Good morning.

The meeting will come to order.

Welcome to the March 18, 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.

Today our clerk is Brent Halipa.

I would like to thank uh Jeanette uh Yukinoff from SMGov 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 right of admit of interest comes up and public comment is called, please line up to speak on the west side of the chamber to your right, my left along those curtains.

And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the trade by the television to your left by the 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 B R E N T dot J A L I P A Hat S F G O V dot ORG.

If you submit public comment via email, it will be forwarded to supervisors and also included as part of the official file.

You may also send your written comments via U.S.

Postal Service to our office and set the in City Hall at 1.

Dr.

Carlton be good at 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 24th, unless otherwise stated.

Madam Chair.

Thank you, Mr.

Clerk.

And before you call item number one, uh we will need to excuse Supervisor Souter.

Can we please do that without objection?

Okay.

He is excused.

Um I would like to remind the public that we have budget and legislative analysts report for items two, five, six, seven, eight on today's agenda.

For those items, we will have the department presentation first, followed by the budget and legislative analyst.

Then we will take questions and then public comment.

So with that, Mr.

Clerk, please call item number one.

Yes, 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, revising existing definitions of various other terms to reflect state law definitions in that code and expand the definition of stadium concession to include food facilities and stadiums with a seating capacity of 5,000 or more.

Establish annual food perish annual permit and plan check fees for auxiliary conveyance, compact mobile food operation and mobile support unit permits, hand waive 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 that department to consult with the Department of Public Health and the Fire Department on issuing your rules and regulations that regulate street vendors.

Madam Chair.

Thank you.

And uh in conversation with Supervisor Jackie Fielder's office, and seeing that there is also request from the vendor um group, uh what we plan to do is that we're gonna duplicate the file today, and we're gonna pass one out as previously amended, and then we're gonna continue the other one to the call chair, uh, and that we so that allow us the opportunity to either create language for potential waiver or that we could either have a trailing legislation or within the legislation itself that we could uh address the issue around micro kitchen.

Um so with that, um I would like to 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 one, that is your opportunity.

Um Madam Chair, we have no speakers.

Seeing no public comment, public comment is now close.

And so with that, um I would like to make the motion to duplicate the file uh as uh and then to send the origin uh the one that is amended to full board with recommendation and to continue the duplicated file to the call of chair uh with that a roll call, please.

And on that motion that we refer the ordinance in file number 250967 to the full board with the recommendation and that we continue the duplicate of this ordinance to the call of the chair vice chair Dorsey.

Dorsey, I Chair Chan.

I Chan, I we have two eyes with Member Sauter excused.

The motion passes.

Mr.

Clerk, please call item number two.

Yes, item number two is a resolution approving the second amendment to the grant agreement between Lutheran Social Services of Northern California and the Department of Homelessness and Supportive Housing for money management services, extending the grant term by 24 months from June 30th, 2026 for a total term of July 1st, 2021 through June 30, 2028, and increasing the agreement amount by approximately 5.2 million for a total amount not to exceed approximately 15.2 million, hand authorizing HSH to enter into any amendments or other modifications to the amendment that do not materially increase the obligations nor liabilities or materially decrease the benefits to the city and are necessary or advisable to effectuate the purposes of the agreement.

Madam Chair.

Thank you.

And we have the homelessness and supportive housing here.

Good morning, Chair Chan.

Good morning, Supervisor Dorsey.

Emily Cohen with the Department of Homelessness and Supportive Housing.

And I'm here before you today with the resolution to continue the Lutheran Social Services Money Management Program.

This agreement was heard and approved by the homelessness oversight commission in February.

The resolution the resolution is the second amendment to this grant agreement between HSH and Lutheran Social Services and would extend the term of the agreement by 24 months and would increase the not to exceed amount of the contract to just over 15 million dollars.

This would continue the ongoing or would allow us to continue ongoing services for money management.

Money management is a really important tool for helping residents in permanent supportive housing stay current on their rent and pay their most important bills, which helps stabilize their tenancies and prevent eviction for non-payment.

The way the program works is that it is something people can opt into.

They sign up with Lutheran Social Services.

Lutheran Social Services will receive their income from whichever sources it might be coming in from, pay their rent and whatever other agreed upon or requested bills that the participant has, and then receive the remainder cash back for the rest of their monthly spending money.

This has been really effective.

86 percent of people who participate have achieved one of their financial goals.

And you know, not only is this somebody paying your bills for you and making sure you don't fall behind on your rent, but there's also case management and financial coaching to help improve your uh financial outlook.

We have seen a sharp decrease in payment of rent of permanent supportive housing tenants following COVID the COVID pandemic, and this has been one of our big tools to correct that, really encouraging people to sign up for this.

We've expanded capacity by over 2,000 residents for this program.

Um with that, Lutheran Social Services has staffed staffed up and have been very aggressively outreaching to tenants to encourage their participation in the program.

And it's an incredibly cost-effective program.

Um it costs on average thirteen hundred and seventy-three dollars per tenant per year to participate in the program.

And with that, I'm happy to take any questions after the BLA report.

Good morning, Nick Minard from the budget legislative analyst office.

Item two is a resolution that approves an amendment to an HSH contract with Lutheran Social Services.

The amendment extends the agreement through June 2028 and increases the value from just under 10 million to 15.2 million dollars.

Uh this would continue to fund Lutheran Social Services to provide money management services to people living in permanent supportive housing.

The contract uh will continue to have a goal of serving or having an active caseload of 2,000 clients.

We summarized the performance of the uh provider on page five of the report.

You can see they're largely meeting the um performance objectives of the agreement.

And then on page six, you can see that this is about a $2.7 million a year contract uh for the next couple of years, and it's about half funded by the general fund and half funded by um our propsy.

So we recommend approval of item two.

Thank you.

And uh we do appreciate the work.

It's it is critical.

Um so let's go to public comments on this item.

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

If we have any members of the public who wish to address this committee.

Madam Chair, we have no speakers.

Seeing no public commons, public comment is now close.

Um I think the last uh it's not for this moment, just overall just seeing the funding source uh where it's partly of that is 55 percent of it is coming from POP C.

And just um, I know that last year we had a conversation about the additional 19 million dollars.

Um that was the cap um that could be incorporated into the upcoming spending.

Um wanted to learn more about that and how overall um it's all being incorporated in terms of the spending in different categories.

Um thank you.

And so with that, I would like to move this item to full board.

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

And on that motion that we refer this resolution to the full board with recommendation.

Vice Chair Dorsey.

Dorsey, I, Chair Chan.

Aye.

Chan I.

We have two eyes with member Sauter excused.

The motion passes.

Mr.

Clerk, please call item number three.

Yes, item number three is a resolution retroactively authorizing animal care and control to accept and expand the gift valued in the amount of 100,000 from the Wilt Living Trust in support of various animal care and control operational needs.

Effective September 30th, 2025.

Madam Chair.

Thank you.

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

Good morning, Chair Chan and Supervisor Dorsey.

I'm Sophie Hayward from the Office of the City Administrator here on behalf of Animal Care and Control.

And I'm here this morning uh to seek a recommendation of approval to accept and expend a gift of 100,000 from the Wilt Living Trust.

This gift will be allocated to animal wealth to the animal welfare fund, which supports operational costs for animal care and control exclusive of personnel costs.

The funds will support the mission uh to provide care for San Francisco animals in the city's only open admission animal shelter.

And this gift to the welfare fund allows animal care and control to buy food, treats, and toys to provide enrichment for the animals in our care.

Thank you for your consideration.

Thank you.

Um we look forward to a lot of treats for our animals.

Thank you.

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

Because we are opening public comment for this item number three.

If we have any members of the public who wish to address this committee.

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Please extend our gratitude and appreciation to the Wilt Living Trust for the contribution.

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

And on that motion that we referred this resolution to the full board with recommendation.

Vice Chair Dorsey.

Aye.

Chan, I.

We have two eyes.

Member Sutter, excused.

The motion passes.

Umlerk, please call item number four.

Item number four is a resolution approving a port commission lease with Dillon's Tours Inc., a limited liability company for approximately 1,500 square feet on the ground floor of the two-story building located at 490 Jefferson Street for a term of five years to commence on May 1st, 2026 through April 30th, 2031 for an initial annual base rent of 72,000 with 3 percent annual increases and one five-year option to renew.

Madam Chair.

Thank you.

And before I call on the San Francisco port, I would call on the um aid to Supervisor Danny Sauter.

Would like to make opening remarks.

Good morning, Chair Chan, Vice Chair Dorsey, Tita Bell, legislative aide for Supervisor Sauter.

I just wanted to offer a few remarks on his behalf as he's not able to attend the meeting today.

Before you is a resolution authorizing the Port of San Francisco to enter into a lease with Dylan's Tours at the Port Property at 490 Jefferson.

This is a commercial space that's been vacant for 15 years.

And uh Dylan's Tours is a family-owned local authentic tour company founded and operated by Dylan David, a native San Franciscan with deep community roots in North Beach.

The company currently operates out of Columbus Avenue, and they're looking for a second location.

They transport their clients on comfortable minibuses and open air vehicles.

For the second location, they have committed to offering free shuttle service from Union Square to Fisherman's Wharf in order to entice visitors who may not otherwise make their way to the waterfront.

This is a clear win for Fisherman's Wharf.

It will breathe new life into a long vacant building and generate new revenue on a prime commercial strip in the area.

We would like to congratulate the port and Dylan's on this exciting new partnership.

And the supervisor hopes to have your support in moving this item to the full board with recommendation.

And at this time, I'd like to invite up Scott Lansidel from the port to present on the details of the legislation.

Thank you, Scott Lansettal, Deputy Director of Real Estate for the Port.

Good to be here again.

I want to thank Tita and Supervisor Sauter for their great partnership in trying to improve the experience on Jefferson Street and the Wharf.

I feel like together we're making great progress.

Quick overview, 490 Jefferson sits on the north side, water side of Jefferson Street.

This building has been vacant for some time.

In total, it's 3,500 square feet.

Dylan will be occupying the ground floor, really the street-facing retail frontage of the of the property.

Given that it's been vacant for a long time, there's uh significant deferred maintenance and hazmat abatement that the uh port and tenant will be um will be doing in advance of opening, which we hope is later this year for Dylan.

Um as I mentioned, Maven is a broker who was selected to solicit the space.

Um and in early um well, last year we engaged with Dylan in the final negotiation of the agreement.

Um the agreement pays $6,000 a month in rent, uh, has annual increases, uh, has an option, uh, initial five-year term, another option for another five that takes it to the 10.

Um and the port participates uh in percentage rent over a $900,000 break point.

Um this facility is also supported by an allowance, a tenant allowance.

The port will be providing of $320,000 to facilitate some of those deferred maintenance and capital repairs that I mentioned.

Um with that, I will answer any questions.

Thank you.

Just kind of curious, uh, looking at the map itself or the location as for your slide.

Um, so I see the premise, and but then there's a parking lot behind.

Will the Dillon's tour utilize a parking lot behind it for their tour vans?

Uh the vans will not be stored there.

So they actually we are giving them a license area next to the facility on Jefferson where they will be able to park uh a single van.

Um really more as a marketing opportunity for Dillon to attract um you know foot traffic to the location uh and market his uh activation.

Um, but we will not be storing buses, right?

And what about the pick up?

Like are they picking up their to go down to the city?

Uh they will be picking up at this location to start tours uh among a couple other locations that Dylan's runs kind of pickup points from, but this will be the main uh anchor location for the for the city.

And for them to so would this be one of the pickup sites and drop-off sites too, or yes, yes.

Like a um and and one of the things that I think is compelling about the use too is that Dylan's really interested in engaging with uh adjacent restaurants and tenants that become potentially part of a tour experience where you might end and have a lunch at one of the restaurants nearby or something like that.

As Tita mentioned, um Dylan's also offering the shuttle service to and from Union Square, which I think is great just in further connecting these different you know, tourist hubs.

Yeah, nothing against a double decker.

Like it's always an experience to see and and and uh to be able to be on top and see the view of the city.

But I also do appreciate sort of this van shuttles um style of uh being pick up and drop off, which is a lot more suitable for narrow streets, especially in Frischman's Wharf and around the city, around town so that people can sort of uh being picked being picked up and drop off much easier, um less inconvenient traffic uh flow to especially for Jefferson.

It's narrow uh in terms of uh streets.

Good to know.

Thank you.

Uh I don't uh we don't have any more questions.

I will go to public comments on this item.

Yes, we are opening public comment on this item number four.

If we have any members of the public who wish to address this committee.

Madam Chair, we have no speakers.

Seeing no public commons, public comment is now closed.

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

And on that motion that we forward this resolution to the full board with recommendation.

Dorsey, I.

Chair Chan.

I.

Chan, I.

We have two ayes with member solder excused.

The motion passes.

Mr.

Clerk, please call item number five.

Uh just five or five and six together.

Sorry, my apologies.

Five and six together, please.

Yes, madam chair.

Item numbers five and six, our resolutions approving and authorizing the director of property on behalf of the city and county to execute the second amendments to the following leases from KLW Investments LLC, the California Limited Liability Corporation, extending the term by four years and six months from March 31st, 2026 for a total term from July 1st, 2015 through September 30th, 2030, and granting a five-year option to renew the leases for continuing use by human services agency and authorizing the director of property to enter into any additions, amendments, or other modifications to the lease that do not otherwise materially increase the obligation nor liabilities of the city to effectuate the purposes of the respective leases and resolutions.

Item number five amends the lease of approximately 11,000 square feet of office space at 3119, 30 to 125, and 3127 street had an annual base rent of 410,000.

And item number six amends the lease of approximately 39,000 square feet of office space at 3120 Mission Street, had an annual base rent of approximately 1.2 million.

Madam Chair.

Thank you.

And today we have our human services agency here.

Good morning, Supervisor Kennis, Professor Dorsey.

My name is Alfie Penaflor, and I'm the director of facilities and administrative operations with the Human Services Agency.

Here just to introduce our space at 3119, 3120, 25, and 27 uh Mission Street for our real property lease agreement.

Um building for our economic self-sufficiency and support services, and we have a service center there that supports our clients and the community.

Um I have with me today um uh managers who are um the site managers, Gabriel Jones and Dora Ganera, who can introduce um give you a little bit more information on the services that we provide at that location.

Thank you.

Good morning, supervisors.

I'm Gabriel Jones.

I'm the business service manager for the Human Service Agency for the World Workforce Development Division specifically.

Many people know it as jobs now.

We've placed well over 35,000 San Franciscans and going up, and more than that, we've connected with the community to offer not just CalFresh, CalWorks, Medical, SF Benefit Net, but placement into permanent city jobs through our PST program, the public service training program for decades.

We're a multi-use facility.

We even have EDD station there as well.

We work in the community with the private sector with our on-site training programs, which is wage subsidized.

We also work with UCSF with the Excel program, medical assistant and placement.

We've been very successful with our outreach and we collaborate with OED and a variety of other mixed-use organizations that provide workforce services.

Thank you for your time.

I would like to also introduce Dora, who um co-manages with me at the site.

Hi, my name is Dora Granera, and I'm the program manager for SFBN, San Francisco Benefits Net.

And what we do there is we help our uh Medi-Cal clients and out CalFresh clients.

We do see our prime uh primary clients are Hispanics, uh Spanish speaking, but we do also see uh all other languages, and we help them all if they come into our office.

So we do connect with the other programs that are there, CalWorks and WDD.

We make referrals to the jobs now program.

And we help the clients apply for their benefits.

We also help maintain their benefits.

They come in to get assistance from us for renewals for CalFresh and Medical.

We also help them get their EBT card and their Medical big card.

And so we make those referrals as well since we have distribution there.

So our center for SFBN opened last year.

So we have a year there, and uh it's increasing uh slowly, but it's increasing, especially because of word of mouth, and I personally was able to hear some clients um tell other clients that we were now there.

The Medical office is now at 3120.

So it is um you know getting uh knowledge of us being there and clients are coming in and we are helping them establish.

And so we are there for the 94110 area and 94112.

However, we do help clients from any other zip code.

Thank you.

Good morning, Supervisor Chan, Supervisor Dorsey, Sally Orth, Director of Real Estate, and I'll just briefly go over uh the terms of the lease extension for you.

So together, these two sites comprise a little over 50,000 square feet, and the lease term will go from April 1st, 2026 through September 2030, with one option to extend for a five-year term.

Uh the annual base rent will be uh a little over 1.6 million dollars with a standard 3% annual increase per year.

Um we were able to negotiate a 371,000 rent credit from a retroactive adjustment, which is going to be applied to the tenant improvement project at the 3120 site.

Um but the good news is that with this lease extension, the city is able to reduce the current rent over $685,000 annually, which totals over $3 million uh in reduced in reductions over the term of the agreements.

Um at the 3120 mission site, uh the tenant improvements I mentioned are going to include restroom expansion and upgrades, break roof improvements, and uh some associated mechanical electrical plumbing modifications for a net cost to the city of 47,336.

Uh and happy to answer any questions that you may have.

Items five and six are two resolutions that approve uh lease amendments uh that HSA has with KLW investments.

Uh these lease leases provide office space for HSA and the mission uh for eligibility workers and essentially a satellite office uh for HSA programs uh for clients in that area.

We summarize the lease terms on page 10 of our report.

Uh you'll see that the lease rate is going down from our current 46 dollars per square foot uh to $37 per square foot because the lease amendments basically are reset the market rate of the lease and are backed by real estate uh comps uh in the area.

We show the fiscal impact on page 11 of our report.

You'll see that the city in the first year of the lease would pay 1.5 million dollars, and then in addition to that, pay uh 47,000 for the tenant improvement project that was mentioned.

Uh all of these costs are paid for by the general fund, and we recommend approval of items five and six.

Thank you.

Um just uh quick question about uh this sites.

Um it's been there for quite some time, and that have there actually been coordination like across like the services and and just kind of show us it's been demonstrated that truly it's really a model like where you have uh city services, a variety, you know, be it for children's services and then before jobs and training and just being located like in such a short short distance or close adjacent to each other that has been proven really work out for our constituents.

Yes, Supervisor Chan.

We've been in this building for 15 years, and originally it was a WD Walk first development.

Um, but in recent years, it has become um a one-stop center for us providing uh SFBN services.

Um family children's services is also actually located in this building.

They have a small unit to support those on the uh mission um mission district uh for for um our clients who are in in the area.

And um across the street, the 3119 mission is actually um a building that we provide to our CBO, the SENICA unit, also take um who are part of the family children's services.

So there is not just SFBN WDD but other um human services agency um uh program in this building that um our our clients and the community can benefit out of.

Thank you.

Uh so with that, let's go to public comments on this item.

Yes, we're now opening up.

Sorry, but for both yes, we are now opening public comment for both these items five and six.

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

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Um I would like to send these two items to full board with recommendation and a roll call, please.

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

Vice Chair Dorsey.

Dorsey, aye.

Chair Chan.

I.

Chan, aye.

We have two eyes.

So the member Sodric, excuse.

The motion passes.

And Mr.

Clark, please call item number seven.

Yes, item number seven is a resolution approving an infrastructure facility project agreement with PRG Petrero Properties LLC for the design, construction, and financing of a bus storage and maintenance facility for the Petrero Yard Modernization Project, which uh project agreement provides for a 30-year term commencing after substantial completion, scheduled for 2030 and expected to end in 2060.

Uh two milestone payments of 65 million at or around financial close and 250 million during construction.

Uh a five million development fee payable after substantial completion.

Annual availability payments commencing approximately one year after anticipated substantial completion and continuing continuing through the end of the term, projected to start at approximately 33 million with an estimated cumulative total of approximately 980 million, uh potential delay event or termination compensation.

Hall has provided in the project agreement and as estimated not to exceed amount of approximately 1.4 billion expressed a nominal dollars and subject to adjustment on the terms of the project agreement, affirming the planning department's determination under the California Environmental Quality Act and approving for purposes of the Internal Revenue Code of 1986 as amended.

The issuance by the California Municipal Finance Authority have tax exempt obligations in an aggregate principal amount not to exceed 900 million to finance the costs of the project and making related findings and determinations related there too.

Madam Chair.

Thank you, Mr.

Clerk.

I will say that uh what a full circle uh I think I appreciate I I want to make the remark that this project has been long time actually, even before these any of these agreements.

I was, in fact, I think this is interesting dynamic here that I was a to Supervisor Sophie Maxwell, who is a land use chair when this project was in discussion, which you know, Director Justin True was a to Supervisor as Gerard O Sanovolv, who was also a member of the land use committee.

Um if my memory serves me correctly.

Uh and so this has been a long time coming, I think, um, but it's just uh interesting where we're lending, but not surprising.

I have a lot of thoughts and I have a lot to say uh about this project.

But I think I'm gonna let SFMTA make the presentation today, and then you know we will have the BLA report, and then I I would like to really uh provide some thoughts and the entire history of this project beyond of what is before us today.

So the floor is yours.

Thank you so much, Chair Chan, uh Supervisor Dorsey.

It's great to be here today.

My name is Judson True.

I am the Chief of Staff and Director of External Affairs for the San Francisco Municipal Transportation Agency.

I'm Joy joined today by Bonnie Jean von Crow, who is our public affairs manager, who's gonna help with the slides, and we of course have other uh colleagues and uh department partners and and many others in today.

I do want to start off if you'll indulge me briefly and recognize that today is Transit Employee Appreciation Day.

Uh and so uh really want to thank uh not only my colleagues at uh Muni and the SFMTA, but all the transit employees around the Bay Area and the world that keep us moving.

Uh so thank you very much for letting me do that.

And I do want to just start uh in on a presentation on this project as uh Chair Chan, as you've as you've noted, it's been a long time coming.

Um, I think that bringing this project agreement to the Board of Supervisors for approval is the culmination of more than eight years of work on the petroleum yard modernization project.

I think as as you recognize Chair Chan, it's actually you know more than eight years, and and that's sort of the formal timeline, but I think uh there were discussions uh going back to those to our our our days here uh walking these halls in the in the aughts uh and and that history is important.

Um I do want to emphasize that delivering a new Petrero yard is the highest priority for the SFMTA's building progress facility improvement program.

And with our train control upgrade project, it represents one of the two uh most important capital projects for the SFMTA in the years to come.

A little bit about the project.

I think the project need uh becomes clear very quickly.

Uh at over 11 years old, uh the existing petrero yard is functionally obsolete.

Uh staff have been challenged by space, equipment, working conditions, going back to 1915 standards when the horse and horse drawn cart was the predominant mode of transit in the city.

Um this has slowed down.

This obsolescence has slowed down bus maintenance repairs, and of course, made it very hard for our staff.

Uh the yard has been operating at crush capacity and is too small to accommodate accommodate needed growth of muni service.

And to continue to operate this yard, which we are not doing now, as I'll get as I'll get to in a moment, puts both lives and property at risk from a major seismic event because of the uh the antiquated nature of the facility not being uh up to today's seismic standards.

The project scope uh should be fairly familiar.

Uh it's it's a new modern four-level infrastructure facility.

Uh it's going to allow us to operate our transit service much more efficiently and allows us to add uh about a hundred uh trolley buses to the capacity of the yard.

Uh we're also moving our training functions there, which will help us uh bring in uh each successive generation of Muni operators.

And you know, because we this this facility is of course in a dense urban area.

We also are working to improve the streetscape around the project.

I think it's important to emphasize here that it it may not always be as obvious as it seems, but the bus yard is crucial to all the muni service that you see on the street every day.

Uh it's it's it's a piece of infrastructure that is not it's not a nice to have, it's a must-have for the Muni service that we uh get out on the street every day.

The Petrero Yard roles in role in particular, as you can see, it's essentially tied with woods as the one of the busiest yards, the busiest yard in our in our system, uh serving a little over uh a fifth of our total ridership.

Uh and I do want to emphasize in particular that equity is at the forefront of the service coming out of Petrero Yard, all five of the routes served by uh muni service coming from Petrero are muni service equity uh routes, that they serve neighborhoods including low-income households, many people of color, and those with the fewest transportation options uh in our city.

I do what uh I think it must go without saying for any project that's almost a decade in the making, but this project has been a tremendous collaboration effort across you know many city departments and uh partners outside the city, of course.

Without their expertise and devotion of so many city staff uh and community partners, a project would not be possible.

I do want to take just a moment to thank a couple colleagues, uh, some of whom are here and some of whom are not here today, of course.

Um Victoria Wise, who runs a street division that had this project is under Sean Kennedy on her team, Perand, uh Maleki, Chris Lazaro, Tim Kempf, Bonnie Jean, uh Von Crow, John Angelico, and Caroline Cabral, among many others who've been working on this project in some cases for close to the length of the project.

And then we do have colleagues here from uh the planning department and the mayor's office of housing and community development as well.

Uh at different points, they've been essential partners, and we've also worked closely with OEWD, uh, public works, and of course, our uh our city attorneys as well.

I think when you when you boil this project down to what it's about, it's really about the Muni service and about the staff uh that work at this yard.

Uh the project has widespread support among Muni staff.

They know firsthand the inefficiencies, drawbacks of working in the outdated yard uh today.

And uh what you see here is a few uh quotes from some of our key staff uh who have are just representative and and leadership staff on the maintenance side who have uh experienced uh the challenges of the yard and uh look forward to a new one.

Uh we did uh cease to uh serve uh out of this yard uh last month, and that is uh part of this transition.

And we were able to celebrate both with uh current employees and as you can imagine, many employees were have been coming to this yard for years, if not decades, and some people who used to work there came and we celebrated them, and then we also uh joined some community members for the final pull-outs of the yard recently uh on Valentine's Day actually in February.

So uh again, just marking that that important milestone.

We are at decision time for the project.

Uh following the approval of the project agreement, we uh plan to prepare the site for construction uh with significant construction starting later this year, early next year, and some prep in the summer.

Construction would last about four years, and the new yard would be slated to open in 2030.

If this project agreement is improved, the housing uh development on Bryant Street, which I'll get to in a moment, can proceed with applying for their affordable housing funding sources and getting that that project going.

I do want to show a brief uh look at the project's evolution.

Um specifically noting the variants that were entitled uh just a couple years ago in 2024.

Uh development of the housing on the podium uh and of course and on the Bryant side was always subject to funding sources and availability, which is why we plan two variants.

In the upper left, you see the version that includes the uh proposed 465 units of housing affordable and workforce.

And in the lower left, the variant uh shows uh our our intention to have Mini's paratransit fleet uh parked above the yard if the housing had never materialized.

In either variant, the hundred units of a proposed affordable housing on Bryant are shown.

So you can see that on the on the photo on the right hand side on the bottom right of that photo where it says proposed Bryant Street housing.

Um the final project has clearly been impacted by the SM SFMTA's financial crisis and increasing development costs and the challenge of development in general right now.

Construction costs, interest rates, market volatility have all escalated since we started engagement on this project in 2018.

It's worth noting just since we did start in 2018 formally, you know, we had a pandemic that intervened you know intervened there, and it's it's the world is very different than it was when we started that.

And I I wanted fully acknowledge that we had to make changes to lower the cost of the design and the construction.

And on the right, you see the final project after those changes, where the and I'll get in a little more detail, but clearly there's no roof there and the buses and washing are on the top.

Uh again, I want to be clear and acknowledge and apologize for the fact that the scope of the overall project has been reduced from the original vision of a bus yard with housing or paratransit on top of it in order to reach an affordable uh price and make the project financially viable.

We need we made a number of changes, and I think you'll hear from some of them from the budget analysts, like removing the public-private partnership operation and maintenance of the project, but I want to focus on the decision to remove the roof and the podium and therefore the potential for housing above the project.

Uh a major upfront cost was the reinforced podiums to structurally structurally support housing or pair transit above the bus yard.

Removing the podium made the project affordable for the MTA, but but unfortunately eliminated the opportunity to construct housing or pair transit above the bus yard.

That was an extremely difficult decision, but it is what makes the project financially feasible today.

Uh we also want to clearly recognize that we approached this project and this change to the project as a technical process to reduce costs, but we should have highlighted the challenges to the community earlier in the process.

Uh we want to be upfront about that and identify that that learning moment where we wish we had improved our outreach and communication, and it's something that we intend to uh work on in the future.

The changes uh to the project allow the MTA to move forward with developing a modern bus yard while still enabling uh the production of uh affordable housing on public land of about a hundred units uh along that Bryant Street frontage.

At the left you can see uh a slightly uh more sketched out rendering uh of the Bryant Street housing, and at right is a view of the bus yard.

The project has done incredible amount of outreach over the years, led by in in recent years, especially Bonnie Jean and her team.

They've done comprehensive bilingual outreach, meeting people where they are in the community.

Uh I was able to go to some working group meetings last year, uh, one in particular, the one where we talked about the housing, and I was just impressed by the level of engagement there.

Um in the last five months, there have been 26 community meetings uh to talking about the project changes.

Uh and I do want to specifically acknowledge the work of the Pretrario Yard neighborhood working group.

They that started meeting in late 2018, and we recognize that many of the members of that group are frustrated and disappointed with losing even the possibility of future housing uh above the bus yard.

Uh development projects like this one are impacted by many factors outside of our control, and again, a lesson learned here is that we must do better about highlighting those risks as we as a project proceeds.

I do want to emphasize uh that many of the public uh amenities uh that got developed in consultation and collaboration with the working group and other community members are uh retained in the project, and I just outlined some of them here.

Uh there's a public set publicly accessible community room.

I know as uh as someone who's been going to community meetings in San Francisco for um you know much of my career.

Uh you know, it's really important for community members to have a great place for their neighborhood groups to meet, and we're gonna be excited to provide that.

There's a public restroom near Franklin Square, which will serve the parkourers.

And again, I mentioned the streetscape improvements.

We've got some updated bicycle infrastructure in the vicinity, and again again the affordable housing on Bryant Street.

Next slide.

So now we're here to talk about the project agreement.

And I Chair Chan, if you'd like to pause me to pause so you can recognize the uh addition of one of your colleagues, I'd be happy to do that.

No.

All right.

Welcome, Supervisor Cheryl.

Uh so following months of challenging negotiations, the SFMTA and our our development partner, because this is a public private partnership, the Proof Collective, have reached a final fixed price of the bus yard totaling $612 million.

Uh like purchasing a home with a mortgage, not something I've done, but I've heard about this.

Uh the new Petrero Yard will be uh financed over a 30-year period through that public-private investment.

Uh the SFMTA, and you you heard some of these uh details when um the project was last before you, Chair Chan in late 2024, but um so some of this might be familiar, but we uh must make two milestone payments before and after construction.

One of them is now sixty-five million dollars and one is two hundred and fifty million, which together is similar to a down payment on a on a new home.

Uh and then we must make availability payments of $33 million per year over uh 30 years, similar to mortgage payments.

Uh I want to note that none of that funding uh can be used for housing and is only available for the bus yard.

Uh the process to reach this affordable price has not been easy.

The project agreement locks in the final price, and any delay now would require repricing the project, which would very likely make it uh unfeasible and unaffordable for us to move forward.

Uh we are excited that the project uh is is now governed by a project labor agreement uh which promotes efficient construction, ensures adequate supply of skilled crafts workers, and just helps with uh any potential labor disputes.

We're uh glad to see that that in place.

Uh and then finally, again, the project uh does enable the bright the hundred units or so of of Bryant Street housing.

Uh that those range from studios to three bedrooms.

Uh construction, like any affordable housing project is dependent on the project successfully uh competing for a variety of uh funding sources, but we look forward to be a partner there.

We we do not fund housing, but we are uh providing the land at a significant um and not not a very significant cost.

Our board did approve uh essentially a term sheet or a lease and disposition and development agreement uh at our board meeting two weeks ago.

Uh and the the ground lease for the affordable housing will come before you uh in the next few years as the project proceeds.

Uh this is more of a request.

We obviously know you're gonna hear from the budget analyst, and we we uh welcome the amendments that the budget analyst and legislative analyst is suggesting.

We do have another uh suggested amendment uh that we have shared with your offices that um responds and puts in the record uh some issues that were raised at our uh the MTA board meeting on March 3rd.

And uh that's here on the screen at the right moment.

Um it can be read in the record, I'm sure, but essentially it just adds a whereas clause to again note uh sort of provide the breadcrumbs in the file of how this project interacts with the uh approved housing uh zoning plan and approved city housing plan, a housing element that you all uh have acted on.

Um I think that that is the conclusion of my presentation.

Again, I want to uh appreciate uh everyone who's here today.

I know we're gonna hear from uh many and the in the audience as well, and look forward to uh hearing from the budget analyst and then engaging uh with you, Chair Chan, Supervisors Dorsey and Cheryl on uh this crucial project.

Thank you.

Item seven is a resolution that approves an agreement between MTA and Petrero Properties LLC, uh, in which the uh vendor would uh secure financing, design, and construct a new bus facility at the Prero Yard.

Uh the agreement has a 30-year term and a cost of about 1.4 billion dollars.

Since we last looked at this agreement when it was at the board in December 2024, uh there have been a number of changes.

At that time, we pointed out that that agreement, the prior version of the agreement had an operation and maintenance component, which was five times more expensive than what MTA was spending at the time for its own operations at that site.

And in addition to that, that the financing cost of that agreement was about 120 million dollars more than if the city self-funded this construction project.

This agreement actually addresses both of those points.

It removes operation and maintenance from this agreement, saving about 776 million dollars, and it restructures the financing to essentially be equal to what the city would pay if it issued a bond to pay for these costs, saving about 283 million dollars on the agreement.

We summarized the changes to the agreement on page 24 of our report, and you can see it's about a billion dollars in savings.

In addition to that, the MTA went through a value engineering process to rescope the construction project to make it more affordable.

The major change that we know in that table is that it reduces the capacity of the building to have uh housing on top of it.

That's uh $160 million savings over 30 years.

As we show on page 25 of the report, this agreement, um it's not it's a little unconventional.

It's not like we issue a bond and then pay the debt service uh over 30 years.

Instead, there are two milestone payments, one of $65 million when the financing is secured, one of $250 million once the building is complete, and then annual payments of about $33.4 million for the 30 years after the building is constructed to essentially pay off the debt uh that the developer took on uh for the project.

But again, there's no uh operation or maintenance component.

And we can show on page 25 also uh the various funding sources to the extent that they have been secured uh for this agreement.

The milestone payment to that $250 million payment, $200 million is coming from the ETER bond that is scheduled for the June 2026 ballot.

Um if that bond doesn't pass, there is another opportunity uh to go to voters to secure that payment uh before that payment would be due around 2030.

Uh so we do recommend approval of this agreement.

We do also recommend that the resolution be amended to remove the word uh estimated uh from the resolution and as well as language around stating that the not-to-exceed amount can be can be changed, subject to changes in the agreement, because this $1.4 billion already has a contingency built into it to accommodate um changes between now and when the agreement is finally executed.

Happy to answer any other questions.

Thank you.

Um, I think that it's been long debated that for this specific site, whether it's a possibility to have a patrol yard or a bus yard and then have housing on top.

I think it's been a long conversation since I was a legislative aid to Supervisor Sophie Maxwell when she was the land use committee chair.

And I think that there was a lot of concerns and how would that look like?

And I think eventually, thanks to Supervisor Shaman Walton and Supervisor Hilly Ronan, I think there was a lot of effort along with SFMTA to be creative and innovative, recognizing housing is important, and that what we can do on public land, and in this case, SFMTA land, that uh if we have the opportunity to uh build a need uh that we need for a new bus yard, and and then what can we do on top uh of that space so that we can have housing and will be a collaboration and creative and it will be something that meet all the needs.

Um because we have done something very similar too in San Francisco, and I think most recently this very body has approved um a project where there will be a hotel in downtown and then which allows the developer to also build the city a new fire station in the very same area uh adjacent to it.

Um so it is disappointing for me to learn that today we're looking at a design that no longer have housing on top, and that we significantly have lost uh a numbers of affordable housing units.

Um I am disappointed that SFMTA um have made this decision without allowing more thought specifically to say why we cannot build housing on top right now, because it's not feasible, that we could do whatever we can in the existing design that be a reinforced podium uh particularly to then allow for the future um possibility.

I get that is a cost saving for the design, but I I think that there isn't a concrete effort that to say be especially the fact that we are we've been supportive of SFMTA to be part of the two, you know, 2026 June bond that is actually not scheduled for to be included there to say let's put in 200 million dollars of this $535 million bond, which is almost half to go into patrol yar, that I wish that we have more conversation and or more effort to say, well, within that bond dollars and what we can do to have a reinforced podium, allow future opportunity.

And I frankly, I also think that if we do that, I I think it will ease a lot of financial burden for developers to be able to come in and say, well, now we can talk.

Now we can actually like yes, weakened the pot.

So maybe we can now build housing on top besides this 100 something units of affordable housing on Bryan Street.

We can be more creative and can we can think like baker.

Um for all the fights that we have last year uh about family up like family zoning plan and up zone and how we can build more and how we can build higher and dancer so we can have more housing.

This is a significant uh reduction and roll back from the city itself.

And I I am I'm the photo.

I I I I am confused.

Um I would like to see that today discussion.

Uh I am supportive of what we got today, because I think that it is important to have what we have.

But I am not going to walk away today with ongoing conversation and frankly a commitment from SFMTA and from the mayor's office and from the mayor to say that we are going to figure out uh financing and possibility and design for a reinforced podium so that we can build housing on top to not to give away that opportunity, and that we're gonna do everything we can in figuring out with any developer available to us for to fulfill our obligation of the 465 units uh of avotable housing.

And that could be on site and also including off sites uh at this space.

Um I I think that I would like to see a commitment, a written commitment from SFMTA and from the mayor and with that commitment before next full board meeting.

I I I my my thought is that we're we're probably in support.

I am in support of this uh as of today uh and would like to send this out to full board so that we can then continue that discussion and have that conversation.

This has to move forward, um, I believe, um, to get the project going and and get it done.

But I I am not going to be in supportive of it on Tuesday if I don't see a commitment from SFMTA and from the mayor to say we are going to figure out either additional financing or f meanwhile, because you're not going to start construction like end of the year.

You're you're gonna you're gonna there's gonna be some time before you you're able to do that.

I would like to see the effort of uh from the mayor and SFMTA.

I know you cannot fund housing, but what you can fund is a reinforced podium to then allow housing to come on top.

So I want to see a commitment, uh written commitment to say that you will do that.

That the we is it certificate and participation, is it some other way that the city actually can utilize to add to the project so that you can actually uh build reinforced podium uh or roof so you allow housing on top at a later date.

And that could be something that I think um is actually where the vision we all align.

We want more housing.

Um it can be done, so why don't we do it?

Um is where I'm at.

Vice Chair Dorsey.

Thank you, Chair Chen.

Um I agree um with much of what you said.

So I did want to tease out if I might financing from the the Easter bond.

Um it's my understanding from milestone payment number two is I believe 200, it says 250 million, but I believe 200 uh million of that would be from the ECER bond before voters now.

I have sometimes heard and not just this ESER bond, but uh previous ones over the years.

Um there are sometimes questions when there's a bond funding that's not specifically for emergency services.

People wonder why it's important.

I always remind people that this is this this bond is called the the earthquake safety and emergency bond uh uh response bond.

Can I just invite you to explain why this is important in terms of earthquake safety, that this is a valid expenditure if it is.

Thank you, uh Supervisor Dorsey through the chair.

Uh absolutely Judson True again, uh Chief of Staff at MTA.

So the Patro Yard Project qualifies under both all the letters of the acronym uh emergency safety uh earthquake safety and emergency response.

So, first of all, as I as I mentioned, the the building is 110 years old.

It is uh to call it seismically unsafe is to uh understate understate the case.

Uh and so it's very important for city buildings where people are working doing things like maintaining our transit fleet to provide a central muni service that those buildings are resilient and that they're they're going to uh exist after a uh significant seismic event.

Uh so that's sort of the baseline.

Um I also want to emphasize how central Muni is to the city's emergency response after a major event.

Uh we can transport first responders, we can move people around as needed, and having uh a modern seismically safe facility uh is an important part of uh the city's response to emergencies.

So we and I think one of the one of the things that the um the conversation around the bond, and I do want to thank all the supervisors for their support of the bond uh with the 200 million for Petro Yard, that that that did is it's it's even further strengthened those conversations with uh the Department of Emergency Management, of course the mayor's office, the fire department, and others.

And so uh I think that we we have we make we believe very strongly that we are uh properly uh you know that that the petrole yard project fits uh well within that uh that bond.

Thank you.

So that's your shell.

And welcome.

Thank you, Chair Chan.

Um I uh I'm pretty disappointed about the reduction in the affordable units.

Um so I want to make sure that I understand the financial considerations of all this.

Um basically, if I'm reading this all correctly, not building the podium that would allow the 365 additional units or whatever.

That podium costs 70 million bucks to build.

Is that about right?

At the time when we value engineered it, yes, the the cost estimate was 70 million plus financing if you add that as well.

I I just want to make sure I understand this.

Uh it says the project achieves possibly 70 million dollars as a one-time cost savings, which reduces total project cost by an estimated 161 million dollars, including debt service costs.

Over the life of the project, should I read that as no podium equals a saving of 161 million dollars, or should I read it as no podium equals a savings of 231 million dollars?

I'll choose option C supervisor.

It means that it's a savings between 70 and the 160 because there's the upfront cost, and then depending on if housing did move forward at a future date, uh the housing would be required to pay for whatever the financing uh has cost up until up until that point.

And so, you know, the the 160 is if it was built at the very end of the project, but it could be somewhere in between there uh if if the housing was built midway through, because we're essentially paying for financing of the debt service, you know, year by year.

And so whatever years we hadn't paid yet would would not be included, but the ones we had would be included.

So it's somewhere between that.

But I do also want to emphasize that that was a moment in time.

And at this point, we do not know how much it would cost to pause the project, uh, go back out to bid uh for all the contract the the general contractor and all the subcontracts.

And our j our our reasoned belief based on all the facts that we have is that the project would become infeasible uh because the cost would have increased beyond what we've negotiated over the last uh several months, and we we we think we would probably almost certainly not be able to pursue the project right now.

That would also then stop the hundred units of affordable housing from being able to move forward.

So I do want to make that very clear.

Okay.

And and understood, thank you.

Um but even at like the most basic level, let's just say the podium costs 70 million bucks.

In order to build housing on top of the yard, it would be the cost to build that housing plus an additional 70 million dollars.

Correct.

So it would basically add like 200,000 in construction cost per unit.

I would defer to MOCD on exactly the.

But essentially it would become you know a that that's like a way of thinking of the value of the land, which is you know significant right now.

You know, that that's one way of thinking about it, but I would defer to Robert Backa, who's here from OCD if you have particular questions about the housing cost.

Yeah, one of the reasons that I like the idea of using government land for affordable housing is that theoretically the land cost is zero, but in this case, the land cost is not, in fact, zero because of the podium needs.

Is that okay?

The cost of the land on the 100 uh on the Bryant Street parcel we've negotiated is uh about $17,000 a year, just to give you an idea.

And then um obviously $200 million of this whole project comes from the Easter bond.

Great.

I'm assuming the rest of the money comes from the F S FMTA's capital plan.

Is that we have a variety of of local, regional, state and federal sources, and then the uh that we have identified for the first payment, and then we will identify them going forward, and then the availability payments will be sort of the first slice of our capital, our capital spending in future years.

If we were to decide to redeploy that minimum $70 million, probably more towards the podium here and take it away from something else.

Do we have a sense of what other projects would go by the wayside?

Well, we we not specifically, but we couldn't do that at this point without the project essentially stopping.

But we don't I mean what what we to be really clear on what happened, essentially we had a estimate of what the cost would be.

We got to the point where we went out to the contractor market, we got cost back from the development, you know, the lead develop our lead development partner and their contractor, and those were far apart.

It was about 30 percent higher than we'd estimated.

So we had to find a way to meet that in the middle to make it affordable, and the only way to do that was to do the value engineering on the podium and to remove the the OM, uh, the operations and maintenance that was originally in the in the plan.

Got it.

And then can I ask one other very basic question?

What is the impact of the SFMTA's capital plan on the SFMTA's operating budget?

Does the operating budget include debt service costs?

Uh the operating budget does include, I mean, I would defer to my partner, my my colleague uh Brie Morder, who is the chief financial officer, but I believe that we have revenue bonds and that the payments of those revenue bonds uh come out of our operating budget.

Um but the availability payments for the petroleum yard project are intended and planned to come out of our capital budget right now.

So I mean but I'm sorry to interrupt, but either way, that be it with housing or without housing, the maintenance of it is still actually coming out of your capital project.

But typically, when you actually go out for any capital project, your debt like fees actually is being covered by the bond.

It's not covered by the department.

That's how we reissue.

That's why we re when we issue the bond, that it's inclusive of the fee.

Correct.

Yes.

It's not being paid by specific departments.

I if I understand your question, uh can you restate the question?

I I think that's the question.

I think my question is supervisor short.

What what what budget line does the debt service costs come out of?

For this project, it will come out of our capital budget.

But I want to one of the way reasons this project is so important is because it is going to allow us to maintain the vehicles much more efficiently, which has a direct impact on our operating budget.

Totally.

Yeah.

That all makes sense.

Thank you.

I appreciate it.

Thank you.

Again, I I think that like what I'm seeing here is that there is a redesign of the ground floor, which would reduce a retail space.

Uh what I see is the lack of reinforced like the it's the lack of vision for a future opportunity that we're now basically spending to it's we're it's very similar to what we have done with Trans Bay term bus yard or bus terminal.

And what we actually have done is instead of figuring out and being able to build out for the future, now we're stuck in with two billion dollars bus uh terminal at at Trans Bay, and here what I'm seeing is we're spending 200 and something million dollars to have a bus yard, which is critical.

But what I'm also seeing is that in in the in the scale, if we were to invest additional 70 million dollars, and that we can actually have housing, both affordable and potentially a actually an economic engine on site to pay for the maintenance on the in the long term for the actual bus yard.

What you have to actually forego right now, in my opinion, is not it is basically saying, well, yes, we get this bond dollars because it's immediate, we can get this project done, which is great, and it's the reason why I'm a supporter of it, it's necessary.

But what I also see that without a reinforced podium is then you are also now for go as uh as a department.

The future opportunity for you to generate revenues is what I have seen.

That is the reason why SFMTA is the is where you're at in with the budget deficits for so long.

And because if you think about it for the long term, the be it the debt service, uh, it's not one year, that debt service is going to be pay over three decades time.

And is exactly what we did with you know, uh uh recently a hotel, you know, in downtown, we are saying that it's over 20, 25 years of time for 40 million dollars uh for tax increments.

And in the very same way that I'm looking at this is that we do investments in the upfront, then we allow future for building that could be actually a mixed use on top.

It doesn't have to be all housing, it could again be mixed use that allow whatever it is that allows some kind of because you're already doing retail on the ground floor.

Um so I'm just saying that we are squashing a vision and we're squashing an opportunity for future because now we're shortchanging ourselves because the cost of construction will, in my opinion, will only go up.

It will not come down.

So why don't we take the opportunity right now for the 70 million dollars investments and not be able to come to that?

I can understand that you know, for right now, we we look at the bond dollars that we have and we want to count on that bond bond dollars that we want to have in June and then be able to move forward.

All I'm saying is I would like to see a commitment from SFMTA and from the mayor to say that while we're committed to this bond dollars, we are also not gonna forego to the commitment to seek financial solution and potential resources that allow us to actually be able to invest in a reinforced podium down the roll, and that we can then allow that opportunity for build housing and build more uh on site, and that continue to seek be it regional bond and any other sources to fulfill the obligation of 465 units of affordable housing that our that the city has promised to the community.

So I'm I'm seeking a lot.

Um I'm asking a lot, but I think that's my job to ask all of that, because this has been eight years in the making, for the very least for just this project, and now we completely just reverse what all these eight years of work that that actually you all have done uh to get to where we need to be.

And so I'm only asking for us to not give up and be able to hold on to that vision and have some commitment and that dedication from the leadership, both Director Cushbaum as well as Mayor Lurie to say specifically and dedicating resources and efforts and staffing time that we will identify funding and resources to build for the future.

Thank you, Chair Chan, and uh I certainly understand your disappointment as I mentioned in my presentation.

We share the disappointment for us.

It's been a decision about it's been a binary decision about moving forward with the project without the podium or not moving forward at all.

Not we did not we have not seen a path that includes a podium, and I think that's even more true now than it was last summer and early fall when we when we moved away from the podium when we made those project changes.

So but I we look forward to continuing to to discuss this with you.

Thank you.

I I I am for one, I like what your answer is is that option C.

I am looking for option C.

Um, thank you.

Um Thank you, Chair Chan.

It's always clock appreciate seeing my colleague here.

Yeah, nice to see you as well.

Uh seeing no more names on the roster, we will go to public comment on this item.

I guess we're now opening public comment for this item number seven.

If we have any members of the public who wish to address this committee.

Please line up by the uh by the curtains over to the right.

And as soon as I have my first speaker, I'll start your time in two minutes.

Good morning, Chair and members of the budget and finance committee.

Thank you for giving me the opportunity to speak today.

My name is Jesus Mendoza, and I'm a field representative at North Coast States Carpenters Union Local 22 here in the city of San Francisco.

Today we stand at a transformative moment for San Francisco Public Transit.

The Petra Yard Modernization Project will replace our century-old seismically vulnerable bus facility at 2500 Mariposa Street with a modern, efficient four-story maintenance and storage yard designed to support our growing zero emission fleet and deliver more reliable muni service for every neighborhood.

We understand this is a vital uh project for the SFMTA, and we are genuinely excited to move into this next phase, which is the construction phase.

For nearly a year, we have collaborated closely with the plan uh the plenary uh team to develop a strong labor commitment that prioritizes good jobs, local hiring, and community benefits.

We also look forward to working alongside our longtime industry partner in Webcore, the selected prime contractor, as they lead the construction effort, bringing their proven expertise and building transportation infrastructure right here in San Francisco.

This public-private partnership with the infrastructure facility project agreement before you today secure design, construction, and an innovative financing, including up to 900 million in tax exact bonds, while capping our long-term commitment at an essential 1.396 billion.

Approving this resolution clears the path for groundbreaking substantial completion by 2030 and a stronger, more sustainable muni for generations.

Thank you for your support and I hope we can move forward and work together.

Thank you much, Mrs.

Mendoza.

Next speaker, please.

I always say it's hard to go after the carpenters.

Um my name is Trisha Gregory.

I am a micro first of all, excuse me, good morning, supervisors.

Uh my name is Trisha Gregory.

I am a micro LBE out of uh Bayview Centers Point for the last 25 years.

I'm here to ask for your support for the Patrable Bus Yard because of the last two to three years, plenary with the SFMTA has met with community groups.

They have listened to us, understood what is important to the LBE community.

They allowed us to give input to establish an LBE SBE plan, which is huge for a developer to sit with us.

They listen to us as we encourage them to talk to Webcore, who already has a plan and a blueprint in place.

Thank you much, Teresa Gregory.

Next speaker.

Good morning, supervisors.

My name is Ricardo Maroon with Ricardo Maroon Construction.

Uh local small business here in the city of San Francisco.

Uh simply here to support the project.

Um we are signatory to the Carpenters, Masons, and uh laborers.

Uh, I think this is a project that serves a community, serves the workforce, and serves San Francisco.

Thank you.

And thank you for addressing this committee.

Next speaker, morning, board of supervisors.

Thank you for the time and the opportunity to speak.

My name is Tristan Dion.

I'm owner of Streamline Drywall.

We're a small and local business enterprise here in San Francisco, and also signatory members of North Coast State's Carpenters Union.

We are here to speak to our desire to contribute to this project and to see it actually move forward.

It has the potential to provide economic opportunities for the local community, which are greatly needed.

Some of the high excuse me, high-level benefits include improved safe and reliable muni service, public land leverage to build affordable housing, economic inclusion approach that prioritors small business participation and culturally relevant public art.

We are requesting that carve outs and set-asides be orchestrated as the trend in our industry has been for much larger primes and general contractors to self-perform multiple scopes of work, which creates exclusion for smaller contractors such as Streamline and many others.

The housing portion of this development, which we are also hopeful comes fully back online and not just partially, needs to have an SBE LBE requirement with a preference towards local business enterprises to help sustain the local business community.

We strongly encourage a yes vote and urge you to support the petrol yard modernization project with over 520,000 daily Muni riders.

The City of San Francisco needs both a new bus yard to improve transit reliability and new housing now.

Thank you for your time.

Good morning.

My name is Mary Travis Allen.

First of all, I need to give acknowledgement that to the Ramatar Shalone, who are the original people of this land that they never see that their homeland, which this city and project exists.

I'm the co-chair of the leadership council of the American Indian Cultural District.

I also sit on the equity councils for planning and SFMTA.

I worked for this city for 32 years and retired as a senior operations manager at SFMTA.

I joined the Petra Yard Neighborhood Working Group in July 2023.

I want to quote something that's on the project's website.

Early in the project development, it was determined that while the modernization of the bus yard was crucial to keeping San Franciscans moving.

There was a great need and opportunity to utilize the airspace above the facility for affordable housing.

This goal is in alignment with the city of San Francisco's housing elements, and then there should construct 82,000 new housing units by the year 2031.

Where is that?

Also, there was a commitment from MOHCD to 35 million dollars for this project.

I asked for accountability of the money.

I asked for accountability of expenditures because the need for housing for the community.

We were asked to write letters of support.

We did.

We came out in support of this effort.

And we asked for this city to keep its commitment to the presentation.

Speaker's time has expired.

Thank you.

But thank you, Mary Travis Allen, for addressing this committee.

Next speaker.

Hi, my name is Marie Sorensen.

I'm with CAE Vente Cuatro.

Several years ago, MTA came to the Mission Petro community saying they wanted our help and bringing more affordable housing to the mission above the Petrero yard.

Well, the project moved along until the plan recently changed.

Now only a hundred affordable units can be built.

And then screw them.

The conundrum is the state mandate requires 565 more affordable units.

And what can be done to make up for losing so many units while under the state mandate, build on the Petrero side or land bank in the mission.

There's a lot of questions that need to be answered before this project can move along.

And you know what?

We don't need more afford we don't need more market rates slash luxury housing in the mission because that's what brings gentrification and the mission has been fighting gentrification for the last many, many years.

Thank you.

Thank you much, Maurice Sorensen.

Next speaker.

Hello, Chair Chan and Supervisors, Peter Papadopoulos with the Mission Economic Development Agency.

And on behalf of the Petrero Yard affordable development team, including the Tabernacle Community Development Corporation as the mighty team.

We are proud to be developing the Petrero Yard site along with our city and development partners.

And that will be adding to this transit modernization project by bringing about affordable housing units that it so desperately needs for this neighborhood.

While we're disappointed that we aren't able to complete this full vision for the site, we still feel that joint development with the MPTA provides an important model that we do look forward to continuing to refine in future years.

Building a hundred affordable homes is an important outcome, but given the size of need in the neighborhood, with many thousands of low-income residents continuing to be displaced.

We want to see a path for our development team to complete the remaining 365 units somewhere in the mission with the help of city agencies.

In the meantime, it's critical to the stability and capacity of our development team that the city reimbursed the team's out-of-pocket design costs incurred for advancing phase two of the housing project and used to entitle this bus yard.

Thank you.

Thank you much, Peter Peter Paul Badopoulos.

Hello, my name is Natalie Ortiz.

Um I am a community leader in the mission district.

Um that represent I represent many different vulnerable communities, so I'm always wearing multiple hats, that be it.

Um part of the Sheriff's Oversight Board.

I am the deputy director of Lovers Lane that also represents artists.

Um part of nuestra causa, calle 24, and I come today to say that the I'm represented in vulnerable communities and currently working at a family shelter called the OASIS Family Shelter.

And the need for housing as the as someone who's constantly trying to house people, constantly advocating for those that are being um not thought about in this in these processes.

And so I'm asking and urging that we advocate for more housing, that we make it what they said, like Grandma Mary said, she said it was in their website, they said they would do affordable housing, um, and now the the number has been lowered and is just not matching up.

Um so we really need that support we for more affordable housing.

Thank you so much.

Thank you much, Natalie Ortiz.

If we have no further speakers, actually, I'd also like to take this time.

Um we do have a rollabout standing in the chamber, so unless you're in line for public comment, I do ask that uh you take a seat.

And with that, Madam Chair, that completes our queue.

Seeing no more public comment, public comment is now closed.

Before I call on Vice Chair Dorsey, I want to again articulate this.

I I think that today I'm in support of this.

I'm not trying to hold this project up, and that I do want to move it forward.

I'm going to offer this uh as an option, and I want to have this conversation continue ongoing with SFMTA as well as with with the mayor uh and and mayor's office of housing and community development is this, that we could either receive a letter uh you know prior to Tuesday from SFMTA and from the mayor to commit with you know identifying additional like funding sources and ways and mechanism to uh have the reinforced podium and to fulfill its obligation of the additional uh 465 uh you know units total or whatever minus of the hundred something units that we're getting.

Um and to say that you know there that we're willing to explore uh you know mechanism that will create an economic engine on sites that provide maintenance, uh you know, support for the bus yard and all that.

Um that I will then work with our state attorney to draft a further resolve clause in the resolution indicating that the board supervisor urges the mayor at SFMTA to fulfill its their obligation and the vision of this project as intended as previously approved by the board of supervisors.

So I think there's two options.

Either we receive a letter uh or that I'm happy to draft, of course, in conversation with SFMTA draft a further resolve clause that we can make into the resolution um next week, Tuesday, colleagues, and uh that's uh that's kind of where I'm at.

Like and because I think we are all frustrated the fact that we're not develop the delivering more housing uh as we have intended.

Um so that's that's my my offer, and and but not that's not to do it for today.

Um we don't have the I I don't have the language and and I don't want to hold up the project, but I I hope to have it by Tuesday.

Vice Chair Dorsey.

Thank you, Chair Chan.

And at this time I would like to move two amendments, one offered by the SFMTA and the other recommended by our budget and legislative analyst, and I will read these into the record as follows.

On page 10, line six, adding whereas on March 9th, 2026, the planning department issued a memorandum to file, which found the development that with development of the housing project, the remaining sites identified in the 2022 housing element update are adequate to meet the requirements of California Government Code Section 65583.2, and to accommodate the city's share of the regional housing needs pursuant to California government code section 65584, period.

The board incorporates these findings as its own and incorporates the March 9th 2026 memorandum as though fully incorporated here in semicolon and then on page 12 at the recommendation of the budget and legislative analyst on page I'm sorry, line 18 striking an estimated, replacing that with the letter A, not to exceed amount, um, and then striking the uh end of that sentence from the the where it says and subject to adjustment on the terms of the project agreement striking that uh and that is the motion.

And then I'd like to uh move that we send this to the full board as amended with our positive recommendation.

Thank you.

Um Deputy City Attorney Brad Russian, the second amendment that Supervisor Dorsey proposed, the BLA's recommendation should also be reflected in the long title, just for clarity.

Thanks.

Thank you.

And so then with that, both uh amendments as indicated by Super Uh Vice Chair Dorsey, and in addition to what Deputy City Attorney Russi has added, which is with the long title and uh that motion and the roll call and send it to full board with recommendation and a roll call, please.

And on that motion by Vice Chair Dorsey, do we accept the amendments as so offered by the department and also accepting the BLA's recommendations?

And that we refer this resolution to the full board with recommendation as amended.

Vice Chair Dorsey.

Dorsey, I.

Member Cheryl.

Cheryl, I.

Chair Chan.

I.

We have three ayes.

The motion passes.

title and uh that motion and a roll call and send it to full board with recommendation and a roll call please and on that motion by vice chair dorsey do we accept the amendments as so offered by the department and also accepting the BLA's recommendations and that we refer this resolution to the full board with recommendation as amended vice chair dorsey Dorsey I member Cheryl Cheryl I Chair Chan aye we have three eyes the motion passes thank you and Mr Clark please um I uh I understand we have an interpreter that is gonna have to leave at noon and it looks like that there are actually uh individuals here to make public comments on item number one so could we uh recall item number one uh yes item number one items or I should say we refer back to it number one yes uh item number one again item number one is the ordinance amending the health and business and tax regulations codes uh as it uh as it relates to mobile food operations thank you and um I just want to make sure that we're not rescinding the votes but I want to just re reopen public comments for item number one so let's resend the vote in order to accept public comment yes understood uh colleagues my apologies I would like to resent the votes for item number one uh a roll call please or we could take that without judgment check out with without objection and we'll like to open public comments for item number one yes uh we are now reopening public comment for this item number one uh this ordinance regarding the health and business tax regulation codes as it uh relates to mobile food operations um I do understand we also have David Cruz from infographics here today if we could provide uh instructions on language that uh anyone who wishes to address as this committee uh to line up against those curtains and we'll have two minutes okay persona publicly for favor mark it those juntos van a tener un limite de dos minutos por persona gracias thank you much first speaker please thank you so much again for this opportunity um to the board here um the committee here um my name is Natalie Ortiz I am uh here as representing nuestra causa today um food vendors have been part of mission uh the mission's cultural and economic life for generations operating alongside merchandise vendors and other small street businesses the San Francisco Food Vendors Committee is a vendor led group of over sixty vendors in the mission district and assist organization for the mission street vendor association organized with the support of nuestra casa vendors and the food vendors committee are surf safe certified through mission language vocational school reflecting a shared commitment to food safety public health and professionalism a currently structured the as currently structured the ordinance risk pushing many existing food vendors out of legal operation so I just I want to say thank you again um for giving us this opportunity just want to uh uh sort of introduce the food vendor um committee of San Francisco um and again thank you for um hearing them out thank you much Natalie Ortiz next speaker um deas my name is Rosa del Consejo de Vendedora de Alimentos Provex wouldn't cumplice in este moment um I sufficient space for those significant sequel sin poder vendor is familiar okay thank you very much uh good morning my name is Rosa I'm a member of the food vendor committee of San Francisco and I want to say something very simple uh something about for us for in order for us to be able to do what we need to do is we need more spaces and there aren't enough and which that means that many of the food vendors won't be able to make sales won't be able to take money and take it home take it home thank you.

Thank you much Rosa next speaker please para todos saludarles Dailis Pérez is member of the committee de vended ambulantes de la mission street 24 visita junto con nuestros compañeros is para que nos dejen un poquito las ideas claras ya que nosotros como equipo emota la ley nos affectan pero también este accepta estas legislativas ya que se nos hace difficile in principio este nuestra secundaria motivado que este es el sustento de nuestra familias muchas gracias so good morning my name is Dallas I'm also part of the committee uh of of Street twenty four and the just like my colleagues the reason of we that we're here as a team is because we've been trying to follow the rules that affect us and but also to accept them positively with your support.

Okay.

So good morning.

My name is Dallas.

I'm also part of the committee of Street 24.

And the just like my colleagues, the reason of we that we're here as a team is because we've been trying to follow the rules that affect us and but also to accept them positively with your support.

However, it's been very it's been hard, and at the beginning we were told that because this is our second time, our first time we were told that the that the rule was going to go under revision, and now we are told that it's gonna carry on.

We are worried because this is the way that we support that we support our families.

We're ready to work and to create a system, but in a way that allows us to continue the rule as it stands, it should be stopped.

Thank you much.

Next speaker.

Hi.

My name is Magdalena, and I'm member of the Consejo de Vendedor de Aliment.

Necessitation for vendor legally.

Hello, my name is Magdalena.

I'm also a member of the Food Vendor Committee.

Thank you.

Thank you much, MacDalag.

Next speaker.

Miko no staff añadido as a poco.

It's the camera that has possible el complement normativo.

Other conditions are implementado.

Existen because the reconocle that the peculiar vendors have a form realista to operate in manner segurable and acceptance.

Gracias por su tiempo and Hello, my name is Andrea.

I'm also a member of the committee.

Um I want to say that we want to comply with the law and we want to do it properly, but the policy is moving forward without the Migo program.

We must say we must buy our uh we must buy what we need at the warehouses where the cost can be higher than what we earn.

The difference between the which it marks the makes the difference between staying in business or being out of business.

Other counties have implemented the program because they see the need that the they see the need that we need to operate, and without it it doesn't match our reality.

We're asking to increase what's already there, and we're asking for this to not advance until that's included.

Thank you.

Next speaker.

Thank you much, Mr.

Romero.

Next speaker.

Thank you.

Thank you much, Margaret Deludress.

Next speaker.

Thank you.

Thank you, Gabriela.

Next speaker.

Hola, my name is Cecilia and so I am member of the Consejo of Vendedores de Alimentos.

Preparamos para los cambios and avancara as the complement.

But since mechanisms of protection or the transaction, the providers call the riesgo to serve replacements at cumplir contivas.

Hello, my name is Cecilia.

I'm also a member of the committee.

Okay, good morning.

My name is Jesenia.

I'm also part of the of the co of the vendor committee.

But we're here but in order for us to do this, we're asking you to stop this until the support is given to do so.

Thank you.

And thank you, Jessenia.

Next speaker.

Good morning, my name is Martha.

I'm also part of the food vendors committee.

With the Migo Law, it can the Migo Law can help us a lot.

Thank you.

And thank you for your comments, Martha.

Next speaker.

Thank you very much.

Even if we comply with the rules, there aren't enough spaces.

This cannot move forward without talking about the spaces.

Thank you.

Thank you for addressing this committee Carmen.

Next speaker.

And thank you, Baddy.

Next speaker.

Esto no debería seguir adelante hasta que esos mechanismos.

Gracias.

Good morning, my name is Sandra Montoya.

I'm also part of the food vendors committee.

We wanna comply with the law, but we need realistic mechanisms.

This cannot move forward until these realistic mechanisms are established.

Thank you.

And thank you, Sandra Matoya.

Next speaker.

Gracias.

Good morning.

My name is Marta.

I'm also part of the food vendors committee.

Um I am in support of food safety, however, without ruining ourselves trying to comply with the rules.

This needs to be solved before you can move forward.

Thank you.

Thank you much, Martha.

Next speaker.

Thank you.

Good morning, supervisors.

Um my name is Layla Ovando.

I am the director of access food access and equity with Vesra Causa.

Um, I was also the chef instructor that um that got the food safety certifications for our food vendors.

And um I'm just here today.

You guys have heard um from our dozens of vendors, you've heard about the costs, you've heard about the commissary uh expenses, you've heard about the lack of space, and you've also heard time and time again about Miko.

Um this is not a lack of understanding, it is not confusion.

This is alignment and vendors are clearly telling you what they need to comply.

And it what's most important is that there's not it's not an additional request.

Um they are there are pathways that make compliance possible, but without Miko, without financial support, they cannot purchase these compliant carts.

And that's what we're trying to make sure.

Um without access to space, they cannot operate legally without safe harbor, they risk being penalized while trying to transition.

I don't know if you guys have seen, but it is kind of violent the videos that um are coming out the way the hot dog vendors are being treated on the street.

And I do not I'm we are all fearful of that violence translating over to our vendors once this passes out.

Um if this does pass without these reforms.

Um so this is uh we want to be very clear.

We are not here to stop the policy, we are here to ensure that it moves forward.

It actually works for the people it is intended to serve.

So we're asked it is simple to and it is direct.

We are asking to this point to not move forward until the core pathways that make compliance possible are included.

And I ask in this body directly for the record.

Uh, will you commit to ensuring that Miko financial support, access to space, and transition protections are included before this moves forward?

Thank you.

Thank you much, Layla, for your comments.

And if we have no further speakers regarding this item, one mr.

You always taxing people who don't have nothing to do with the multi-million dollar negative cash flow of the city and county of San Francisco.

For example, this week, this time frame, I want to go rent a U-Haul truck to move my property.

And as a result, I did the math and the math from the employee from the U-Haul company.

Numbers were higher than the numbers that I calculated to rent the U-Hall van.

Come to find out that his numbers were higher because I have to pay taxes on health care for the city and county of San Francisco.

I didn't come down to a U-Haul company to rent a truck to pay health care for the city and county of San Francisco.

You're in a multi-million dollar negative cash flow pertaining to health care because you put people on a health care program that's not eligible pertaining to state law and federal law, medical and medicare.

Now it's backfired on you.

Now you're doing the same thing by putting a tax on the most vulnerable people who are trying to keep the head afloat by selling their goods to the public.

Furthermore, you sit up there and have a problem with Muni Railway, 1,500,000 dollars in debt, and then you have the most money making revenue of the day of the year with the Chinese and Japanese New Year's, and you could balance out the negative cash flow that Muni has by charging each and every person that uses the Muni Railway and Muni Metro system that travels to the Chinese parade in New Year's Eve.

And you could balance out the negative cash flow that Muni has by charging each and every person that uses the Muni Railway and Muni Metro system that travels to the Chinese parade in New Year's Eve.

You further blow that opportunity by letting every passenger why for free.

That's disgusting.

Whose idea was that?

You're not even a citizen.

Speaker's time.

Speaker's time has expired.

And again, friendly reminder, we are taking public comment on this ordinance regarding the health and business tax regulation codes as it refers to the mobile food facility permit.

And if we have any further speakers after this gentleman, we will be closing public comment after the speaker.

Otherwise, please line up along the curtains.

And with that, please.

Aye.

Listening, it sounds like the issue is more so uh welcoming uh future of independent agencies in San Francisco, and that they might not mind they don't need a committee.

Uh they need uh an agency, some kind of uh body recognized at uh uh nine county level and then a scentivization program to get out of San Francisco, probably get out of their heads too in the process.

Uh and then uh San Francisco would tax the agency top down instead of individual food vendors.

I could write that and send it to you.

Comments, are you done with your comments?

That is complete.

Yes.

Okay.

And with that, Madam Chair, we have no more speakers.

Seeing no more public comments, public comment is now closed.

Uh colleagues, we had already adjudicated this uh item earlier, and what we have decided that we understand while we understand that there's more work to be done, uh, we are moving forward uh with this part of this legislation and the way that we're um finding the best solution to do so without because there's also other parts of this very legislation that we really need to move forward that impact food trucks and other, and therefore we duplicated the file and move uh and move the duplicate duplicated file.

We move the original file as amended to the food board with recommendation, and then that the duplicated file was continued to the call chair, which allows Supervisor Jackie Fielder and others that may be able to make amendments to it, uh hopefully before before the uh passage of the file, um the original file, uh, or then Supervisor Jackie Fielder can always um along with the community to work trailing legislation to provide the uh meco, uh which is the Michael Kitchen uh legislation.

And so with that, uh I move to as indicated, duplicate a file and move.

Um actually, Madam Chair, uh we only rescinded the vote to refer to the full board.

We'll just need to take that.

Sounds good.

Then we move to move the original file as amended to full board with recommendation and a roll call, please.

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

Vice Chair Dorsey.

Dorsey, I.

Members uh member Cheryl.

Cheryl, I, Chair Chan.

Aye.

Chan, I.

We have three ayes.

The motion passes.

And with that, Mr.

Clark, please call item number eight.

Yes, item number eight.

Apologies.

Item number eight as an ordinance de-appropriating approximately thirty-four point three million from permanent premium and comtime salaries, and appropriating approximately 34.3 million to overtime salaries in the police department to support the department's projected increases in overtime has acquired per the administrative code in fiscal year 2025 to 2026.

Madam Chair.

Thank you.

And today we have the police department here.

Okay.

Um good morning, Chair Chan, Vice Chair Dorsey, and Supervisor Cheryl.

I am the Chief Financial Officer, Kimmy Wu from the San Francisco Police Department.

And today I'm joined with the Deputy Chief of Field Operations Bureau, Scott Biggs, and from the Airport Bureau, D.C.

Jackson and Captain Kiro.

Um, today we are here to respectfully request to de-appropriate $34 million in savings to overtime and request to release all $537,000 for overtime held in reserve.

And your approval will only affect the spending within our approved budget.

This graph here on our city sworn staffing levels shows uh over the past eight years since 2018, and the data is shown for December of each respective year.

There are over 600 officers short compared to the current recommended total of 2,257.

Currently we have 1,588 full duties in the city as of March 2026.

And our staffing shortage is no longer on the decline since 2019, and we are now seeing an increase in the number of sworn members.

The general fund overtime versus staffing is shown here.

And the spending from fiscal year 2017 to 2018 to the current year.

The line represents the city's full duty sworn, and the SFPD's annual appropriation for overtime budget is listed at the top.

In the next three slides, I will show the projected overtime budget based on the pay period ending February 27th.

And for the city general fund 28.5 million is deappropriated from our salary savings and general fund added to the original budget of the $72 million.

The total revised appropriation is $100 million.

And for the airport bureau, they are projecting overtime at $15 million with an original budget of $10 million, and the projected deficit is $5 million, shown here.

So the total revised general fund appropriation is $100 million for the city and $15.8 million for the airport bureau.

For the city, the revised appropriation and overtime of $100 million is based on, again, the pay period ending February 27th.

And not shown here is the additional $537,000 that is held in reserve.

And we would like to request for the approval to release the full amount, bringing the revised total to $100.5 million.

And for the airport, the de-appropriation is $5.8 million from salary savings, and therefore it includes the contingency amount of $773,000.

And this concludes my presentation, and we can answer any questions you may have.

Item eight is an appropriation ordinance that deappropriates $34.4 million from salary accounts in the police department, both in the general fund and in the airport fund, and then increases appropriation authority and overtime accounts in both those funds.

You can see that $28.5 million is shifting in the general fund and $5.8 million is shifting in the airport fund.

And then you can see on page 30 uh the overtime hours that uh this translates to.

Uh you can see also that the police are projecting to deliver in the city about 717,000 overtime hours this year.

There's an ongoing decrease from prior years, two years ago.

They were doing eight over 800,000 hours of overtime per year.

Uh and then on page uh 31 of the report, you can also see that this is essentially a budget neutral appropriation.

It's just shifting spending authority within the police budget.

It does not require drawing on uh the budget reserves to fund these new overtime costs.

Um just kind of zooming out a little bit.

The police uh head count for office for sworn officers in the city has increased by about 60 people relative to the headcount this time last year.

Looking at the separation data and hiring data during this fiscal year, however, they're basically are kind of a wash, right?

So this high level of overtime I think will be sustained in future years.

So they've been able to bring it down.

A lot of the decrease this year is actually starting as of a couple weeks ago.

The police have ordered a 20% decrease in overtime for the remainder of the fiscal year to avoid having to draw on the budget reserves.

And I'm expecting that they'll be doing that going forward.

But we do recommend approval by debate.

So the the decrease in overtime this year, they were on track to spend about 760,000 hours of overtime this year.

That would have required at that spend rate would have required drawing on the city's budget reserve.

So they've ordered a decrease in overtime by about 20 percent for the remainder of the fiscal year to remain within remember remain within their budget.

Well, I mean, I think that uh by comparison, clearly what it's indicated in the budget legislative analysts is that you know, in the previous three fiscal years ago uh was that you know the department overspends by 25 million dollars and which it had to come to or 27 something million dollars and have to come to the board of supervisor for a mid-year supplemental that dip into the city's general reserve.

And since then, I think that not only that we have work to make sure with the controller's office to have a quarterly monitor, which you have been meeting the uh obligation uh to really to also during especially during last year's budget, you have budgeted and fulfilled the obligation, and thank you for that work.

Um I do believe though, and correct me if I'm wrong, I think last year for your budget though, it was either 30 or 31 million budgeted for overtime.

Um that I think but you're able even within that frame right now for you to come to us is still neutral because you were able to identify not just beyond what you have budgeted, you actually are able to find savings somewhere else to augment the overtime spending.

Is that correct?

Yes, that is correct.

So last year our overtime appropriation was approximately 41 million.

And so we did uh move vacancy savings from our salaries to overtime, and that was only within the city.

Yeah.

So thank you.

Good job.

Like because I think that uh uh ultimately what we really wanted to see is that you work within the budget.

You know, I I think that how you actually find saving to be able to opt and fund.

Um that's of course uh up to you as a department.

Uh and what we are looking for and along with the controller is that you work within your budget.

Uh I have uh additional question that uh you, along with other city departments, you were not alone in this um few weeks ago, came to the board, I believe was um in actually March.

Uh that was for another reserve for 4 million.

But I maybe you were not part of it.

How many understand?

Or was it just the Department of Emergency Management and HRC that is specifically for um street cleaning and and Super Bowls and that SFPD was not part of the four million?

So uh you are correct in March, the they had requested a supplemental under DEM, mayor's office for four million.

A portion of that um has should potentially come to the police department for the street conditions as well as non-personnel cost related to you know leading up to the Super Bowl and for lunar year.

Any chance you could remind me or that you know on top of your head, because I'm trying to look at the documents and I can't quite see it, is uh how much it is that actually is out of that four million went to SFD.

Um at this moment I don't have a final confirmed amount yet, but a good portion uh would potentially come to the police department.

Yes.

That that went to the police department of that four million.

Yes.

Correct.

But the final amount has not been confirmed yet.

No problem.

Um I I think ultimately that's my question for SFD.

You know, I I think uh I think your apps by scale, you are much better off uh than where you were uh three fiscal years ago.

So thank you so much for that work.

Um I think that you are still not quite there yet in a sense where clearly, you know, there's a supplemental for the four million dollars, a good portion still goes to SFPD, but from what I understand the mayor wants to maintain that level of service.

Um, and now that the third 34 million dollars again, while within your department spending, um we also know now that there's a new contract for officers uh that's coming through.

So help me better understand that what is your strategy in the upcoming you know, budget conversation and that you're going to maintain the overtime uh and maintain staffing and maintain, but also meet the new mandates that you will now encounter by your contract.

So I would um say that we are, you know, in our third fiscal year of reducing our overtime, um, which is primarily an overtime backfill minimum staffing.

We have a new dashboard that is monitored daily and updated, showing where we are within uh the allotted overtime that is planned, and so that gives us you know accurate monitoring and to make sure we adjust where needed to stay within budget.

Um as well as um our academy recruits, um we have a larger graduation rate and our applications have increased um to the highest level.

Last year we had over 5,000 applications, and so it will take time from those for them to go through the process to then you know increase further in this upcoming year with the staffing situation.

What I also am curious about, and that you know, I had this conversation with the city administrator, um, but I look forward to having this with you as well.

Is then you know, I I think that part of um and I look forward to seeing how you want to manage that in this upcoming fiscal year, is also really the capital management's assets managements for SFD, and that's ranging various from you know your uh real-time invested crime investigation center, like both in lease and long-term maintenance, your investigation units, uh your police station upgrades, as well as your fleet upgrades, like what is your plan for all these things?

And what because meanwhile, you're also taking on new tasks.

Your new tasks are equipments like the drones, your equipments like automated license plate reader.

And it seems to me though, like at some point you will face uh a question about asset management all across, be it from your equipment um all the way to your assets like properties.

And so do you now have a team to actually manage this variety of it?

Because again, you're under staff, so yes, so in the coming months, you know, we are reviewing that closely.

Um, but as for the Arctic, we do have a lease that is through the end of the year.

Um our services have also for the non-personnel is funded already through philanthropic funds.

Um for vehicles, we have received a airmark for you know motorcycles potentially, um, but for our fleet, over a million dollars.

So we have other sources that we are relying on to help with that, as well as the uh ECER bond for uh upcoming Terravel station, which is uh coming up.

So these are all things that are in discussion and we are monitoring.

Yeah, I think what I'm gonna look for similarly to what I'm gonna look for all city departments, and that's inclusive of the fire department as well.

Um, and and that I'm I'm going to ask everyone is to start to demonstrate in their budget, not just for what is in the budget that is proposed, but it's actually a projection of uh secession plan and like assets management plan um that you will have.

Um both when I say you know, secession plan, I guess it's really inclusive of recruitments, inclusive personnel, um, and then as well as your assets management for the long term, like things that I know that they don't happen overnight.

Very same thing, similar to fire department, that the apparatus clearly are very old and they need to replace them.

And I like to see a plan that how do you replace them and update them without knowing that you're we are in in a significant deficit.

Uh, what I also am looking for in this upcoming budget is to see that there is a approach and a vision articulated in uh by Chief or whoever he destinated to articulate and presents is the idea about staffing uh adjustments, like because another staffing report, I think it should be already in progress, and balance it out with technology that could be made available to us.

Again I appreciate the fact that this is again within your spending um but I I don't think we're there yet um completely um about your overtime spending um so I look forward to another strat like continue on like furthering strategy knowing that you have more that are now layering in but it's very impressive um I really appreciate your work.

Thank you.

Let's go to public comment on this item.

Guess we are now opening public comment on this item number eight if we have any members of the public who wish to address this committee.

I want to be cautious of you taking money away from prospects that graduate from the academy and shift it over to overtime if it ain't broke don't fix it.

Because what happened when all those graduate and pass the test to become officers in the city and county of San Francisco you won't have funds.

Then you're gonna have to shift funds back and that's going to create a problem in hiring the new recruits you focus on managing money to the penny on some areas then you turn around and flip flop and waste multi-millions of dollars in other areas and then you laugh like it's nothing it's called being a hypocrite it's disgusting.

It's the same way with the treatment in your budget pertaining to the most economically disadvantaged people that are homeless out in the street with a combination of both mental and physical disabilities and a drug addiction problem.

Newsom giving the mayor $7 million that's coming from the Trump administration and claim that they're using that for bears to rehab people who have addiction but nothing about the $250 million that's missing that's supposed to be for the homeless people that gavin goddamn newsome can't even locate.

Where is that money at?

Why don't you focus in on getting money that's already been granted that should be used and wouldn't create these type of problems in the first place.

It's disgusting I shouldn't have to drop what I'm doing to come up here to sh pinpoint a negative cash flow of multi-millions of dollars and then you mess with people who don't have nothing to do with the problem is very bad and it's disgusting.

Thank you much for your comments see no further speakers Madam Chair that completes our queue.

See no more public comments public comment is now closed I don't see any other questions so colleagues I will move this forward to full board with recommendation a roll call please.

And on that motion that we refer this ordinance to the full board with recommendations.

Dorsey aye member Cheryl Cheryl I Chair Chan.

Chan I we have three ayes the motion passes and Mr Clark do we have any other items before us today?

Madam Chair to conclude business one one second uh excuse me the the release of reserve is not in this ordinance before uh before the budget legislative analyst the motion that must be I yeah uh we must present that motion let's uh resent the motion with no objection and I would like to make the motion to release uh right like is that what we're doing I'm not sure I think we need to amend the ordinance to actually add language or hold or hold a hearing next week or at another time to release the reserve because it's not in the legislation now and it I don't think it can just be done verbally.

I'm sorry what are we exactly uh talking about like about the results so there's two things happening or there's two things the police department wants they want to change the spending authority within their budget to accommodate additional overtime spending.

There's also a committee reserve that was placed on a portion of their overtime of about half a million dollars during the budget process last year.

That is a separate action that the that the committee needs to take it not in here.

It's not in the ordinance right now.

Sorry, go ahead.

How long would it take for us if we were to go in recess?

How long would it take for you to come out the language?

Like ten minutes?

Awesome.

Thank you.

So colleagues, if it's okay, let's return at twelve thirty-five.

Thank you.

And we're returning from recess for item number eight.

And thank you so much for everybody's patience, and I really appreciate uh sounds like what through council uh and through everyone that what we have decided and in agreement with the San Francisco police department is that we will move this item forward uh as as it currently is, and then that the department will then return uh at a separate time to submit a letter to request to release the remaining reserve uh and for a separate hearing at a later time, um, so that we can move forward with the spending and I should say the appropriation uh of this funding.

So with that, uh, I would like to make the motion to move this item to a full board with recommendation uh and a roll call, please.

I member Cheryl.

Chan, I we have three eyes.

The motion passes.

If you can get that ready.