sales allocated to San Francisco based on their local payroll and that grew eight over eight percent and that's really being driven by kind of the magnificent seven tech companies you could read about their publicly reported revenue is doing extremely well and probably you're feeling that if you have any kind of investment investments of your own or if you're looking at SFR's investments you're seeing that like every the stock market right everybody is doing really well the state is also doing well with the income taxes from that.

So that's um that's really what's that second factor is what is driving our local business tax revenue at the end of last year and so we're building that's base building for the current year and looking forward that's a lot of our revenue good news in the forecast and then in the current fiscal year as we settle there's a very healthy flow of business tax litigation that you've heard from the city attorney about some of that has come before you the settlements particularly GM and Microsoft we hold back revenue when the city attorney alerts us to a revenue risk with this litigation when we have a settlement that is known and approved by the board.

If we if we held back more revenue, we get to recognize it.

If we didn't hold back enough, we've got a we've got to set it aside.

In the six month report um we had held back more than we needed to for those settlements, and that's about 40 million to the good in the current year.

Um the um the access line tax, the 21.6 million dollars, that second blue case, that's another case of that's a very um sort of unicorn legal settlement, one time um payment that we uh made a settlement for last fall.

That's about 20 million dollars and a little bit of growth.

Um transfer tax is the real news story.

Um 69 million in the current year.

Um this is really, I mean, San Francisco commercial real estate is on sale.

You can buy a building for 50 to 60 percent off.

Um, and this has attracted the attention, finally, of investors beyond kind of local family investors.

It's really attracted the attention of REITs and other just global investors, and this is really driving up our transfer tax revenue.

We saw this at the end of last year, and we're seeing it, it's happening in the current fiscal year at a slightly slower pace than last year.

Um, and this is really just the this is really the the large commercial transactions.

Um, to give you a sense of scale, um, in the last the year that ended, um half a percent or 38 transactions drove 48% of the revenue.

So 38 transactions generated 144 million dollars.

So it's very top heavy.

Um sort of individual single-family home sales, um, there's a lot of volume, but it just doesn't generate the revenue because of the the sales values and the transfer tax rate is just lower on those.

Do you have more details on that?

Meaning, like right now, um, you know, I think that as we know the uh the mayor and then supervisor Balamamu has just really proposed this transfer tax uh exemption um and changing the rate.

Do you have uh some sort of a not just projection but uh based on what we're seeing right now here?

Is that um is it do we see the transfer tax mainly coming from residents or pro I should say properties that are 10 million dollars or at 25 million dollars, like what what is really the what we're seeing is the strongest uh in terms of generating the revenue for the city?

Um I mean, in terms of like the the numbers, it's really it's really the large commercial transactions, which includes multifamily too recently.

Actually, that's new.

Um, but it's office, it's big retail, um it's multi-family, um, some industrial is really driving it.

Yeah, and then and so I mean I think the question I also have is that um do we have any ideas just by based on this 69.2 million dollars that we're looking at for the transfer taxes that were we're looking at the variance.

From budget.

From the budget.

Yep.

Are we um do we have like somewhat of an idea like number of properties?

Oh, the total number of transactions that's generating that.

Yeah, uh, we can we have um transaction detail for the year to date.

Great.

Um so if you're interested in kind of like how much is being paid at which tier.

Yeah, um, yeah, that's something that um the assessor generates that and they share that um with us so we could.

Love that.

We would love to have some of some ideas about the number like based on what you have, what we have already generated uh today, and in the projection that we're anticipating a different categories between the 10 million dollars and then the 25 million dollars, and then the number of properties that were generating this type of transfer tax.

Okay, thank you.

Um please continue.

We can do that.

Um interest income just doing well.

Um we had assumed um just the yields are better, so um thank you, treasurer.

Um the um the investments are generating a higher yield than we had anticipated in the budget, about uh um four tenths of a percent better.

And then the um I did mention that we've we've taken out our assumption of COVID FEMA reimbursements and some of the assumption about um 2023 winter storm reimbursements to the general fund.

Looking at departments, we talked about the sheriff has it.

We're assuming that they need an overtime supplemental, and that is going to be going to need it can't be entirely solved by the department.

Public works and city planning really have revenue shortfalls.

City planning just permit uh permitting fees being low, as we've seen for the past many years.

Superior Court and Public Defender, this is a discussion about indigent defense.

Um the public defender has been declaring more conflicts and having a higher caseload, sending more of those defense cases to uh the Bar Association, that contract is managed by the superior court.

That's why you see their a budget for that.

They're not part of the city, but they um we give them general fund money to um to manage and pay this contract.

Um so we're seeing um probably the need for some kind of action um to make that come in on budget by the end of the year, um, and then surpluses public health.

Uh story that the general hospital has lower revenue due to lower patient census and volume, um, and they're also having some higher expenditures on security and other things in pharmaceuticals as per usual.

Um that kind of issue at the general is offset by um some extra revenue and behavioral health, and um at Laguna Honda Hospital some prior year uh skilled nursing supplemental payments that um have been received in the current year.

Um human services agency is really a kind of a cornucopia of different programs with savings for many different reasons caseloads, reimbursement rates, etc.

Um, this is the last thing I wanted to share.

These are our reserves.

I'm happy to talk about any of them if you have questions.

Um, one note is um you'll see sort of halfway down the page, the federal and state revenue risk reserve, um, the deposit of 240 million dollars.

That's a little bit we've um that's a little bit smaller than it was a few months ago.

Just we've been updated on uh kind of it's a good news story, really.

More people are coming forward um to spend the money in their health care savings accounts, which means that there's less the quote unquote abandoned that will escheat back to the city.

So they're seeing a lot of people coming and using the the funds in their um reimbursement accounts for medical services, so used for the intended purpose, that just means a slightly smaller deposit in our reserve.

Um happy to answer you any questions.

Thank you.

I think we can also go into the six months budget status report.

That was it.

That was it.

I was like, that was the five-year-old.

I see.

You did five.

Um thank you.

I don't think that we have additional questions at this moment.

Um actually, I do actually wanted to, by definition, help us understand what is fund balance.

Could you just kind of walk us through changes in fund balance specifically?

And and because clearly people need to understand, or we all need to understand, myself included, have a better grass and better understanding the difference between fund balance and reserves.

Um maybe you could think of fund balance as like what's left over in your checking account at the end of the year, and reserve is a saving account that's off to the side.

Um, that's great explanation.

Um, and that even with that fund balance that the money that we have here, what we're looking at 525.2 million dollars of fund balance that we're looking at, roughly correct.

Um, and even with that, we know that there are money that, you know, within this category has been appropriated for the next two fiscal years.

Yes, and so the um the five-year financial plan are are um kind of the methodology that we've been using um between our three offices, the DLA and the mayor's office and the controller for the last few years, is that we assume whatever fund balance there is at the end of the current fiscal year, we're gonna spend it over the next three in equal amounts.

And so clearly that's gonna be what actually ends up being spent is a choice that you'll make, but for the purpose of um forecasting, we say we assume that we're gonna we're gonna spend it out over those three years, so you don't have a third year cliff.

Yeah, and and that basically we are saying, you know, we're we're using the remaining of the fund balance, two dirts, roughly about the 351 million that we're gonna use for 27-28, and then for the remaining of 175 million, the remaining one third, it's gonna be for fiscal year 28-29.

Sort of.

So you've already actually approved a budget for the current for next year.

Right.

Um, I mean, like, yeah, that's the the big picture how we think of it.

Um if you maybe, well, I'm looking at the the first table that I um presented.

The the current year spent 382 million dollars of fund balance.

The um the budget that the board appropriated and was finalized last July was balanced with 229.6 million dollars of fund balance, and the five-year financial plan assumed 140 million of available fund balance would be it's not appropriated yet, but we're we have in mind and we've reported it's reducing the shortfall in the third year.

So it's not exactly 30, 3030.

But we spread any new revenue 3033.

So this 89 million that's to the good today, we're gonna take six.

We assume this is again, it can be changed.

Our assumption is based on our methodology with the five-year plan, 60 of that is gonna be to the benefit of the budget that that you're going to be approving and considering in June.

The last 30 is gonna be assumed to be spent in the the year beyond the budget that you're approving.

Thank you.

Sorry, it it's kind of yeah.

Yeah, fund balance it it's not like a maybe maybe the way to think about fund balance is like it's um you have revenues and expenditures, and you have uh assumptions in your built-in your budget about what those are gonna be, and throughout the year, you're constantly you know, you're coming up a little bit above and a little bit below, like all of this is happening all the time.

Um, and then this is kind of the net operating result of of all of that activity during the year.

Great, thank you.

It's like if you can save on one bill, but then you now have to spend more on something else.

The grocery just kind of off the chart.

Now you have to get more, but then you may be able to say, well, you know what, I don't need cable TV, so you're cutting the cable bills.

Yeah, or maybe Aunt Mabel, you know, left you two thousand dollars.

Yeah, yeah.

We get settlements too.

Thank you.

Um, so with that, uh let's go to public comments on all three items.

Yes, we're now opening public comment on all three of these hearings regarding the mayor's budget instructions, the uh joint report and five-year financial plan update, as well as the controller's six-month uh budget status report.

Um as soon as the first speaker approaches the electorate and I'll start your time when she begins speaking.

Hi, thank you.

My name is Rocio Molina, the director of the Human Services Network.

We represent over 50 nonprofit organizations that partner with the city to deliver critical human services to the most vulnerable communities in our city.

First, first I'd like to recognize, you know, Sophia and the mayor's team's efforts to increase the cost of doing business allocation for FY27-28 at 3%.

When compared to this year's um next year's allocation of 1% and 1.4%, it is a clear recognition of what we've been trying to share, you know, consistently, as that, and that is that nonprofits are facing escalating costs just like the city, just like its private contractors do each year over a year.

The current CPI is 3%, and that accounts for a 13% increase in food costs.

That accounts for a six to ten percent increase in health insurance costs, which right now our organizations are shouldering completely.

A one point four percent allocation for FI 2627 essentially only covers the MCO, the minimum compensation ordinance, which all of our organizations have to increase salaries at the base level.

And of course, that reverberates through the whole organization, resulting in assessments of budgets for staffing, potentially closing positions or programs.

And all of our organizations are also facing similar uh challenges as the departments, including facing HR1, you know, budgeting concerns.

They're taking a look at the same policy decisions of whether or not to continue providing medical care to those that are uninsured, whether or not to continue delivering food assistance programs and figuring out ways to fund them on the back end.

As Sophia mentioned, this is something that we're going to continue to work on for the next few years during this administration, and we want to continue partnering effectively and successfully with the city, and we need your help increasing the FY26 27 cost of doing business.

And seeing no other speakers, Madam Chair, that completes our queue.

Seeing no public commons, uh public comment is now close.

Um colleagues, I would like to have all three hearings uh be file heard and filed in a roll call, please.

And on that motion that we uh that we consider all three hearings heard and filed.

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

I Chan, I we have three eyes.

Their motion passes.

And Mr.

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

Uh Madam Chair, that concludes our business.

The meetings adjourned.