Good morning.

The meeting will come to order.

Welcome to the May 6th, 2026 meeting of the Budget and Finance Committee.

I am Supervisor Connie Chan, Chair of the Committee.

I'm joined by Vice Chair, Supervisor Dorsey, and Supervisor Sauter.

Our clerk, it's Brent Halipa.

I would like to thank um Janet uh from SFGov 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, it should be submitted to myself, the clerk.

Public comment will be taken on each item on this agenda.

When your item of interest comes up and public comment is called, please line up to speak on the west side of the chamber to your right, my left along those curtains.

And while not required to provide public comment, we do invite you to fill out a comment card and leave them on the 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.j.

Sf G-O-V dot or G.

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

Uh you may also send your written comments by U.S.

Postal Service to our office in City Hall at one Dr.

Carlton Big of the Place.

Room 244, San Francisco, California, 94102.

And finally, items acted upon today are expected to appear on the Board of Supervisors Agenda of May 12th, unless otherwise stated.

Madam Chair.

Thank you, Mr.

Clerk.

And I also want to acknowledge uh Supervisor Mayor Namalgar for joining us at this committee today.

Um so before we do call item number one, I want to make sure that I remind the public that we have budget and legislative analyst reports for items two, three, five, and nine through thirteen on today's agenda.

And so for those items, we will have the department presentation first, followed by the budget and legislative analyst, and then we will take questions from this body, and then we will go to public comment.

So with that, Mr.

Clark, please call item number one.

Yes, item number one is a resolution authorizing the executive director of the department of emergency management, controller, and deputy controller as agents to act on behalf of the city and county for all matters pertaining to state and federal disaster and emergency assistance funding, and to provide the assurances and agreements required by the Governor's Office of Emergency Services.

Madam Chair.

Thank you.

Yes, hello, good morning.

Uh, Mark McLean from the Office of the Controller.

Just here to answer any questions about this.

If you have it briefly, it's uh something that Cal OES requires that every three years we submit this resolution along with uh a form 130, designating who the authorized agents are for the city who can receive public assistance, state or federal public assistance.

As you can see in the committee packet, we've done this in 2013, 2016, 2019, 2023.

So it's just a perfunctory kind of uh reauthorization of those three individuals, the controller, deputy controller, and the director of DEM.

We appreciate you.

We know that it's been challenging, especially for the last um year and a half uh with the federal government uh along with our FEMA reimbursements, uh, both making sure that we retain what we already received, but also being able to move forward.

So thank you so much for your work.

And with that, let's go to P.

I don't see any name on the roster.

Let's go to public comment on this item.

Just right now opening public comment for this item number one.

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

Seeing no public comments, public comment is now closed.

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

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

Vice Chair Dorsey, Dorsey, aye.

Member Sauter Sauter, aye, Chair Chan.

Aye.

Chan, I, we have three ayes.

The motion passes.

Thank you.

And with that, Mr.

Clerk, please call items two and three together.

Yes, item numbers two and three is an ordinance and resolution regarding the following between the recreation and park department and the San Francisco Zoological Society.

Item number two, do you appropriate 2.5 million of open space acquisition funding and appropriating 2.5 million in the recreation and park department for a loan uh to the San Francisco Zoological Society in fiscal year 2025 and 2026, and item number three is a resolution that authorizes uh the rec uh recreation and park department to enter into an uh an agreement to loan up to 8.5 million to the San Francisco Zoological Society to support the operations and long-term financial sustainability of the San Francisco Zoo.

Contingent on various milestones and terms and conditions effective upon approval of this resolution to be repaid over 10 years in the form of deductions from the SFZS management fee, allowing for the city to terminate the lease and management agreement with the SFZS.

In the event the loan is not timely repaid, or if the conditions in the loan agreement are otherwise not met and authorizing the recreational park department general manager to enter into amendments or modifications to the loan agreement that do not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the permit or this resolution.

Madam Chair.

Thank you, Mr.

Clerk.

And before I call on Supervisor Malgar, who who has been, I just want to express my gratitude to Supervisor Malgar for first um initiated the audit for SF Zoo and has been ushering the process to where we are today to be able to really have the loan agreement that is before us, as well as with the understanding that we're going to appropriate this money uh for the zoo.

Um and I just want to express my gratitude to you, Supervisor Malgar, but also um the new leadership uh at SF Zoo as well as Reckham Park and the workers at SF Zoo all came together in in a collaborative manner to really make sure that not only that we have a San Francisco Zoo, but I think that to understand the impact to workers, to the animals, and to the neighborhood surrounding the zoo.

So with that, Supervisor Malgar.

Thank you, Chair Chan.

I also want to uh express my gratitude to you in particular, Chair Chan, for the many hours that you have spent engaging on this topic with me uh and with the leadership, also with um, you know, the the work and time that you have spent on the relationships.

I very much appreciate it as the zoo is such an important institution.

Um I also want to uh thank the leadership at the Rec Parks uh Department and uh our city uh controller and budget and legislative analyst for all the work that they have done.

They've done a very heavy lift here.

Um, and of course, uh the workers at the zoo and the new leadership on the board of the zoo.

Thank you so much for everything you've done, and particularly to Cassandra Costello who has taken this on.

So thank you so much.

Um I will uh just start us off uh with this hearing.

Uh the San Francisco Zoo and Gardens is, of course, in District 7, and its mission is to connect all people with wildlife, inspiring care for nature in advanced conservation access in advanced conservation action.

The institution aims to foster a connection with nature through education, recreation, and direct conservation efforts while providing care for over 2,000 exotic, endangered and rescued animals.

The zoo is a unique partners in San Francisco with a special relationship that is almost a hundred years old.

Uh my kids went to zoo camp all through their childhood, and I know uh all of us have had uh really wonderful memories at this amazing place.

Uh the relationship right now needs to be made strong again.

In part, we have a BLA report.

We project that if the uh San Francisco Zoological Society were no longer able to manage and operate the zoo, the city would incur costs of between 42 million and 65 million over the next three years.

And these are expenses that we have not planned for, we have not budgeted for, and most importantly, we have not been deliberate about.

We have a performance and management audit of the San Francisco Zoo.

Uh as you may remember, I requested this uh over a year ago.

Uh, under former leadership, it was slow going, but under the new leadership, we were able to finish that pretty expeditiously.

So I want to very much thank the team at the BLA.

Dan Gosher, thank you so much for your leadership on this and for everything that you have done.

It was a heavy, heavy lift.

The performance audit contains 11 findings and 49 recommendations, of which 37 are directed to the San Francisco Zoological Society.

Nine are directed to the recreation and parks department, and one is directed at us colleagues, the Board of Supervisors.

One is directed to the Recreation and Parks Commission, and one is directed to the Office of Resilience and Capital Planning.

So this is a team effort that we must rebuild with the zoo.

The zoo and the recpark have accepted those findings.

It is not a small task for either agency.

There is a long list of milestones that the department and the zoo must meet.

One, engage a specialized zoo strategic and financial planning consultant, produce a financial feasibility plan to become a long-term financially solvent organization, make immediate meaningful reductions to expenses to a minimum of 10%, not take on new liabilities or animals except for the giant pandas, because we made that commitment, or except in cases of newly acquired animals that do not require capital habitat investments or additional staffing resources unless a dedicated outside funding source has been secured by the zoo until the zoo is determined financially sustainable by the city controller.

Produce a five-year strategic plan that aligns with a financial sustainability plan and includes priorities, objectives, and tactics.

The plan should also identify metrics that will show progress towards these priorities.

Participate in a long-term visioning process with city staff and other partners to determine the zoo's long-term strategic direction because it lives in an ecosystem with the city in everything that we do.

Develop a board with a capacity to meaningfully support the San Francisco Zoological Society, doubling its annual contribution goal year to year until reaching a contribution goal of 10% of the zoo's annual operating budget and ensure that its finance committee is adequately staffed.

On a quarterly basis, report on basic output, such as attendance, expense reductions and efficiencies, new members, and funds raised, as well as under progress towards long-term financial solvency plan and progress on the PANA project.

On a quarterly basis, reports should be shared with the city controller, presented before the joint zoo committee, and all reports and materials provided be by the zoo must meet standards of quality and thoroughness as determined by the city controller.

Also add a board member with extensive financial management experience, including deep knowledge of finance, financial controls, and financial planning.

This individual should have experience in analysis, risk management, and financial strategy, and the city will review the qualifications of the board member to ensure that the experience is sufficiently met.

Also achieve uh accreditation again by the association of zoo and aquariums, AZA.

Address concerns identified in the upcoming budget and legislative analyst audit and consistently meet with and communicate with city partners as required.

We do have a new executive director, Cassandra Costello, who is just a breath of fresh air.

She has been in leadership roles with the city, with the Rec Parks Department, and with SF Travel.

She knows everyone and everything, so we are very grateful that she wanted to step into this role.

Um, we can see the light at the end of the tunnel here.

Uh, and we have to walk hand in hand with the zoo.

We cannot be hands-off in this relationship.

Uh, we must partner together to make sure that we are successful.

Um, I would like us to hear first, Madam Chair, from the department, um, rec parks department, our interim uh director, Sarah Madeline, to give us a description of the plan uh that has been worked out between her staff in the zoo in collaboration with the mayor's office, the mayor's budget office, and the controller.

Um so I don't know which one of you, but I would welcome that.

Thank you.

Thank you, Supervisor.

Um, and good morning, members of the committee.

Uh, my name is Sarah Madeline.

I'm the interim general manager of the recreation and parks department.

And before I dive in, I just want to thank uh Supervisor Melgore so much for her leadership on this issue.

Uh we are in a good place now in large part because of your work, and and also extend that same thanks to Cassandra.

Appreciate it.

Uh, some of what I have in our presentation, uh, the supervisor already uh spoke to in terms of the loan terms, so I will um skip over some aspects of it.

Um, so just for some brief background, uh, the city owns the grounds, facilities, and animals at the zoo, they're under the jurisdiction of the recreation and parks department.

Um, operations at the zoo have been managed by the San Francisco Zoological Society under a lease and management agreement since 1993.

Uh, as part of our budget that you guys see every year, you see we transfer a $4 million management fee to the zoological society for them to manage all the operations and employees.

And our commission reviews uh certain minimal matters, including uh admissions fees, we get presented a budget not for approval, just for information, and all the animal transactions go through our joint zoo committee and then to our commission.

Uh, I think Cassandra will speak about this uh a little bit later, but we are in this position because of some significant challenges uh that the zoo faces in terms of both their costs and their revenues.

Like many of us, they face increasing costs, and post-COVID really have not recovered from the declining revenues, and I know Cassandra will speak about that more.

Um, as the supervisor briefly outlined, we are proposing a loan to the zoo of up to 8.5 million dollars.

Um, there will be four payments commencing if this is approved, and then throughout the next fiscal year, a totaling 6.5 million.

We're going to propose to keep $2 million on reserve for in case the milestones, in case the zoo is progressing towards their milestones that are outlined in the terms, but they have not yet fully accomplished them and need a little bit more to get there.

Um, and we anticipate those general fund the general fund support for loan payments through the mayor's office.

The remaining of those payments will be in our budget.

So, as you see today, you have uh a de-appropriation and appropriation for the first payment, and then if this is approved, uh future payments would be included in our budget submission that goes to you all from the mayor on June 1st.

Um, and as I just mentioned, the deappropriation is what is in front of you today.

Um, as the supervisor outlined, the loan disbursement is tied to specific conditions and milestones, um, including the financial sustainability and master plan that the supervisor talked about, um, and these immediate expense reductions.

We expect the the zoo on a quarterly basis to report to uh the joint zoo committee of our commission that is jointly managed with the zoological society on their progress towards all of these milestones.

One of the challenges in the past has really been a lack of visibility into zoo budget and operations, and so this was instilled in the loan as a way to ensure uh sunshine across that for all of us uh participating in the loan.

Um, and then the repayment schedule um is proposed to start in the first quarter of 2028, and the proposal is that the zoo will repay the loan over 10 years, but it will be repaid in the form of decreasing management fee payments.

And so our ask of you all today is to both approve the ordinance, which allows for the first tranche of loan dollars to go to the suit to the zoo.

And also by resolution, approve the terms of the loan agreement.

Thank you very much.

And we are obviously here for any questions.

Thank you, interim director at Madeline.

Through the chair, there's a couple people that I didn't think and really should be given special thanks.

Of course, that's at Lyndon Barry at the BLA who took over the audit while Dan was out on parental leave.

So thank you so much for your amazing work.

And also Veronica Bell, who is no longer on the Zoo board but has done so much work as a volunteer to help support our efforts.

So thank you so much.

Thank you.

Just a quick question for Rick Park.

In terms of the deappropriation from the open space acquisition fund, can you share, you know, if that.

I understand you're you're expecting that to be replenished through the general fund.

But if that were not to be the case, are there any projects in the pipeline in terms of open space acquisition that would be threatened with this moving of funds?

Thank you for the question, Supervisor.

No, we specifically chose this source because we currently have a balance of 14 million dollars in the open space acquisition fund.

The acquisitions that you are aware of that we are trying to complete would not be affected uh by this loan.

Um, and any future acquisitions that we are preparing for, the dollars would be restored to that source before we would move on any of those things.

So we felt very comfortable that this would not affect any anything in the pipeline.

Thank you.

You should we go up?

Yes, SF Zoo, please.

Good morning, supervisors, Chair Chan, budget and finance committee members, Sorizer Melgar, members of the public, my new friends at the budget analyst office, Dan and Lyndon.

We spent a lot of time together over the last uh several months.

So thank you for all your work.

Um, happy to be here today.

My name's Cassandra Costello, the newly appointed CEO of the San Francisco Zoo and Gardens.

And frankly, we're really grateful to be here today and this partnership with the recreational park department.

Thank you to Sarah Madeline, Yael, and Tonio Beverly for all your help over the last several months and working in collaboration with us to get to this point today.

There's been a lot of hours and lots and lots of time spent uh with your staff supervisor melgar with uh Mike Farah as well.

I would be remiss if I didn't give him and Jen a shout out as well.

Um I will go through um some what was that?

Okay, we're um she's just Nancy Chan here has also been great help here from the zoo.

She's been with the zoo for a long time.

This morning I wanted to go through some um information that is uh pertinent to the loan terms that were outlined by Supervisor Melgar and recreational park department, and I will go into some of our financials and be happy to answer any questions.

If we can have the screen here.

There you go.

Perfect.

Okay, we are approaching our centennial.

What a great time to be here at the zoo and to be launching all of these new initiatives to be thinking about what our strategic and business and master plan can be to launch us to the next hundred years of service to the public.

Really exciting time.

We are home to nearly 1500 exotic endangered and rescued animals, representing more than 225 species.

We have seven distinct gardens.

Our name says it all, the San Francisco Zoo and Gardens Gardens can't, you know, I don't want to miss giving our horticulture team a big shout out for all the work that they do.

We have over 30 board members and also 50 emeritus members.

We have the pleasure of employing 180 really hardworking expert professionals, and we have hundreds of volunteers, including a hundred docent.

I was just at their graduation last Sunday.

They train for over 66 hours just to volunteer to spread the word of conservation on the floor of the zoo and gardens.

I'll skip over the who we are.

I think Supervisor, you covered it very well with our mission.

Before I get into the meat of the presentation, I want to talk a little bit about how proud we are to provide access to people coming to the zoo.

We never want cost to be a barrier of entry to connect to our mission.

We continue our San Francisco free admission every Wednesday, first Wednesday of the month.

We relaunched our participation in the museums for all program.

We continue our participation in Discover and Go.

We are proud to be a host to free field trips for every San Francisco Unified School District student.

We also have discounted field trips for students outside of the district as well as discounted admission fees for residents and seniors.

We also have over 14,000 members, almost half of which who are live in the city and county of San Francisco.

We started to do new things.

One is to increase access, and the other, of course, is increase attendance and revenue.

We'll talk a little bit more about that, but I want to highlight some of the work that we've done and some of the new things we're trying.

In January, we did a kids' free month.

That resulted in our highest month of attendance ever recorded in a January for the San Francisco Zoo and Gardens.

In February, we had promotions that we rolled out around President's Day, and we also offered free student admission during the teacher's strike.

In March, we had our buy one get one for any student, regardless of which institution, and that was very successful.

And this Mother's Day, regardless of if you're a parent or not, you can come to the zoo for five dollars.

And in June, we're kicking off the summer with kids' free weekdays.

An area that I want to talk about is our volunteer and education programs.

I don't feel like we get enough light on the amazing work that our team does.

We have paid internships and we partner with a number of nonprofit organizations.

We also host about 60 to 17 volunteers at the zoo every year.

In addition to our nature trail program, which targets kids age 12 to 14.

I know in the audience we actually have some nature trail graduates, and maybe some of you are as well.

This is the 50th year of this dynamic program.

We also have a dozens and dozens of other volunteers from our conservation children's zoo, Insect Zoo, and beyond.

Other education programs.

If you had kids in the city, chances are they went through the zoo camp.

We already had a thousand registrants.

This is a great way for us to continue our mission of conservation education.

We relaunched our Little Learners program, which is for the littlest uh zoo members, uh toddlers.

We also just relaunched our wild night sleepover program.

This is for those really dedicated folks who really want to dig in to the zoo and spend the night.

So that's been a really successful program.

We've rebooted just this last month.

We've also relaunched our winter and fall camps and started a Chinese and Spanish camp as well at the zoo.

You may have seen us in your district tabling at events and festivals.

We're really trying to get the zoo out into the community.

We've doubled down on that work.

We have some of the team that's out there on the weekends.

We also have free conservation lectures.

In fact, yes, just yesterday, we had a wonderful free lecture on uh on our coral reef systems.

I want to highlight this is not meant to be exhaustive, but highlight some of the special events that we've rolled out this year, some of which are the first time we've done it.

We had our February Appreciation Month with special programmings.

We also had a weekend full of lunar new year celebrations, really celebrating our culture and bringing that culture into the zoo.

In March, we had our first ever Neurodiversity Week.

This was a really proud moment for the Zoo.

We partnered with a number of organizations, and we had quiet hours, quiet mode, and free resource guides.

In April, we had our very popular extravaganza event, and we also had EarthFest, where we partnered with 14 nonprofit organizations to spread the word about conservation education.

This month we're celebrating AAPI month, and we're having our first ever K-pop day.

You have to come check that out.

May 23rd, it will be really fun.

And next month we celebrate our 97th birthday.

Happy birthday to the zoo, and we'll also have a pride celebration.

You'll see us showing up in the Pride Parade as well.

Couple upcoming special events.

You heard earlier that we are trying new things.

We're trying to drive revenue in attendance.

So for the first ever, we're having an animatronic dinosaur exhibit.

For those of you with children between four and eight, you know that this is surely going to be a huge success.

It's tried and trued at many other institutions, so we're bringing it to our zoo this summer, as well as a winter lights festival that is uh, you definitely don't want to miss it.

In terms of citywide promotions, we're investing our limited resources strategically.

You may have seen Slope Boulevard yesterday with new street pool banners, and our Muni PSA campaign is launching this month.

I just want to note for a moment, again, I called out Nancy Chan, but she's done an excellent job on our earned media.

If you go on our website, we have a couple dozen great stories about what we're doing at the zoo, and we're working to get the word out about our endangered garter snake program or our yellow yellowtailed frog.

In fact, I'll be in Yosemite tomorrow for the 10,000th frog release with our national partners and our Yosemite partners.

We had our neurodiversity earn media with our partners at Brady Horse Therapy highlighted here, as well as our Mexican gray wolf repopulation efforts, and we had our monthly segment of exploring animals with Bridget, who's now a local celebrity, and she's here today as well.

She has a fan club now that shows up in the studio.

In terms of our social media presence, this has been intentional.

We're trying to connect with new audiences.

As you can see on the slide here, we've had a huge increase in interactions on Facebook and just general follower increase across all of our accounts.

We've also just launched an app.

What I'm particularly excited about this is the language access piece of the app, as well as our ability to collect data and program around where people are at what time.

So think you can understand where maybe the penguin feeding or draft feeding might be for the day.

We also are able to collect visitor satisfaction data so far, 92% positive visitor satisfaction data collected.

Now I want to talk a little bit about board governance and financials.

So as mentioned in the presentation earlier, we are really focused on building our capacity at the board, continued growth of board membership, and continued increased funding capacity.

We're also really excited to be kicking off our strategic planning efforts.

Those will start in full on May 16th at our board retreat.

We're gonna focus on our business strategic and master planning as well as governance best practices.

Now I want to talk a little bit about how we got to where we are.

Sarah alluded to this earlier.

I want to give a little look in the past.

So pre-COVID, we average about 900,000 visitors to the zoo.

Post-COVID, like many institutions, our attendance dropped significantly, and it's it's maintained at about a 30 plus percent decrease in attendance.

But as you can see, with some of the new iterations we're putting in place, we are projecting higher attendance for next fiscal year.

Attendance is our main form of revenue.

So when this is down, not only is our gate revenue down, our parking revenues down, our retail food and beverage is also down in sales.

At the same time, we had this attendance decrease, our cost of doing business also went up significantly.

So this is just to demonstrate we had about a $3 million cost increase at the same time our attendance was down.

This is just meant to illustrate a snapshot of the last 18 months where you can see, of course, we want this graph uh in reverse, right?

But our revenues are the blue and our expenses are the red here, so we continue to have to dip into our reserves in order to continue to maintain the operational standards that we have.

This gives you an idea of where those revenues come from.

As you can see, the lion's shares through admissions and ticketing.

We're thankful for the management fee provided by the city and county of San Francisco, four million dollars that makes up 17%.

And then membership is also a big form of revenue for us.

And our expenses, no surprise here in the animal division is the majority of our expenses at 35%.

We also have a large portion of expenses in our buildings and grounds.

I mentioned we're approaching our centennial.

Some of our buildings are about as old as the zoo, and they're very expensive to maintain.

I want to talk a little bit about what this proposed loan will do for the zoo.

First, they'll continue our ability to operate without major disruption.

Continue our ability to fundraise and secure sponsorship for future exhibits and events.

Continue our capital campaign to bring giant pandas to the zoo.

Launch our strategic business and master plan work, which will set the stage for the future of the zoo and inspire investment.

And also allow us to do a facilities conditions assessment so you understand the state of the buildings in our care that are yours.

Supervisor uh Melgar mentioned AZA accreditation.

I can't emphasize how important this is for our facility.

Our accreditation is up.

We uh every five years we are accredited.

This requires detailed application submission work as well as an inspection for three days, um, and required maintenance work.

My last slide here, I just want to take a step back because many may not understand the AZA world.

Um, but AZA stands for Association of Zoos and Aquariums, and it's the gold standard for animal care, only awarded to top-tier institutions that meet rigorous performance-based standards for animal welfare, veterinary care, conservation, and education.

It is so important that we're AZA accredited.

We can participate in breeding plans, field conservations, and scientific research.

Again, it's every five years, and we've had the privilege of being accredited since the inception of this program in 1979.

There's only 254 institutions, including us out of the over 9,000 USDA licensed facilities.

So I was glad to see this as part of the loan deliverables that we achieve successful accreditation, and this loan will allow us the time to do the work to achieve accreditation.

That ends my presentation.

I'm happy to answer questions.

Thank you.

I do have questions, but let's go to BIA.

Good morning, supervisors.

Nick Menard from the budget legislative analysts office.

Uh, here to report on items two and three on your agenda.

Uh, one is a resolution that approves the recreation park department to enter into a loan agreement for up to 10 years uh with the zoo to provide up to 8.5 million dollars in a loan, uh, consistent with the term sheet that's on file and the legislative file.

And then the other uh item is an ordinance that would deappropriate 2.5 million dollars from the open space acquisition reserve into Reckon Park's open space fund to fund uh the initial disbursement of the loan this fiscal year, uh, just to kind of put things into perspective.

The zoo is projecting about a 11.9 million dollar deficit in the two-year period through December 2027.

They have about 9 million dollars of unrestricted cash or investments as of June 2025.

That number is probably lower now because they're in an ongoing structural deficit.

So they're not able to fund this deficit from their budget reserves.

The purpose of this loan is really to tie them over over the next couple years while they engineer a financial turnaround and become self-sustaining, which will then be repaid by the zoo over the following eight years of the loan term.

Uh, the there's two policy considerations we know in our report.

One is that there's no actual loan agreement that's still being drafted.

Um so we have the term sheet, it's very detailed.

You can see the disbursement schedule of the loan that will occur as it as the zoo achieves certain milestones, meeting with the Wreck and Park and controller's office, but the actual agreement's not on file yet.

Um, and then because the zoo doesn't own any land or the animals, there's no collateral to secure this loan.

Um, and the entire financial turnaround is premised on them getting pandas and the pandas juicing attendance to levels um that they saw about 20 years ago.

Uh they have about 600,000 um attendee uh people coming to the zoo every year.

Uh they're hoping to get a million uh visitors per year um with the pandas.

I think that it is realistic that that could happen.

Uh, there's a lot of things that need to come together for it to happen.

Uh, so I think that there's a risk that the loan will be will not be paid back.

Um, and as we've described in our prior report, so we have an audit report uh that we issued on Friday, and then a couple weeks prior to that, we have a report on the impact of the zoo uh folding, in which case the city would have to assume control over the premises, secure the site, and um take care of the animals.

That would cost approximately 15 million dollars per year.

So I think this is about half of that.

Uh but again, it the it there's I think a risk that it may not work out.

I do have the audit team here in case the committee has questions about our audit that was released on Friday.

Um, but I think just we are considering approval of these items to be a policy matter for the board.

Thank you.

Um I uh I think I just wanna be on the record that this body did not receive the actual copy of the loan agreement until close business on Monday.

Uh it is my intention that I think not just this committee, but also for the public to be able to have a chance to view the terms and conditions and the details of the loan agreement before this body to formally uh approve.

It is my intention to support the agreement, the loan agreement, but I think that it is right to have a transparent uh conversation and process for people to view this loan agreement.

I have reservation about that this as a loan agreement, um, that I I view it more as that the city is providing a support um and extension potentially down the road could be a grant uh to the zoo should the zoo is not able to turn it around within two years.

I do have some questions, if I may, for um the zoo uh for um director Costello that I uh just specific on a few points.

I think both through the audit as well as through what we have seen from the previous leadership, some of the challenges that I I find um and is really um what happened is really the management versus workers' dynamics and recognizing that workers have long been voicing feedbacks and concerns, but it seems to be long ignored.

What is your um how how will you then now deal with this uh and changing that culture to make sure that management do have, like the workers actually have a menu to reflect their feedback to the management and that management is also being held accountable to be able to reflect back uh and be able to provide and be responding to the feedback provided by the workers.

Through the chair, thank you for the opportunity to answer the question.

So this is a really paramount issue.

Um, and it's one that I've spent a lot of time on, and so has the leadership at the zoo.

Um, the some of the first um conversations we had with the team was really sitting down one-on-one at coffees, um pr having launching staff meetings.

So I think we've had three or four staff meetings in the last nine months, really investing in culture.

Culture does not turn around overnight, so that's not lost on me.

This is a journey with this team.

I also have office hours once a month.

Um, I was pleased that we had maybe 10 people come to my office hours last week uh in the Lemur Cafe.

So there's an opportunity to provide additional areas for feedback.

We've also provided um anonymous ways to provide feedback through suggestion boxes.

Um we're really trying to reinvigorate the transparency and accountability.

I think that's another really big piece is being transpar as transparent as possible with the staff.

I've let them know that to the best of my ability, I don't want them to learn about their workplace in the media.

I want to be able to talk to them about what is coming, including the loan and the audit.

We we did our very best to communicate that ahead of time so that people could understand that we are complying with the audit and it is a big lift for us.

But frankly, we're gonna be a stronger institution once we implement the audit recommendation.

So we're grateful for that.

So I think to answer your question, we have a number of different ways we're improving culture at the zoo.

Um, and but we'll always this is a this is a long-term investment in the team.

And so then I have a request uh and a recommendation is that in your board directors as you continue to recruit them to actually include like union leaders at the table and actually have a member on the board directors to be part of that.

Because I think that that that is actually how you can make decisions moving forward with the feedback from the workers.

So I want to strongly encourage you and recommend you and requests that you recruit and include a member of the union leaders and uh at the as part of the board directors.

Um I also wanted to understand better that about uh vendors uh on site.

Part of the one of the issues that uh came about is that it seems like some of these vendors uh and contractors uh at the zoo and on site uh were uh retain or or hire or entering contract without going out to bid.

How will you with the existing vendors that you have in the moving forward to evaluate these contracts?

Yeah, thanks again for the opportunity to answer that question, Chair Chan.

Um so we we bid out our contracts now.

Um we have a competitive competitive bid in place.

In fact, we're rolling out new provisions also in our employee handbook to make sure that um we are we are being as transparent as possible in our bidding process.

And in fact, we have a current bid out for our most lucrative contract, which is our food and beverage and retail.

So that was up.

Uh that it expired December of 25, so we have that out to bid now, and we will continue to um to work forward to move forward with competitively bidding our contracts.

I think it's very important.

That's how I was trained at Wreck and Park.

We bid out all of our contracts, as you know, and so it's sort of second nature to make sure we're providing that smart business practice.

Yeah, and I and again, right?

I think that the city does that to make sure that you know, when we do contract out and have uh, and to also with the consideration about labor markets and to ensure that our contractors um have the ability to provide uh our city uh and departments that labor harmony is included uh in in the in their response for bids.

Um so I again want to strongly encourage that consideration when you do go out to bid uh and considering these contractors are that they are actually uh good contractors and good employers and that can ensure and provide and have a record of labor harmony.

Absolutely.

I think that my last question is actually both for the zoo and rec park and specifically about the ability of um joint rec park and zoo commission.

That has been really long been these long-standing governing body of both you know the partnership of zoo and rec park and reviewing sort of your contract, your budget uh collectively together, knowing that that there's a process of kind of evaluating where we're going with all these uh commission, uh, what is going to be uh the future or the conditions versus status of the joint uh rec park and zoo commission.

Sarah Madeline and Term General Manager, thank you for the question, Supervisor Chan.

Um the joint zoo committee is a function of the lease and management agreement that we have with the zoological society.

Um it has been it will continue to exist as long as that uh management agreement is in place.

However, I think what this has episode has shown us is it really needs to be strengthened in terms of its oversight and transparency.

Uh currently, there are very few, as I said in my presentation, very few things that the committee and then our commission actually approves.

Some of the audit recommendations were actually to strengthen those provisions.

And so the way we are looking at this is that there are a variety of uh conditions in the loan that require presentations to both that committee and then our commission.

So through the loan agreement, kind of strengthening the oversight there, and then once we get through this loan period, we fully imagine as part of the strategic and and master planning, there will be a re-envisioning of the relationship, and an element of that will be uh a strengthened committee process.

Thank you.

And and I think that like again, uh it's very similar to the board directors.

Uh the requests I have, I think that I want to give credit where credit is due for Commissioner Larry Marzola in on the REC Par Commission and being part of this process that also it's been actually working on this long before where we're landing today, and sort of just kind of really helping both the zoo condition and the workers and kind of flagging a lot of issues for uh for the city um to make sure that we're aware of that.

So I want to commend and thank him for his work.

And then so similarly is to say that perhaps in the future, should we continue to be able to have that joint, which I think it should be a joint body um evaluation of your your budget and your contract for for both the zoo and um the rec park?

It's not just having um, I think that union leaders at the table, but also I think that you know that zoology um society has also have their expertise, and I will also love to see people that have the expertise of caring for animals also being involved in on the leadership like for commission or and board directors, and I just wanted to recommend that again.

Um it would just help all of us better.

I think that there's an elements that both you know, General Manager Mallin and also Director Costello are both experts of you know city governments and city departments, but I think when it comes to running the actual zoo, like caring for the animals and caring for the site, uh I I like to see more expertise getting involved, being having seats at the table in governing um leadership.

Thank you for that.

Appreciate it.

Thank you.

Uh Supervisor Sauder.

Thank you, Chair Chan.

Um, for the zoo, can you speak to ways that you are reducing costs or finding cost savings right now?

Yeah, absolutely.

Um, so unfortunately, we've had to pause um promotions um raises and bonuses, which is unfortunate, but it's it's part of the cost of doing business that we can find savings.

We've also put a pause on discretionary projects.

So, as you can imagine, there's a long wish list that this team behind me has that we're not able to execute, and there's a lot of frankly, deferred maintenance needs at the zoo.

They were holding off at this time.

We also just went through a structural reorganization that resulted in a savings of about a million dollars, close to a million dollars, including um not backfilling certain executive positions.

And then in terms of the um the kind of calendar and menu of events that you've laid out and promotions, um, I think they're fantastic, I think they're creative.

How many of those or generally how many of those are new versus continued?

I would say the majority are new.

There's some that are relaunched that I spoke about, for example, the camps and the little learners program, the bilingual programs, the overnights, those all took a pause during COVID, and we're relaunching those, so we need a little bit of time to also grow and get the word out that we're doing that great work.

Those are also revenue generating opportunities.

So we want to continue to build that capacity.

But programs like the light show, although we've had an evening events in the past, this we haven't had it to this extent.

So this will feel very new.

And again, the animatronic dinosaurs, for example, this summer, we really needed a marquee event to drive attendance this summer.

And without a marquee animal um coming in this summer, we had to be creative and think about other ways to drive revenue and then capture those attendees into members.

That's the goal.

Good.

Yeah, I'm excited about these new special exhibits.

I think I mean, you said the word marquee.

I think they are the sort of um the sort of big exhibits and attractions that are going to draw people.

Um, you know, I think uh, I want to appreciate again the BLA's um audit and analysis on this.

Um it was it was hefty, it was much needed.

Um thank you, Supervisor Melbert, for your leadership on this.

I mean, I think we can all agree that San Francisco deserves a zoo we can be very, very proud of.

Um, and I think uh it's it's been a challenging uh past decade in particular.

Um I think there's a lot of optimism with your new leadership and and just seeing um this plan.

I think it comes down to as the BLA shared, you know, do we have the confidence that this plan, these changes can get us that boost in uh in attendance, you know, thinking, and I think um, you know, what you have here can tick it up back towards uh what it was in the 7, 8, 900 uh range, and then after that, you know, of course, we're all um hopeful for the pandas.

Um, so um thank you for your your work on this.

And again, I think um, you know, it's it's something we all uh support and we want to help you get there.

Thank you, Supervisor.

Supervisor Malgar.

Thank you.

Uh Chair Chan.

I just wanted to make a couple points before you go to public comment.

Um, first, thank you very much to all of you for engaging this deeply on uh this very important issue.

The zoo is a very important institution for San Francisco, but it's also really important for the economy of the West Side.

Uh, it brings visitors uh from the downtown core to the west side, and then they stay and they eat at our restaurants and engage, you know, with our residents.

So uh it is really important to us.

Um, the audit uh is a really important roadmap to success.

Um so while a previous leadership, you know, was sort of antagonistic about it, um, I think the new leadership recognizes that uh the audit um has findings and recommendations that are meant to guide the relationship towards success and towards um a good financial footing.

And I'm really grateful for the work of the BLA, but really grateful for the zoo leadership to recognize that this is a roadmap to success and to uh agree that the recommendations are needed and will be implemented.

And colleagues, I uh ask for your support in this, and you have my commitment that while I'm supervisor for district seven, I will continue to put in the work uh to make sure that the zoo is successful and that we all collaborate together to have this wonderful institution thrive and be part of our offerings in recreation and parks.

Um and lastly, I will say that um uh thank you for recognizing Commissioner Mazzola's uh role in this, uh Chair Chan.

Uh he has been sounding the alarm for quite some time, particularly when there has been labor um, you know, uh lack of peace uh at the zoo uh in highlighting the things that we need to do.

Um one of the things that I think is really important out of the recommendations uh that we have from the BLA is that the MOU that we have for the zoo dates back to the 1990s.

It is typewritten, it sets out things, you know, like the joint zoo committee, but it also doesn't meet our standards, our modern standards in terms of transparency and accountability.

Um, and part of what we need to do uh besides the planning, the strategic planning for the zoo, but also long-term planning for our relationships is to someday uh and I think sooner rather than later, revisit that MOU, um, and look at the relationship and whether or not it's conducive to success, not just for Rack Park, but also for the zoo.

Um the who owns the land, who has control of it, who can securitize loans against it to do capital improvements, all these things are I think really important.

So you have my commitment that I will be uh spending the time with our uh labor partners with our zoo leadership and our department to make sure that we are all successful in this um relationship.

And thank you so much for your time.

Thank you.

And here's my last thought about this um really uh really based on the the feedback from the budget and legislative analyst report, recognizing that the SF zoo is really looking to Panda as a main attraction for you to generate um the emission and visitorship and and your revenues.

I I think that uh I do understand that approach.

Uh I want to recommend that to have um a more dialogue uh with the Chinese government, to have more direct dialogue with the Chinese government and um to figure out terms and conditions uh that are mutually beneficial for the long term.

But more importantly, I really urge the SF Zoo like leadership uh and management uh to prioritize the animals that you currently have, as well as the sort of San Francisco Bay Area climate and conditions with wildlife habitat, existing conservation efforts that is in the area that truly creates sort of a symbiotic relationship that the zoo, our zoo would have with our local environment.

Conservation effort is a truly, I think, a more sustainable and long-standing operation model for a zoo like ours, to be able to say that we generate not only education purposes, but we also can have more partnership, wider partnership for environmental organizations, as well as our economy of sciences, and so many more that on a local level that we can create so partnership that truly benefits San Francisco Zoo for the long haul.

So I just want to urge the zoo leadership to really truly prioritize that and invest resources and staffing.

And I also think that you know that relationship again with uh Reck and Park, which actually has the natural areas group, and as well as all the work that actually Rep Park has done to for environmental causes and wildlife habitat.

I just find that your relationship can be greatly strained.

I mean, we're seeing the old whole, you know, old team like reunion here.

So I feel right, like so I feel like we can we can make this happen in in the most amazing way.

Um so I want to just be on a record to say I'm supportive of that vision, I'm supportive of that um relationship building, but I also do understand the the investment that you want to put in to pursue the panda.

I'm just saying um please consider the next two years of your most critical time and use your staffing and resources wisely to be able to I say to invest something that is truly can build a foundation for the long haul.

And so with that, I don't see any other name on the roster.

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

Yes, we are opening public comment for both these item numbers two and three.

If we have any members of the public who wish to address this committee, as soon as we have our first speaker at the lecture, and I could start your time at two minutes.

Good morning, Chair and Commission members.

My name is Fleur Doors.

I represent over a quarter million supporters of indefensive animals, Panda Voices, and SF Zoo watch.

I respectfully urge you to vote no on the $8.5 million bailout for the San Francisco Zoological Society.

We acknowledge that the CEO has stepped down, but changing the captain does not salvage a sinking ship.

The city's own audit proves that this operator fractured public trust.

When accountability is raised, public money is laid to waste.

They didn't just bend the rules, they broke the bank.

San Francisco Zoological Society hid 12 million dollars in unauthorized spending, masked structural deficits, and ran city-owned heritage buildings into the ground.

Combined with the Animal Welfare Commission's dire warnings, the suffering of animals, staff, and city property is undeniable.

Worse, they want this handout to pave the way for a ruinous 27.5 million dollar panda plan, a vanity scheme currently under federal investigation for financial misappropriation.

We cannot finance foreign schemes whilst our own facilities rip at the seams.

Post oversight was asleep at the wheel, but you can take back the keys today.

Approving this bailout tells every city contractor that a long relationship excuses chronic failure, do not reward contract violations with a blank check, reject this bailout, and instead build EcoPAC SF, a sustainable sanctuary that benefits our community.

Thank you.

Thank you much, Laura Doz.

Next speaker.

Good morning, supervisors.

Thank you, Chair Chan.

I'm here on behalf of the San Francisco Building and Construction Trades today.

First, want to start off by saying really appreciate the new leadership at the San Francisco Zoo as a parent, someone that has spent significant time over the last two decades at the zoo.

Cause a lot of anxiety for a lot of parents, a lot of families, and a lot of leadership here in the city.

So I want to recognize also Supervisor Melgar.

Thank you for getting out in front of this.

Thank you for putting forward a good plan and working with the Zoological Society and Reckon Park.

I know Miss Costello is coming in with a strong mandate, but she has definitely already begun to steady the ship.

The building instruction trades have been tracking this for some time.

Just want to also recognize the teamsters and the frontline workers there that have been ringing the alarm on these issues for years.

And they finally have someone that is listening, they have leadership at the board here.

So we fully support this.

This is too important an institution to allow to fall into either disrepair or financial mismanagement.

And I think this is the right plan.

And as Supervisor Chan said, Chair Chan, I know the pandas are going to be a big hit, and it's going to remake and re-energize the zoo.

So thank you.

Thank you.

Thank you, Supervisor Safayi.

Next speaker, please.

Good morning.

Thank you for the opportunity to speak with you today.

I'm Dr.

Emily Walko.

I'm the assistant director of wellness and behavioral research at the San Francisco Zoo and Gardens.

And in that capacity, it is my job to support well-being for all of the animals in our care and to make sure that we're practicing evidence-based care.

So a large part of that means monitoring the animals both directly and through other staff members and caretakers to ensure that we're collecting data on how our animals are behaving, how they're utilizing their space, and how we can improve that.

So using both data from our institution from the field of animal welfare more broadly, animal welfare science, and utilizing the information from other zoos and institutions that house animals to make sure that we are making decisions that are evidence-based and that really allow our animals to thrive in our care.

In that capacity, I also collaborate really closely with our behavioral husbandry team who specializes in providing behavior-based enrichments for our animals and for training that allows animals to voluntarily participate in their care.

And all of that obviously very directly benefits our animals, but it also helps us achieve our mission because people also like to watch animals who are really engaged with their environments and who are thriving, and so that allows us to really allow people to connect and care and go on to conserve as well.

And while I think we currently are achieving greatly in supporting well-being for all of our animals, there's always room for improvement.

Some of our recent advances have been utilizing drone technology to improve the data collection that we collect on how data how animals are utilizing their spaces, using 3D printed technology to really customize enrichment for our animals.

So across the board, I think that your support of the zoo would really allow us to continue to support the animals and allow them to thrive in our care.

Thank you for your time.

And thank you, Dr.

Emily Walco, next speaker.

Good morning.

My name is Shelby Hasbin.

I'm the director of environmental services at the San Francisco Zoo.

I've been working at the zoo for 31 years, and that's where I met my husband of 26 years.

Being a farmer's daughter, I grew up around animals, nature, and as have always been interested in conservation.

In middle school, I planted trees in San Francisco and collected garbage and recycling off the streets of my neighborhood.

So I couldn't think of a better place for me to work.

In environmental services, we do not just talk the talk, we walk the walk.

Every bag, garbage, carpost with cycling is hand sorted.

We remove all of our launch debris bins to create a space for employees to drop items so we can sort them later.

The zoo has tripled the composting for customers in the back of the house as well as in the front.

In August of 2025, we've introduced glove recycling to have diverted 480,000 gloves so far from landfield.

We've upgraded our dispensers to be more eco-friendly.

That way, if parts break, we can change out parts instead of the actual whole dispenser.

We use uh 100% recyclable um papers.

All of our cleaning products are glean, concept green, concentrated, to reduce packaging.

Our cafe is now using 100% compostable materials.

We have installed water bottle fill fill stations to reduce plastic waste.

Um the last diversion rate that I got from ecology was 86.5%.

In 2023, the zoo won the San Francisco Chamber of Commerce Award for sustainability.

Our team also has taken part in educational public about we recycling and what happens to all that poop with our poop and scoop game.

I uh we also host other zoos to come and look at how we sort and divert uh garbage from our landfill.

I'm proud to be part of the San Francisco Zoo for education, inspiring customers to be in interested in the world around them.

The zoo isn't just an attraction, they are educational resource that serves hundreds of thousands of San Francisco community members and visitors around the bay.

Thank you much, Shelby Hasman.

Next speaker.

Hello, my name's Corey Hallman.

I'm the Teamsters Local 856 representative assigned to Teams or assigned to the San Francisco Zoo.

This is also personal.

I used to be an animal keeper at the San Francisco Zoo for 13 years.

So first of all, I want to thank Supervisor Melgar for listening to the workers over a year ago about some of the issues happening at the zoo and getting legislation in front of everybody here to, you know, come up with an odd audit of the zoo and a solution to how to turn the zoo around.

You know, Teamsters is very optimistic with uh the new leadership at the San Francisco Zoo under uh CEO Cassandra Costello.

For the first time in many years, we're seeing a real collaboration between the mayor's office, Reck and Park, Board of Supervisors, the Zoological Society, and Teamsters Local 856.

We're very optimistic with the future and the direction that the zoo is going, and I urge you to support this legislation and use this loan to kind of bridge that gap to help uh the new leadership kind of come up with a more successful plan in turning the zoo around.

Thank you.

And thank you, Corey Hallman.

Next speaker.

Hello.

Um, my name is Leticia Francis.

I'm the conservation liaison at the zoo.

Um, so this position is fairly new.

It was filled for the first time in October of 2023, and it was created to increase conservation messaging, engagement, and education, as to support our mission.

Um, so in my role, I help to share conservation information with the public and make it more accessible, which is really important because accessibility is one of the big conservation barriers, um, big barriers in conservation engagement, which makes it public outreach and programming super important at the zoo.

Um, so one of the initiatives that we have at the zoo is programs like our Gorillas on the line, which is an AZA SAFE program.

Safe stands for saving animals from extinction.

Through this program, we recycle old cell phones to be able to raise awareness for uh gorilla habitat with you know um what happens with coultan mining in the habitats.

Um, it also helps to raise funds for gorilla conservation, which is extremely important because gorillas are considered critically endangered in the wild, and so anything that we can do to help um promote that and also make sure that we're doing our part in global conservation efforts as well as our local conservation efforts, um, is really important.

Um, we have been part of this program for six years, I'm very proud to say.

Uh, we have recycled over 1,200 small electronics, including cell phones.

Um, and this helps to divert e-waste from landfills, but it also helps to raise awareness about different things that people can do with conservation and how people can engage in conservation.

So I want to thank you for considering this loan so that we can help to expand our public programming and continue to do this work to help make conservation accessible to the public.

Thank you.

And thank you much.

Next speaker.

Good morning, committee and supervisors.

My name is Mark Leach.

I am a city resident, District three, animal lover, and a gardener.

Uh, but as a Teamsters 856 union rep, I'm here today to support Corey and the members that he represents at the zoo.

I support all workers and the work that they do no matter where they work.

Um, I'm here also to support the loan that is being discussed so that the zoo can continue to do great work caring for animals and caretaking, a great San Francisco institution.

This is just another important step, along with new leadership, so that we have a new positive direction for the zoo.

Thank you.

Thank you, Mark Leach.

Next speaker.

Good morning, and thank you for this opportunity to speak on behalf of the zoo.

My name is Lamar Walker.

I'm the EVP of Obson Belonging.

And I've been in the zoo for over 22 years.

As a native San Franciscan, the zoo's always been an impactful part of my life, from my first field trip to visiting with my mom as a kid.

And like many kids growing up in the city, is my first real exposure to animals.

It made me realize how important conservation is.

And even to this day, I see that impact the zoo has on our youth.

I see that my kids have eight and six-year-old sons, and it builds an appreciation for something that's beyond yourself, that our actions have a direct impact on the planet, and as that experience and exposure and connection that they have when they visit the zoo.

You heard about our free field trips to for SF Unified School District and also for Breck Park as well.

But we also partnered other organizations too, such as United Players who help kids from the east side come over to visit the zoo and mission-based groups like La Casa de las Madres.

We also had our leadership fellows, which involves 70 different high schoolers coming to the zoo to work on soft skills, or I like to call you know human skills, talking to people, getting in front of people, things along that nature, as they lead zoo campers throughout the zoo.

They also have behind the scenes.

It is not just animal areas they go behind the scenes, but areas like marketing, horticulture, and maintenance that make the zoo run.

All areas just give them more opportunities and more exposure, different opportunities.

Also, we have those behind the scenes for our high schools such as Gateway High School in Oceana during their project week.

The school becomes a living classroom for them as well.

We also work with the JCYC Enterprise for Youth, YouthWorks, provide internships and mentors for them during the summer season, too, as well.

Uh they're paid by the organizations, but the zoo gives a nice home base and the stability and structure they need.

And also zoological, speaking of zoologically classes, we have our Washington High, which you partner with that offers the only zoology class in the San Francisco Unified School District.

Pretty much to sum it up.

Support for the zoo is support for future conservationalists and the launching path for the next generation of scientists and animal environmental activists.

So we ask you please help continue with our mission for youth and also connecting youth to the wildlife.

Thank you very much for consideration.

Thank you much for your comments, next speaker.

Hello, good morning.

My name is Bridget Israel.

I'm the assistant curator of the KRAT Center of Animal Rescue and Conservation, or the ARC for short.

So to tell you a little bit about what we do down at the zoo, we are the rescue center.

So as our name implies, we're a long-term home for rehabilitated native wildlife, owner surrenders, or animals confiscated from the illegal pet trade.

It is an honor to offer a safe home to animals that had a challenging start to life and a privilege to tell their stories every day through the educational programs that we deploy daily throughout the zoo.

We also have a robust youth volunteer program comprised of over 100 middle school through high school aged kids.

Middle schoolers start out on our nature trail in the summers learning how to educate guests about conservation, and then they graduate to our junior zoologist program, where they learn more about husbandry and how to care for the animals within the building.

The ARCS Youth volunteers don't just learn how to care for animals.

They learn public speaking, they learn foundational life skills like how to do laundry or sweep a floor, and they build community within their cohort.

Many lifelong professional connections and friendships have started at the ARC.

The program's reach don't begin and end at the Arc, however, we are celebrating our 50th year of Nature Trail this summer.

So since the program was founded in 1976, many nature trailers have gone on to do conservation work for the rest of their careers.

As illustrated by our alumni who now work in government agencies like California Fish and Wildlife or run their own wildlife rehab centers now.

We are incredibly proud of the people and the programs that come out of our department.

The ARC is truly a community of people and animals, educating the public about wildlife.

Thank you so much for your consideration this morning.

Your support would go a long way for the animals offered a second chance at the ARC and would allow us to continue our legacy of conservation.

Thank you.

Thank you, Bridget Israel.

Next speaker.

Good morning.

My name is Dr.

Nick Danemiller.

And I am lucky to be one of three clinical veterinarians at the San Francisco Zoo, and I've been with the zoo for about 18 months.

I'm here to highlight the excellent work that the Zoo's veterinary program provides to its animal residents for citizens, which is grounded in preventative medicine and a very modern approach to kind of holistic health care.

This approach emphasizes routine health assessments, thorough diagnostics, and evidence-based treatments to address both individual and species specific diseases.

We believe preventative care is humane, reduces illnesses, minimizes invasive interventions later on, and lowers long-term costs by catching things early.

This includes overseeing the zoo's commissary and nutrition program, ensuring that all animals receive the highest quality produce and meats, as well as that the diets are individually tailored to that specific animal.

In addition to proactive health care, we also provide 24-7 emergency response to manage urgent injuries and illnesses swiftly.

When specialized care is necessary, we performed advanced clinical and diagnostic procedures using modern veterinary techniques.

For example, last year, our team, and I'm very proud of this, performed groundbreaking cataract surgery on our young male wolverine, which restored his vision when he was previously almost blind.

We are also actively treating iron storage disease or hemochromatosis in one of our western lowland gorillas, which has required advanced diagnostics in collaboration with human and veterinary specialists across the Bay Area.

At the end of the day, the quality of work that I do directly impacts the quality of life of the animals at the zoo, and I believe the support of this loan will greatly enable me as well as all the wonderful colleagues who have spoken today to do the best quality work possible.

So I appreciate the consideration.

Thank you.

And thank you, Dr.

Danimiller.

Next speaker.

Good morning, Chair Chan, Supervisors.

My name is Marie Claude Neto.

I serve, I have served as the chair of the uh board of uh the San Francisco Zoological Society for the last 11 months.

We appreciate the thorough work of the audit team.

Thank you so much.

We're grateful to Supervisor Malgar and the mayor's office and the recreation department for the continued partnership and support and for the audit recommendations.

We really welcome those audit recommendations.

Many have already been implemented or are underway, and we are committed to completing the remaining work.

This loan will help us ensure that the zoo can continue making progress towards those recommendations, strengthen its operations, and serve San Francisco families for years to come.

We respectfully ask for your support.

Thank you.

Thank you much, Marie-Claude Nadeau, next speaker.

Good morning, Supervisor Chan and supervisors, and thank you in particular to Supervisor Melgar for your leadership on this.

My name's Matthew Delia.

I've been a member of the board for uh of the zoological society for two years, and I'm here to uh urge your support of the loan.

Um I'm a parent of three kids in the city who are often at the zoo, also doing the zoo camps.

They'll be there this summer.

Uh, and it's really a jewel of an institution for the city.

Um, the zoo, like the city has faced uh headwinds in recent years, and under Ms.

Costello's leadership, we're facing those head on.

We're improving operations, uh, stabilizing finances, and doing other things to drive attendance.

The loan provides a pretty a critical piece that we need for advancing the zoo for everything the city would like to do.

Beyond being a place for kids to go, it's doing amazing research and uh wildlife protection.

It's an institution that deserves protecting.

So we we greatly urge your support.

It's a public private partnership, and the zoological society remains committed to partnering with the city to help advance the zoo moving forward.

Thank you.

Thank you much, Matthew Zelia.

Next speaker.

Hello.

My name is Patrick Schlemmer.

I'm the director of global conservation at the San Francisco Zoo.

I'm also a native San Franciscan growing up in the Bay Area.

I had the opportunity to work at a number of our great science institutions, including the Exploratorium, the Marine Mammal Center, the Oakland Zoo, Curiosity, and the California Academy of Sciences.

I was president of the San Francisco Naturalist Society and organized a free natural history lecture series at the Randall Museum for 16 years.

But most of my career has been at the zoo.

I started volunteering as a teenager in the 80s.

I was one of those kids that grew up on nature trail.

I've worn quite a few hats of my time at the zoo, including 18 years as an animal keeper and a proud union member, and 11 years as a curator overseeing at various times the Children's Zoo, the Insect Zoo, and the Animal Rescue Center.

For the past two years, I've been a director in our conservation department.

One of my current projects is organizing the zoo's very first bio blitz coming up this Sunday.

The goal is to increase appreciation for the amazing species that are all around us.

Located where we are between Ocean Beach, Fort Funstan, and Lake Mercedes, the zoo harbors a remarkable amount of natural biodiversity.

We've documented almost 500 species to date on grounds.

And it is a project that ties in very well with our mission to connect people with wildlife, inspire caring for nature, and advance conservation action.

Finally, as someone who has spent 40 years at the zoo, I can honestly say I have never felt as hopeful for our future as I have since the current leadership started last year.

I think that we are now on track to make San Francisco Zoo the world-class institution that our world-class city deserves.

Thank you.

And thank you, Patrick Schlemmer.

Next speaker.

Hi, my name is Edrian Mutlow.

I'm the executive vice president of Animal Health and Welfare.

I've been one of the zoo vets for the last 18 years, but I also oversee the conservation department, and I'm here just to follow up on to highlight the important stuff we do with the conservation of the California native species.

So our conservation department has a team of six dedicated animal care staff that work in a specialized exhibit area off exhibit from the rest of the main collection.

Over the last 15 years in particular, we've developed very strong partnerships with multiple agencies, universities, and other zoos, to build up some recovery programs, the some of California's most endangered species.

These include California Red Leg Frogs, Foothills, Yellow Egg Frog, Serie Nevada, yellow neg frogs, Yosemite Toads, Western Pond Turtles, and the San Francisco Gauss Snakes, which we just added this last year.

So the animals are brought into the zoo at their most vulnerable life stages like tadpoles or eggs or neonates, and then we rear them up into juveniles or young adults so that they're in a much uh they're much more likely to survive when they're released into the wild.

In fact, this week is an important milestone for the zoo, as Cassandra mentioned.

Um we'll be releasing our 10,000th amphibian from all the frog and tow programs over the last 15 years in Yosemite tomorrow.

Um, and we'll also be marking 10 years of the California Red Lake Frog Program in Yosemite National Park tomorrow.

Um this is a particularly proud one for us because uh if you see any red leg frogs in Yosemite National Park, they all came from the zoo or the descendants of zoo frogs, and they're now self-sustaining, and we're even using that population as source for other animals for other introductions.

So over the summer we're planning to reintroduce 2,000 frogs, and uh we're also going to be doing our first uh release of the San Francisco Gautasnakes, which is a new project this year.

So I just like to highlight the somewhat behind the scenes conservation stuff we do and encourage you to support the loan.

Thank you.

And thank you much.

Next speaker.

Good morning.

My name is Mark Villa.

I've had the pleasure and opportunity of being a union member in the horticulture department at the San Francisco Zoo for the last uh 26 years and a shop steward uh for the last 14 years for Teamsters 856.

Uh first off, thank you, supervisors uh Melgar and Chan for your uh concern, attention, and support for the union workers at the zoo.

It is very much appreciated.

We really do, we really do thank you.

Um I have had, like I said, I've had the opportunity of being at the zoo for too many years, maybe, um, but uh, but I've loved every year, I've loved uh every year of it.

Um this new current management.

I've been through three managements so far.

This current management is the first management that has wanted to work directly with uh the union, and that has asked us what what can they do to help us instead of the other way around.

So that is a wonderful refreshing um attitude and uh and presence.

I do urge you guys to support this legislation and this and uh the loan for to continue this great work that San Francisco Zoo does.

Thank you very much.

Thank you much for your comments next speaker.

Good morning my name is Kay Twardson and I'm here to ask for your support in approving the loan for the San Francisco Zoo and Gardens.

I stand before you as a zoo keeper of 12 years but also as someone who grew up at the zoo.

Some of my earliest memories are there.

I first began volunteering as a teenager and over time that experience grew into a lifelong path leading me to become a zoo keeper.

It's more than where I work it's been a constant in my life and a meaningful part of this community.

It's where I learned to love animals, to be curious and to feel connected to something bigger than myself.

And now I have the privilege of giving that same experience to others.

Every day I care for animals that depend on us some that are critically endangered that can't advocate for themselves and make sure to provide them the best care possible.

And every day I watch children see them for the first time their excitement their wonder the way it stays with them that's how a connection to the natural world begins.

I know there has been challenges but I am also for the first time feeling optimistic I've seen the new leadership take accountability show transparency and commit to doing better for the animals the staff and the city this loan gives us chance to keep going to rebuild to improve and to become the zoo this community deserves the zoo is special it inspires educates and contributes to conservation efforts that extend far beyond its gates it's not just a place it's a part of who we are as a community I'm asking you to believe in the future of the zoo the way so many of us already do.

Because this isn't just about funding it's about protecting something that matters the zoo helped shape me who I am today and with your support it can continue to shape future generations to come.

Thank you for your continued support Supervisor Chan and Supervisor Melgar and thank you for your time.

And thank you much for your comments next speaker.

Hello my name's Alicia Carroll and I'm the director of education classes and camps at the San Francisco Zoo.

I want to thank you for your support and continued support of our educational mission and we provide zoo camps for our children at the San Francisco Zoo.

It's the most popular program it's been around for um 30 years it also is revenue generating most of the programs that I run are revenue generating whether it's the Zoo camp, the Little Learners Program, and then we also offer our bilingual camps in in Chinese and in Spanish for free to our community.

Our curriculum is developed to be hands-on and accessible to speak to conservation messages but also to help kids get some science um out of school time a lot of kids don't have a lot of science in their classroom so the San Francisco Zoo provides that our staff work with children it's a backbone of what we do and our docent are also involved in the community and um out in the zoo sharing uh the animal facts and biofacts with our public thank you for your time thank you much Alicia Carroll next speaker.

Hey everyone my name is uh Quim Brown I'm the curator of uh birds reptiles and the Ark next month I will celebrate my 22nd year at the zoo which means I've spent over half my life at the zoo it's a very special place um to many people but particularly to me because after 22 years I still feel like I can make a difference in animals and people's lives um which is pretty important I was first introduced to zoos when I was seven as a zoo camper, and then that led to me volunteering.

Um, having spent over half my life at the San Francisco Zoo, I truly find it special, and it's something that I love to do every single day.

Birds and reptiles play a special role in nature, and our goal is to help guests see and how special and important they are.

Um, the bird collection at the zoo includes birds from around the world transporting children and adults alike, educating them to appreciate non-human beings, which is really really important.

There's not many places you can learn to do that.

One of the closest species to my heart are two cast warriors, Dane Tree and Dolly, and then the other would have to be our 50 Magellanic penguins, which have a history dating back to 1984.

We were the first to maintain the species under human care, and we maintain the largest, most successful colony anywhere outside of the wild.

Some of our most long-lived penguins are a testament to the individual individualized and superior care that we offer every animal at the zoo.

Um other bird success stories include our successfully breeding pair of critically endangered Bali Mina that we had last year.

We had two chicks.

Um, this is a cooperative effort between AZA to save the species from extinction.

There are literally less than 100 individuals in the wild.

Thank you for your consideration of the proposed loan.

Um, this will go a long way in helping us stabilize our finances and for us to focus on what's important.

Thank you.

Thank you much, Quinn Brown.

Next speaker.

Hi, good morning, supervisors.

My name is Michelangelo Torres, and I'm a district three resident.

I work for Indefense of Animals overseeing Bay Area Campaigns, and although I'm speaking today on my own behalf, I also serve as chair of the city's animal commission and recently joined the joint zoo committee in a non-voting advisory role.

I'm here to respectfully urge the committee to delay the decision concerning the proposed loan to the San Francisco Zoological Society.

I want to be clear.

I know there are wonderful people working at the zoo, and I really respect and appreciate Cassandra Costello.

My concern is not with them, it's with the zoological society as an institution based on what we have all seen.

The timing of this hearing is challenging.

It comes just days after the release of a detailed audit that raises significant concerns, an audit that the zoological society actively resisted.

They refused to provide documents and fought oversight.

In any lending process, you evaluate risk, including financial history and transparency.

In this case, the budget and a legislative analysis has done that in the form of a 250 page audit outlining serious concerns about management and fiscal practices.

Moving forward with this loan now would send the wrong message that resistance to oversight has no consequences, and the city is willing to move forward without seeing meaningful change.

I want to thank the board for initiating this audit and especially acknowledge and thank the community members, the advocates, the activists, the bloggers, the reporters, the current and former zoo employees who worked hard to bring these issues forward.

Now is the time for the city hall to follow through on their hard work.

Pausing this item would allow time to evaluate how the zoological society responds to the audit, whether meaningful changes are implemented, and give the public a chance to review and engage with the findings.

You have leverage right now to require accountability and move the zoo towards something better.

Please do not rush to reward an organization that fights transparency and accountability, and I respectfully ask that you do not make a decision at this time.

Thank you.

Thank you, Michelangelo Torres.

This is our last call for a speaker, so if you haven't addressed this committee and you wish to do so, please line up now.

Otherwise, this will be our final speaker.

Please.

My name is Elizabeth Beatty, and I'm a docent at the zoo.

I'm also a board member as a docent liaison.

I've been extremely impressed with how fast changes have been made since Cassandra came on board.

I've seen a lot more transparency and um about what's happening in the zoo and how it is being managed.

I've also seen a lot more inclusion and recognition of staff and volunteers.

Docents support the zoo by talking with our guests about our animals and about our conservation efforts.

In the last three years, with more active outreach to the community, we've nearly tripled the number of active docents at the zoo.

In 2023, we had 40 active docent.

Now we have a hundred and ten.

This really demonstrates that the zoo's mission when we get the message out there resonates with the community.

We're getting volunteers in.

With more docent, we've also been able to more than double the number of guest interactions between 2024 and 2025.

In 2025, docents interacted with guests a hundred and seventy-two thousand times.

That's a lot of time to talk about our conservation efforts and and encourage the guests to initiate their own actions.

So as you can see, docents spend a lot of time talking with guests, and they give us many opinions that they would like to share, including when are the pandas coming and when are we getting more baby animals?

But what they have noticed recently is the changes due to Cassandra's management.

They see her out walking in the zoo, talking to guests, talking to staff.

They are happy to see the more positive publicity that Cassandra has been able to generate since she has started.

They have actually mentioned it, like she is everywhere.

She is doing promotions, she's walking the zoo, she's talking to staff, she's having office hours.

Speaker time has expired.

But thank you much for addressing this committee, Elizabeth Beatty.

And seeing no others in the queue, Madam Chair to complete your queue.

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

I do have one final question.

Maybe it was answered, but it wasn't clear to me.

When I think this is more for um actually it's for both rec park and for the zoo, but um perhaps the zoo can actually um tell us, Director Costello, when exactly will this, as it indicated that there is going to be an updated lease and management agreements between Rec Park and Zoo.

Um, has this been started?

Has this process in terms of conversation started, which I assume it has, and then when do we expect it to be completed?

We are eager to begin those discussions.

The agreement is 33 years old.

We're eager to jump in and modernize the agreement.

Uh that's from the zoo's perspective.

I'd invite Rec Park if you have other comments.

Uh Director of Administration and Finance for Rec Park Antonio Guerra.

Uh, we believe that initially this uh proposed loan agreement would uh uh allow us to create a tighter relationship with the zoo with specific deliverables.

Uh we um happy to talk to the zoo further about a potential uh new loan and management agreement, but in responding to the BLA audit, we did not think it was necessary at this time.

I would think the opposite.

It is necessary at this time with the BLA's audit or the budget of legislative analyst audit that it is indicating that you know there seems to be uh you know in compliance to the agreement, the existing agreement already.

Um it seems like lack of oversights of the existing agreement.

Um I am going to ask for the zoo as well as REC Park to have a joint letter submitted to this body to go along with this loan agreement to express some of the either some kind of you know mutual agreement, timeline, somewhat of a milestone of what and what are the next steps that you will be actually doing or taking for updating this lease and management agreement.

Um, it is my expectation that uh I know Suez Maga wants to say a few words.

It is my expectation that today colleagues uh on this body, um I I do hope that we could move forward with the de-appropriation funding, um, and which then this will issue this body approve the deappropriation and the appropriation of that funding, then it will actually show up at full bore for approval, should this body approve, and that for a continuance of the loan agreement for one week, then it is my intent again that you know we will have if necessary further discussion, but what I'm hoping is that to allow one week to have public to view the loan agreements, the details of it, should they need to send us public comments, um, so then by then next week we can come back, and it is again my intent to support that loan agreement, but to really allow some dialogue in the public um sphere to to again opine on the loan agreement, and should that actually be also approved by this body, it will be then going to full board for approval in um at the full board in the following week.

So, what I'm looking for is that some kind of joint letter or you know, stating of what how the two departments or have the zoo and reconpart will be evaluating your next steps, updating the lease and management's agreement.

Um I am expecting to have it next week uh during the budget and finance committee with the loan agreement, so that you could go follow to the full board in the following week.

Supervisor Malgar.

Thank you, Chair Chan.

Um I was just gonna say that I couldn't agree with you more that uh an updated loan agreement uh is required to have a transparent accountable relationship, but most importantly, um that it reflect modern standards of lease agreements that we have with other uh partners around the city.

Uh so I do not think that the loan agreement is sufficient for that.

It is only sufficient for this little bit, not in the long term.

And it seems like in our city we kick the can down the road too much, like we really need to deal with this.

That being said, um I don't think that the loan agreement is something that can be negotiated quickly.

Um, and it is tied to the strategic planning that uh is gonna go forward.

So um I wonder, Chair, if what you want is just a commitment to engage in the process and a timeline for that, and if that's the case, I think that we can do that, you know, uh quickly.

Um I just wanna make sure that we understand that that the negotiation of a loan agreement is fairly work intensive and it's gonna take some time and also city attorney review and all that stuff that you know very well.

So thank you.

But I couldn't agree with you more.

I think you're exactly right.

I think I'm only simply looking for intent, a share intent and a share um agreement of how do you approach the next steps and what the timeline actually looks like.

And should this be something along the line of you know, the loan agreement needs to be approved by the board, and that you know the the zoo needs to be able to provide financial records to show that you're in good faith, that that you have a strategic five-year strategic plan, however way you set the milestone to say this is where we then the city um with advice of the city attorney as a recon part, then can come into an negotiate start to negotiation of the lease and management agreement.

That's totally fine.

But I think that what I'm actually asking is for a mutual understanding that is clear to both entities and to this body that what and how do you view the next step.

I I certainly think that is because of this.

I'm in support of this loan agreement.

Um, is because I am committed to the long-term vision of San Francisco Zoo, that I concur with Supervisor Malgar, who came to me with sense of great sense of urgency, both on phone calls on the weekends and in person at our office uh at her urging that she it's with her sense of urgency that I concur with that that we must do everything that we can as a city to ensure the well you know the solvency of San Francisco Zoo, and and therefore uh I'm in agreement with this loan agreement because I see it as a city's long-term investment um to San Francisco Zoo, which then means I also am looking forward to see the the commitment or at least perspective from Rack and Part, you know, about what your next steps will be and not sort of just leave this San Francisco Zoo hanging for the next two years, simply just waiting for this loan agreements to materialize.

So I think that it's only fair for for this body to kind of understand what are your working relationships and next steps.

So thank you.

And um, I don't see any other names on the roster.

Supervisor Melgar, do you have any other last remark?

And without that, um, colleagues, I would like to first uh move item two to full board with recommendation um and a roll call, please.

And on that motion to refer the ordinance and item number two.

To the full board with recommendation, Vice Chair Dorsey.

And Dorsey, aye, member Sauter.

Soder, solder, aye.

Chair Chan.

Aye.

Chan, I we have three eyes.

The motion passes.

And then uh colleagues, I would like to uh continue item three to NICS, budget and a finance committee meeting.

Uh and with that, a roll call, please.

And on that motion to continue the resolution and item number three to the May 13th meeting of this committee.

Vice Chair Dorsey.

Aye.

Dorsey, aye.

Member Sauter.

Sauter, aye, Chair Chan.

Aye.

Chan.

Aye.

We have three ayes.

The motion passes.

Thank you.

And with that, Mr.

Clerk, please call item number four.

Yes, item number four is a resolution retroactively authorizing the Office of Economic and Workforce Development to accept and expand the grant and the amount of five million from the California Natural Resources Agency for the preservation and revitalization of a historic LGBTQ plus venue that will advance economic development in the Castro neighborhood during the grant period of April 1st, 2026 through December 31st, 2027.

Madam Chair.

Thank you.

And colleagues, we this is an item that we continue from last week at the request of the Office of Economic and Workforce Development, because we understand we understood that there were additional conversation with the state agency was that was necessary before we can move this item forward.

So this item is before us again today, and we again have the Office of Economic and Workforce Development.

Thank you.

Good morning, Chair Chan, members of the committee.

Ben Van Houten from the Office of Economic and Workforce Development.

Um I don't have a formal presentation, but I'm happy to answer any questions.

Um we are requesting some amendments to this resolution that I would be happy to read into the record.

Please.

So on uh page one line one after in the castro, inserting castro theater on page one line five after preservation and revitalization of inserting the Castro Theater on page one line six after historic LGBTQ plus venue, uh striking that will and inserting to help on page one lines ten and eleven, striking a historic LGBTQ plus venue and inserting the Castro Theater and striking that will and inserting to help, and then on page one line 13 inserting the following two whereas clauses, whereas the Castro Theater is a historic building serving and welcoming all of San Francisco's residents and visitors, and whereas all individuals, LGBTQ plus and allies alike will benefit from preserving and revitalizing this iconic and historic landmark and thank you.

And I'm available for any any questions or any additional discussion on this item.

Thank you.

I think colleagues like last week.

I think we I think what is before us today is that now we're clear uh about where this um fund will be going toward uh actually a specific venue um instead of uh it was unclear to I think us and probably the state agency too.

I think that now we have identified with um that we are able to allocate this to the casual theater and so with that let's go to public comment on this item.

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

That was your opportunity, madam chair.

We have no speakers.

Seeing no public comments, public comment is now closed.

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

Uh Madam Chair, there were amendments offered on the floor.

My apologies.

Um first I would like to move and amend the item as proposed by the Office and Economic and Workforce Development and move the amended item to full board with recommendation and a roll call, please.

And on that motion uh to amend uh the resolution as so offered by the department, and to refer that resolution to the full board with the recommendation as amended.

Vice Chair Dorsey, Dorsey, aye.

Member Sauter, solder aye, Chair Chan.

Aye, Chan, I we have three ayes.

The motion passes.

Thank you.

Um Mr.

Clerk, please call item number five.

Yes, item number five is an ordinance appropriating approximately 1.1 million of ambulance billings and approximately 426,000 of fire overtime service fees revenues in the fire department, deappropriating permanent salaries of 500,000 in the department of emergency management.

Permanent salaries of approximately 6 million and dependent coverage of approximately 994,000 in the fire department, and permanent salaries of one and a quarter million in the public utilities commission and appropriating 500,000 to overtime in the Department of Emergency Management.

Approximately 8.6 million to overtime in the fire department and one and a quarter million to overtime in the PUC to order uh in order to support the department's protected increases in overtime has acquired by the uh administrative code.

And this ordinance requires a two-thirds vote of all members of the board for approval how the fire department's appropriation of approximately eight million pursuant to the charter.

Madam Chair.

Thank you.

And today, I believe we have multiple departments here.

Um I will defer to you how you want to go through your presentation, and then we'll go to the BLA.

Thank you, Madam Chair.

Good morning, supervisors.

Uh I'll start it off because I think we have the biggest portion of this request.

Um Mark Corso, Deputy Director of Finance over at the fire department here to speak on our portion of this.

Um the department is requesting a reallocation of existing revenue and existing expenditure authority, uh, not any additional funding overall to comply with the city's admin code as it pertains to overtime.

Uh there's three main areas of overtime reallocation in this legislation for us.

Uh, the first is general uh operations, field operations.

The second is fire prevention, and the third is uh operational uh staffing over at the airport.

And I'll address each of those briefly.

Um for overall general operations.

Uh this is a frontline uh fire EMS community paramedicine uh divisions every every year.

We work at the mayor's office on uh our overall staffing level assumptions on levels of staffing, retirements, and leave.

And so that's an ongoing negotiation that we have.

And during the course of the year, things pop up uh that some of that those assumptions may not come true.

Um but overall, staffing wise, overall budget wise, I should say, we do have whether it's in regular salaries or overtime, we do have sufficient funding to cover that.

Uh, and so this is a reallocation from uh permanent salaries uh to cover that uh difference in overtime.

On the fire prevention side, we are uh our inspectors do off-hours exp uh inspections, uh reviews, uh, fire planning exercises, uh, you know, standbys for certain events as required by the fire code, and those members are uh paid overtime, but these requests are done at the request of a customer, so there is fee revenue associated with them.

In the current year, we've seen uh both the assumptions of expenditures and as well as revenues increase over what was assumed in the budget, just the overall volume and activity level has increased.

So we're requesting to reallocate some of those excess revenues to cover that uh overtime allocation.

And the airport is uh part of the fire department.

The fire department has a presence with three stations over the airport.

Uh in order to work at the airport, uh, there are a number of uh additional trainings and certifications you need from the federal government.

So it's not as if we have sufficient staff we can just move over to cover a shift uh on a regular day-to-day basis.

Uh in many cases, we need to recruit and get those folks uh up to speed.

In the case of the current year, our staffing levels there uh are a little lower than anticipated, which has resulted in a little more overtime use uh than regular salaries, but we're currently working with the airport and our folks down there uh with a cadre of people going through the required trainings.

So we are always uh planning ahead with retirements and things like that to ensure that we have properly staffed levels at the airport.

Um, just before I uh open up for any questions, I just wanted to talk to overtime in general in the fire department, just in totality.

Um coming out of COVID, we saw huge overtime issues, uh both from unable being unable to staff and uh backfill uh you know, separations and retirements uh just to increase levels of leave due to the pandemic.

Uh coming out of that, with support of grant funds, with support from the mayor's office and with support from the board of supervisors, we've done quite a bit of work to get to a much healthier staffing level uh to the extent that where we are today, we are in a much better spot uh with additional personnel, which helps on a day-to-day basis, but also helps when we're deployed for mutual aid for other, you know, special events, those kinds of things.

So just as a as a total dollar comparison in fiscal year 2122, uh the fire department expended 76.1 million dollars in general fund overtime.

Uh and the current year, just on a comparison of dollars, uh, we're down to approximately projected $54.7 million dollars, which is a 28% reduction.

Um, but when you factor in uh 2021 22 dollars, and you take out any uh wage increases, things like that.

Uh that reduction is approximately 39 percent over the past five years.

So that's a significant improvement that we've seen.

Uh it helps the morale, it helps overall health of our staffing level, and it helps day-to-day operations.

So happy to answer any questions on this.

Thank you.

Um, do we have a Biaway report on this?

We do.

Item five is an ordinance that changes appropriations in three departments to increase uh their overtime accounts.

Uh the three departments are emergency management, fire department, and the PUC, and we summarize the changes on page 11 of the report.

You'll see DEM is getting an additional $500,000 in their overtime account from uh salary savings from vacancies.

The fire department's getting $8.7 million from salary savings and also from unbudgeted revenue.

Uh and the PUC is getting about 1.3 million dollars.

Uh we recommend approval.

Thank you.

Um, my assumption is we don't have additional presentation from other city departments.

I don't have additional questions at the moment.

Um I think that we are aware, we've been aware for the last two fiscal years about the overtime spending and how we actually have to um allocate funding and call like from saving to to actually offset these costs.

We'll have these discussion during budget.

And um it is gonna be an interesting one, um, to say the least.

So with that, let's go to public comments on the item.

Thank you.

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

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

Madam Chair, we have no speakers.

Seeing no public commons, public comment is now closed.

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

And on that motion to refer to the full board with the recommendation of Vice Chair Dorsey.

Dorsey, aye.

Member Sauter.

Solder, I, Chair Chan.

Aye.

Chan, I we have three ayes.

The motion passes.

Thank you.

And Mr.

Clerk, please call item number six.

Yes, item number six is a resolution authorizing the execution and delivery of multifamily housing revenue notes in one or more series in an aggregate principal amount not to exceed 30 million for the purpose of providing financing for the construction of a 94 unit multifamily rental housing project known as 1687 market residences, approving the form of and authorization uh and authorizing the execution of the following.

A funding loan agreement, uh providing the terms and conditions of the construction loan from the funding lender to the city, and the execution and delivery of the notes, a borrower loan agreement providing the terms and conditions of the construction loan from the city to the borrower, and a regulatory agreement and declaration of restrictive covenants for the project, authorizing the collection of certain fees, approving for purposes of the internal revenue code of 1986 as amended the issuance and sale of residential mortgage revenue notes by the city in an aggregate principal amount not to exceed 30 million, approving modifications, changes and additions to the documents, ratifying and approving any action heretofore taken in connection with the funding loan, the borrowing, the borrower loan, the notes and the project, and granting general authority to city officials to take actions necessary to implement this resolution, hand-related matters as defined.

They're read.

Madam Chair.

Thank you, Mr.

Clark.

Um, so with that, we have Mayor's Office of Housing and Community Development here.

I'm just trying to get my presentation up.

I apologize.

No worries.

My apologies.

Thank you so much.

My name is William Wilcox.

I'm the housing finance manager at the San Francisco Mayor's Office of Housing and Community Development.

I manage our tax exempt bond issuance program, which is our involvement with this project, 1687 Market Street, just a few short minutes away from here.

This project is only asking for tax exempt bond issuance.

There's no city subsidy going into this project.

It is funded largely through a charitable donation.

So we have no subsidy, but we are the bond issuer.

We will be a regulator, we will be involved in the leaseup, and so it's a great opportunity to generate a lot of affordable housing in the city for artists that at no cost to the city.

So it is a hundred percent affordable housing.

The Arts Commission, and we have Sarah Hollandbeck from the Arts Commission here with us as well, is going to be handling the artist certification process.

So it will be a priority for artists, and people will pre-qualify as artists, so it makes it easier to do that lease up.

The development sponsor is Mercy Housing, Fiona Ruddy, the project manager from Mercy, is here, and it's in collaboration with Artists Hub on Market, who operate the art spaces in the building.

So it'll be 94 units of affordable housing at the property, all at 80% San Francisco OAMI and below.

And then we have some relatively deeply affordable units as well.

So there's a good range across it.

Um the project includes a community room with kitchen, uh landscape roof deck, secured bike parking, um, and practice and rehearsal spaces for music and dance, as well as an eighty-eight-seat weight black box theater, um, and programmatic space for artist hub on market.

Uh the financing, it's about 90 million dollars in total, vast majority, 50 million is coming from the philanthropic lender, small permanent mortgage from Century of 3 million, 30 million dollars in tax credit equity, so this bond issuance.

Um this is a conduit tax exempt bond issuance.

So the city takes on no um risk from this.

It's basically that we issue it, and that's how it gets this tax exempt status, which is what qualifies it for the tax credits.

Think of it as us sprinkling a little magic tax dust on it, and then you get the credits, which makes this all feasible.

Um, and then the $2.5 million in deferred developer fee, which is just cash flow paid to the developer over time.

We are gonna begin construction in June of 2026, um, and be done by February of 2028 and be leasing up uh that same year and all done by then.

And we already have our tax credit, our taxes and bond tax credit award.

So this is really the last step before we close and start construction.

I'm in happy to take any questions as well as my colleagues from the Arts Commission and Mercy Housing.

Thank you.

Look forward to seeing this being done.

And with that, I don's go to public comments on the roster.

Yes, if we have any members of the public who wish to address this committee regarding this item number six, now is your opportunity.

Madam Chair, we have no speakers.

Seeing no public commons, public common is now closed.

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

And on that motion to refer to the full board with a recommendation, Vice Chair Dorsey.

Dorsey, aye.

Member Sauter Sauter.

Chan, I we have three ayes.

The motion passes.

Thank you.

And Mr.

Clerk, I would like to call items seven and eight together.

Yes, item number seven and eight are resolution to retroactively authorizing the Department of Public Health for the following.

Item number seven is to accept and expend grants from July 1st, retroactively approving the grant agreement between the city, acting by and through uh the Department of Public Health and the California State Water Resources Control Board for the purpose of collecting bay and ocean shoreline water samples for pathogen analysis for a term of three years from July 1st, 2025 through June 30th, 2028, and for a total not to exceed amount of approximately 87,000.

Hence, authorize the director of public health to enter into amendments or modifications to the grant agreement that did not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the grant agreement.

And item number eight uh retroactively uh authorizes uh the department to accept and expend the grant in the amount of one million from the California Department of Health Care Services for participation in a program entitled uh Department of Health Care Services grant or DHCS grant for San Francisco Chinese Hospital to support the new oncology clinic and chemotherapy center at the Chinese hospital from July 1st, 2025 to December 31st, 2026.

Madam Chair.

Thank you, Mr.

Clerk.

I am still expecting the Department of Public Health to present these items one at a time.

Thank you so much.

Thank you.

Good morning, uh Board of Supervisors.

Uh I'm Douglas Obana, work with environmental health as part of the public health department.

Um this is for a grant from the California State Water Resource Board for us to continue ongoing testing of public waterways in San Francisco that are near discharge points in events of heavy rainfall or storms where water might overflow into public waterways, so that we can make sure that uh it is safe for uh the citizens of San Francisco to enjoy the water.

Um this is for eighty seven thousand dollars from the state.

It's going to help pay for partial time of one employee to do testing once a week in the bay and or the ocean side.

And uh this is from July 1st, 2025 until June 30th, 2028.

This is a continuing grant that's been going on.

We've been doing this testing for many years now to ensure safe waterways for San Francisco.

Um, yes, this is a retroactive authorization and information here as well, too.

Uh but I'm here to answer any questions that you might have regarding this uh grant.

Thank you.

Uh, where is the uh pathogen analysis post?

Is it posted anywhere?

How is it published?

It's posted on the website, it's on the SFPUC's website.

We upload everything to on there.

If there are any of the beaches do have high water counts, they go out and we post signs that say the water is not safe, and when uh it is retested on a daily basis thereafter, and once the water is back to acceptable quality, the signage is removed.

Thank you.

Uh and we're ready for item number eight.

Good afternoon, supervisors.

I'm Lily Conover.

I'm the controller at DPH, and we're here today to request retroactive approval to accept and expend a one-time grant of 1 million dollars from the state of California.

Uh this grant comes from Senate Bill 105, passed by the California Senate in September 2025.

This funding is distributed to DPH by the California Department of Health Care Services for the purpose of supporting the new oncology clinic and chemotherapy at the San Francisco Chinese Hospital in 2025-26.

While this funding is allocated for Chinese hospital, the Senate bill has specified for the funding to go through the city and county of San Francisco.

Therefore, 100% of this funding will be routed directly from the city to Chinese hospital.

Upon approval of this resolution, the Department of Public Health will execute a grant agreement with Chinese hospital to transfer the full amount.

And now I'll turn it over to Michael Chung, Chief Executive Officer at Chinese Hospital to give you more background.

Thank you.

Good morning, Supervisors.

This is this grant is really supported by the state.

That we have asked their support to actually put a permanent home of our infusion and chemotherapy centers.

Currently we are suspending our acute care beds to be the temporary infusion center with the support of this bill and all other fundraising activity.

We are aiming to start construction and have a new permanent home for our infusion centers.

We project about five million dollars.

And and but at this moment you do not have funding for that five million.

We actually have roughly 3.5 million now.

That you have raised to build the center.

Correct.

And so as you accept this one million dollars, my assumption is for operation?

Um no, for the whole remodeling of the center.

So the one million dollars is the one million dollar grant is actually for the construction of the center.

Correct.

And so that is right now you have three volume five million.

And so with this additional is 4.5 million.

Correct.

Um and with the expectation of you still have to raise additional $500.

Correct.

Um, and then you will, how what is the timing and the timeline to build a center?

We have started drawing, so we expect to start a construction probably Q3, Q4 of this year.

And it may take about to one to two years of a remodeling of the existing um building.

And what is your projection operation fund, both in source and projected budget for this center?

We expect to be break even, especially this is the current ongoing um infusion center already.

This is just to find a new home that is more suitable for uh effusion patients with a better um room flows, dedicated private room uh with the consultations and have a separate waiting room and also registration area.

And is the center my assumption the center is on site at the Jackson Street at Chinese hospital?

Correct.

You will be on the second floor of the 1979 building.

And then so your renovation goes towards the existing building.

Correct.

Okay, thank you.

Um I don't have any additional question.

Um, and so with that, uh let's go to public commons on these two items.

Yes, we're opening public comment for both these items seven and eight.

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

Seeing no public commons, public common has now closed.

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

And I'd have motion to refer both resolutions to the full board with recommendation, Vice Chair Dorsey.

Dorsey, aye.

Member Sauter Sauter, solder, I chair Chan.

Aye.

Chan, aye.

We have three ayes.

The motion passes.

Mr.

Clerk, can you please call items nine and ten together?

Yes, item numbers nine and ten.

Our resolutions approving the second amendment to the grant agreements between tenderloin housing clinic Inc.

and the Department of Homelessness and Supportive Housing, extending both terms by 36 months from June 30th, 2026 through June 30th, 2029, and authorizing HSH to enter into any amendments or other modifications to the respective amendments that do not materially increase the obligations nor liabilities or materially decreased the benefits to the city and are necessary or advisable to effectuate the purposes of the respective agreements.

Item number nine is for the Abigail housing ladder program and increasing the agreement amount by approximately 5.5 million for a new total amount not to exceed approximately 15.5 million.

And item number 10 is for support services, property management, and master lease stewardship at the Garland Hotel, and increasing the agreement amount by approximately 7.3 million for a total amount not to exceed approximately 17.3 million.

Madam Chair.

Thank you, Mr.

Clark.

And with that, uh we have Department of Homelessness and Supportive Housing here.

Good afternoon, Chair.

Nice to see you all.

Emily Cohen with the Department of Homelessness and Supportive Housing.

I'm before you today with several resolutions, but we'll start with the Abigail Hotel.

This is a resolution that would authorize the Department of Homelessness and Supportive Housing to enter into an agreement with Tenderloin Housing Clinic for operations of the Abigail Hotel.

And this agreement was heard by the homelessness oversight commission in April.

The resolution approves the second amendment, extends the term to June 30th, 2029, and increases the not to exceed amount to 15,496,140.

The Tenderloin Housing Clinic has been operating the Abigail Hotel since 2021.

It has 61 units of permanent housing.

In the last fiscal year, the program serves 66 individuals, the vast majority, 70% are over the age of 55.

The housing ladder program is a smaller portfolio within our permanent housing program, and it essentially allows people who have done very well in permanent supportive housing who no longer need the intensity of the support services there to move into a lighter touch environment.

So while there are still on-site staff, it has a it's a lighter case management program and more independent living on site.

And has been a really positive addition to our portfolio in terms of having a place for people to move up to that gives them more independence while making permanent supportive housing units available for people in immediate need.

Thank you.

Items nine and 10 are two resolutions that approve amendments to HSH grants with Tenderloin Housing Clinic that extend both agreements through June 2029.

One is for the Abigail Housing Ladder program, and one is for the Garland Permanent Supportive Housing Program, and they're both in the tenderloin.

The these are existing programs.

So we reviewed the performance of the contract as you can see the summary of the outcomes on page 20 of the report.

You'll see that the programs are largely meeting the objectives of the contract, except that both sites didn't exceeded the turnaround time for turning over units after they were vacant.

There's a goal in the contract to do that within three weeks.

The outcomes were higher by uh 75 and 120 days, or excuse me, 180 days for both sites.

Those numbers are slightly inflated because it sounds like uh THC started the clock too early when determin when calculating the turnaround time.

So we think that they're still above the 21-day turnaround, uh, but perhaps not as high as the performance data we reviewed indicates.

You can see the budgets for these uh contracts on pages 21 through 23 of our report.

The Abigail Hotel is 2.1 million dollars a year, funded by proposition C revenues, and the Garland Hotels, 3.9 million dollars a year, funded by the general fund and federal funds.

Um recommended recommending approval of both resolutions.

We also are noting as a policy consideration, you know, these are the city over time would benefit from owning buildings rather than renting them over a 10 to 20 year period.

Um there's financial savings in doing so.

There's not um a lot of funding in the capital plan to make those acquisitions, however.

Thank you.

Um we appreciate it inclusive of some of these photos of the site.

Um supervisor souter.

Thank you.

Um, and for THC and or HSH, um, just to dig into the performance monitoring results a little bit.

Um, you know, we heard about the turnover, maybe why that was inflated and why that would be so high.

Um, but what about the particular metrics that just don't have data?

What's what's happening there?

Particularly the review of individualized service plans is missing, as is the um lease violations resolution.

Uh thank you very much, supervisor.

So these are follow-up items from our monitoring that we will be working with the provider to collect as noted in the program evaluation or program monitoring.

These are objectives that need to be met, and we've been working with THC to get those resubmitted to the department so that we have them on the record on record and ensure that they continue to be in compliance.

In terms of the turnover units, this is a challenge across our portfolio.

Um we have a less uh just under 400 vacant units that have been on that are 400 vacant units that need to be turned across our entire portfolio.

And this is the lowest number it's been in quite a while, but something we're really striving for in partnership with our providers.

We've been offering $10,000 per unit uh grants to help bring online units that have excessive damage.

We do find in some of our buildings, particularly those that serve our highest acuity population, that some of the units are damaged in a way that takes more than 21 days to repair.

So we want to make sure folks have the resources, especially when it goes beyond sort of what's expected or budgeted to turn a unit.

Okay, thank you.

And Supervisor Chan, I didn't present on the Garland.

I don't know if you want me to or feel comfortable with it.

Okay, please.

Sure.

So the second item before you today is a lease resolution for the Garland Hotel.

This resolution would approve the second amendment in the grant agreement between the city HSH and Tenderloin Housing Clinic Clinic.

It would extend the term by 36 months and increase the not to exceed amount to a total of 17,340,000.

This amendment was heard and approved by the homelessness oversight commission in April.

The Garland Hotel or this contract within the for the Garland Hotel funds, the lease stewardship support services and property management, all provided by a single provider at the hotel.

The this is a relatively new hotel to our portfolio, and it is a I would say what makes it unique is the rooms are quite sizable in comparison to some of our other programs, and most have private bathrooms and kitchenettes.

So it's a very desirable pro uh property within our portfolio and has been a real welcome addition to the homeless response systems when we wound down the Baldwin, which was an under performing permanent supportive housing unit building.

We were able to convert that to a shelter and move the tenants to the garland, and have had positive outcomes since then.

As I mentioned before, the Garland served 79 unique individuals in the last fiscal year, and over 50% of those folks are over the age of 55.

So our PSH is really meeting a need of older adults in our community.

Again, including some photos, the shared laundry facility, as well as the private baths and studio units with the kitchenettes.

And Tabitha and I are available for questions.

Thank you.

I don't see any uh name on the roster at the moment, and let's go to public commons on these two items.

Yes, we're opening public comment for both these items nine and ten.

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

Seeing no public comment, public comment is now closed.

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

And on that motion to refer resolutions uh with recommendation.

Vice Chair Dorsey.

Dorsey, I member Sauter, Solder, I, Chair Chan.

I.

Chan, I we have three ayes.

The motion passes.

Thank you.

And Mr.

Clerk, um, please call item 11 and 12 together.

Yes, item numbers 11 and 12 are resolutions approving the second amendment uh to the following uh agreements.

Um item number eleven is a second amendment to the contract agreement between the five key schools and programs and the department of homelessness and supportive housing for the provision of Ellis semicongregate shelter extending the terms uh 24 months from June 30th, 2026 for a total term of December 15, 2022 through June 30th, 2028, increasing the agreement amount by approximately 12.2 million for a new total amount not to exceed approximately 39.5 million.

Item number 12 is a resolution uh approving the second amendment to the grant agreement between the community forward SF.

How far housing support services, property management, and master lease stewardship at Coronado Hotel, extending the term by 36 months from June 30th, 2026 for a total term of January 1st, 2021 through June 30th, 2029, and increasing the agreement amount by approximately 6.8 million for a new total amount not to exceed 16.6 million, and both resolutions uh authorizes um HSH to enter into any amendments or other modifications to the respective amendments that do not materially increase the obligations or liabilities or materially decrease the benefits to the city and are necessary or advisable to effectuate the purposes of the agreements, madam chair.

Thank you.

And since both items have BOA report separately, let's do one item at a time in presentation and then BLA and then back to the presentation for item 12 and then BLA report.

Wonderful.

Thank you again, Chair Emily Cohen with the Department of Homelessness and Supportive Housing.

I'm before you today with a resolution that would authorize HSH to continue shelter services at the Ellis Street semi-congregate shelter.

This agreement was heard and approved by the homelessness oversight committee in April.

Commission, excuse me, in April.

The second amendment would extend the term by 24 months and would increase the not to exceed amount to 39.6 million dollars.

This amendment would continue to fund operations and supportive services at the semicregate shelter on Ellis Street until the site is converted to permanent housing.

This shelter program uh serves approximately 134 individuals every night.

Uh Meals on Wheels provides two meals a day on site.

The Department of Public Health provides their shelter health services.

And in the last fiscal year, five keys served 388 unique people at the Ellis Street shelter.

The cost per bed is approximately $130 dollars per night per person.

685 Ellis Street was originally a shelter-in-place hotel that we leased during the pandemic, has 69 double occupancy rooms within you in unit bathrooms.

It's been a very effective uh tool for addressing encampments.

It's a desirable and attractive building.

Uh, we have also worked with five keys to add ambassador services in front of the building to help ensure that we're being a good neighbor and addressing any concerns that have come up from the community.

And the site is scheduled to transition to permanent supportive housing in line with our home key agreement with the state in 2028.

So again, some pictures.

Ellis shelter the Ellis Street Shelter has a beautiful lobby with a nice balcony.

You can see here in the pictures, private bathrooms and in the rooms.

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

I'm also joined by Brandy Marshall from Five Keys, their programmatic questions.

Item 11 is a resolution that would approve an amendment to the HSH agreement with five keys.

Extending the agreement through June 2028.

We showed the performance of the contract on page 28 of the report.

Five cases largely meeting the goals of the contract.

And you can see the budget for the contract on page 30 of the report.

This is a 6.34 million dollar a year program, funded by a mix of a state grant for the most part, as well as general fund funding for community ambassadors or street ambassadors that were added in September 2025, and that the department is proposing to extend for the next two years to address uh neighborhood concerns around street conditions.

That proposal is part of the department's uh budget proposal that's pending at the mayor's office and maybe part of the uh budget that you review uh in June.

But we do recommend approval of item 11.

Great.

Emily Cohen again, Department of Homelessness and Supportive Housing.

My final item before you today is a resolution that would authorize HSH to enter into a second amendment to the agreement with Community Forward for operations of the Coronado Hotel.

This item was heard and approved by the homelessness oversight commission on April 2nd.

The second amendment would extend the term of the agreement with community forward to June 30th, 2029 and increase the not to exceed amount to approximately 16.7 million dollars.

Based on recommendations from the BLA, we are gonna pare down this contract to a one-year extension, and I can read the amendments into the record at the end of the presentation.

This agreement funds community forward San Francisco to operate the Coronado Hotel, which is 65 units of permanent supportive housing that has been active in our community since 2025.

Community Forward provides both the property management and the on-site support services, and last fiscal year served 78 adults at this program.

The population served here are formerly homeless adults without children.

Community forward prides themselves on providing trauma-informed services, particularly in property management and case management, including focus on benefits and housing stability support, wellness, and community groups and social gatherings.

The Coronado creates long-term stability.

The average tenant has lived at the coronado for over five years, and there were zero evictions in the last fiscal year.

Given the corrective action that is open between HSH and community forward, we have accepted the BLA's recommendation to reduce the grant extension to one year.

Sorry, and that would bring the uh sorry that would we would need to amend the resolution to do that.

And if the chair would like, we've submitted the red line version to the clerk and the chair, but happy to read that into the record.

Please read that the dollar amount changing.

Great.

So we would be amending page one line nine and page two line 15 to decrease the amount added to 2, 11, 556 for new total not to exceed amount of 11 million 907,000 978 dollars.

This is on pages one, line two and nine, and pages two, page two, line sixteen.

And then amending page one line seven and page two, line fourteen to shorten the proposed extension to 12 months rather than 36 for a new total term concluding in 2027 as reflected on page one line eight and page two line fourteen, and happy to take any questions.

I'm also joined sorry by community forwards co-executive directors who are here to help respond to questions.

Good morning, supervisors.

Christina Malamot from the budget and legislative analysts office.

The proposed resolution would amend an existing agreement between HSH and community forward for support services, property management, and masterly stewardship at the Coronado Hotel, a permanent supportive housing site to extend the term uh by three years through June 2029.

Um exhibit three on page 38 of our report shows the basis of the not to exceed amount.

The annual cost of the program is 2.1 million.

It's funded by the general fund and proposition C.

We could not evaluate program performance due to data and unreliability in the most recent program monitoring and um lack of data in the prior two years.

Um therefore we're recommending a one-year extension rather than a three-year extension to allow HSH to improve its program monitoring and to report back with an update to the board next year.

Um therefore we're recommending a reduction in the not to exceed amount consistent with what the department just read into the record um and approval of the proposed resolution as amended.

Thank you.

Um I think my it's uh overall comment and not necessary to these two items nor the two items before is that you know what I'm noticing is they are all grand amendments agreements amendments and contract uh agreements amendment um and the extension varies between you know here's 2027 and then up to 2029.

Um, you know, I think that HSH is still going through the process of um reprocure majority of your leases and agreements.

Um, how is that process going?

Thank you, Chair Chan.

I know I've been before this committee talking about reprocurement for some time.

We have a multi-year procurement plan that has started.

We've re-procured some of our TAE programming under that purview, and we look forward to continuing the rest of it.

Given Director McSpadden's impending pending retirement, uh we have paused the reprocurement schedule to allow for our new director to come in in June and to inform that process more thoroughly.

We have a robust timeline.

These grant agreements and contract amendments are all intended to extend into the reprocurement.

So we're hoping to maintain that timeline, but we also want to give the new director an opportunity to put his stamp on the reprocurement.

Undership.

Thank you so much for that explanation.

And so with that, colleagues, let's go to public comments on these two items.

Yes, we're opening public comment for both these items 11 and 12.

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

Seeing no public comments, public comment is now closed.

Colleagues, I would like to first move item 11 to full board with recommendation and a roll call, please.

And on a motion to refer item 11 to the full board with recommendation, Vice Chair Dorsey.

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

Aye.

Chan I, we have three ayes.

The motion passes, and I would like to move to amend item 12 as proposed by the department and send the amended item to full vote with recommendation and a roll call, please.

And on that motion, uh to accept the amendments as so offered by the department.

And to refer the resolution to the full board with the recommendation as amended by Chair Dorsey.

Dorsey, aye.

Member Sauter.

Sauter, aye.

Chair Chan.

Aye.

Chan I, we have three ayes.

The motion passes.

Thank you.

Mr.

Clerk, please call item number 13.

Yes, item number 13 is a resolution approving and authorizing the director of property on behalf of the drug market agency coordination center to execute a lease with 33 8th Street LLC for a portion of the real property located at 33 8th Street for a term of eight.

Oh, sorry, uh for a term of 10 years, had four months, had an initial annual base rent of approximately 448,000 with three percent annual increases.

Effective upon approval of this resolution, and the mayor, and upon execution uh by the director of property and authorizing director of property to enter into amendments or modifications to the lease that did not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the lease or this resolution.

Madam Chair.

Thank you.

And today we have the police department here.

Good afternoon, madam chair, members of the committee.

Uh Chris Canning, uh, with the police department.

Uh I am here as the captain of the administration bureau.

All of the uh police facilities are one of my responsibilities.

I'm joined by my colleague at the real estate division, uh manager Jeff uh Suisse, as well as uh Commander uh Hearn uh who uh commands the uh DMAC.

I'll give a brief presentation about the uh operation of the uh DMAC, the drug market agency coordination center, uh and then Mr.

Suisse will go into particulars uh about uh the uh lease terms uh and then we'll be available for questions uh for of the committee.

We are here to seek your support uh for this move.

A bit of background, uh madam chair, members of the committee.

Uh the drug market agency coordination center was kicked off uh in 2023 by the police department as a combined effort to uh tackle some of the uh sophisticated and complex challenges uh of the mid-market area.

There are a variety of city departments uh that the police department coordinates with on a daily basis.

The uh proposal before you is uh a request for the location to shift um to a more uh a more appropriate uh facility for these uh enforcement uh and coordination uh operations.

Uh I will say that uh the length of the drug market agency coordination center has been the mid-block of uh 1100, the mid-1100 block of market street between 7th and 8th streets.

This location that we're looking to move to will serve a number of functions and will allow for the nimble response from the uh agency coordination center to meet the needs of the the uh quickly modifying street conditions in the mid-market area.

This is going to be a 24-7 uh operation.

Uh and with that, uh Mr.

Suisse, if I could trouble you to go over the particulars of the lease, and we'll be available for questions committee.

Thank you.

Absolutely, thank you.

Um, before you do so, if I may interrupt my apologies, I think if I understand that correctly, the supervisor Dorsey needs to recuse himself and then this item.

If I could, I would like to make a I've been advised that um because this is a I am the uh my landlord is the landlord for this project, and I've been advised that I should recuse myself, and I have to uh actually I have to leave anyway, but if I could have a motion to recuse uh me.

Understood.

Uh I would like to move to recuse Supervisor Dor Vice Chair Dorsey on this item and the roll call, please.

And on that motion, uh to excuse uh Vice Chair Dorsey from voting on this uh on this item.

Uh member solder solder aye, Chair Chan.

Aye.

Chan, aye.

We have two ayes.

With Vice Chair Dorsey.

Excuse.

The motion passes.

Thank you.

Uh and with that, my apologies.

Please continue.

Uh good afternoon, Chair Chan, Supervisor Sauter.

Um, as uh Captain Canning uh described, we're looking to, we're seeking your approval of relocating the DMAC facility.

They're currently in the eighth floor of 1145 Market Street.

We would be moving them to 8th Street, not far away.

Is more appropriate for law enforcement, including a lot of features that would you that are unique to a law enforcement build-out.

The lease term, the lease is 448,224 per year.

It is a term of 10 years and four months.

So approximately a three million dollar build out because it requires hardening.

It requires ballistic glass, ballistic panels, a secure steel encased armory for firearms and safety along those lines, lockers, and uh it has a unique feature that there are elevators within the units themselves that drop directly one floor down to the parking garage.

So access to their vehicles becomes a much quicker um much quicker.

Um the first couple of years of this, we also have uh rent abatement in the amount of uh two months for uh the first two years of the lease.

That was to keep it revenue neutral going forward with the challenges that we all have in the budget.

So that's uh hoping you approve this.

Uh let me know if you have any questions.

Thank you.

The proposed resolution would approve a new lease for approximately 11,000 square feet of ground floor retail space at 338th Street for a term of 10 years and four months.

Uh, the leases for the drug market agency coordination center or DMAC, which is staffed on a 24-hour basis by uh approximately 70 dedicated staff from the police department, 10 from the sheriff's department, and two from the Department of Emergency Management.

DMAC is currently located at lease space on the eighth floor at 1145 Market Street, but they need uh they require a new lease because DPH is planning to move uh staff from 101 Grove Street and 1380 Howard into that space, and further they require uh lease space on the ground floor for easier access to their fleet vehicles.

Exhibit two on page 44 of our report shows the total lease costs which are approximately 5.7 million over the total term, including rent and operating costs.

Um it's funded by the general funds.

Annual cost in year one is approximately approximately 411,000, increasing to approximately 426, 526,000 in year three when rent abatement ends.

Um it's the cost is comparable to the existing lease in the first two years during rent abatement, but when rent abatement ends, the cost is about 20 percent greater starting in year three or about 88,000.

Um we note in our report that as a cost-saving measure, the city could let locate DMAC staff in existing city-owned space because when DMAC was formed, it was formed with existing staff that were located in city-owned facilities.

Um, but we are recommending approval of item 13.

Thank you.

Um, this transitions and just thinking about relocation of operations.

I'm just kind of curious overall where SIPD is with its operation be sought in addition to DMAC.

Maybe maybe maybe um Captain Kenny is not the person to answer it.

Does but I certainly hope that you can kind of inline us a little bit of what um SFPD overall strategy and thinking not just about DMAC, but also Arctic and overall um the capital needs of the department.

Yes, thank you.

Uh for the question, Madam Chair, and all that Commander Ahern uh correct me if there are any things that I misspeak on, but overall uh the broad strategy from the police department uh is uh tethered I think to the needs of specifically uh the mid-market area, and one of the benefits of this um actual uh facility and the length of the lease.

Um one thing the police department schools are to do is to stabilize the area to provide the space uh and the ability for uh positive activation to fall in on the back side.

So I think this uh transition is consistent with city goals to provide uh the uh not only the stability, the vitality of the mid market area.

Um and and broadly speaking, this is the uh police department's commitment to that effort.

Uh the Arctic, I can't speak um uh to uh that as it relates to this, but I can't say overall uh the police department's goals are to uh consolidate uh the operational uh needs and the facilities to uh both meet the demands of the department uh the demands of the community uh but also consolidate a lot of the uh disparate uh operations that um that that uh that we have today.

And when you mean consolidation, do you mean consolidation of the physical locations or consolidation of operations?

Um in as much as it's possible both.

Uh however, in this instance, the uh operation uh of the uh DMAC location, while it is separate initially, as I can speak to this uh particularly just in my own anecdotal uh personal experience when I was the captain of Tenorloin uh in 2021 to 2022.

Um we went through an effort where the uh individual station uh attempted to meet uh the the very significant needs that the mid-market area required and um this uh iteration with um having a dedicated staff allowing the uh district station operations to continue separate from the very specific needs of this particular uh area.

Uh we found this to be a much more effective um strategy.

Uh I think the period of the lease is consistent with the uh goals of the department to uh stabilize and improve the mid-market area, and uh in terms of consolidation, that's what I'm uh speaking to.

Thank you.

I look forward to if you could relate this back to your team, um, is that we look forward to this budget process from SFPAD to articulate a vision uh and a strategic plan around capital planning overall, with the understanding that even Arctic's lease is up by the end of this year, calendar year by December 2026.

I'm nervous for the department, frankly.

Um I think it's good to see that you know, with the evaluation of the budget and legislative analyst that DMAC has a permanent, well, a 10-year space um for the next decade.

But I am nervous and I am eager to learn more about SFD's vision and projected uh plan for Arctic and combination of like how this would work to be part of the DMAC um and and all your other capital like needs over all the next decade.

Thank you, madam chair.

Thank you.

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

Yes, we're opening public comment for this item number 13.

If we have uh 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.

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

And on that motion to refer to the full board with recommendation, member Sauter solder, I chair Chan.

Chan, I we have two ayes with Vice Chair Dorsey excused.

The motion passes, and thank you.

And with that, Mr.

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

Madam Chair, that concludes our business.

Thank you.

And the meeting is your is adjourned.