Budget and Finance Committee Meeting – May 6, 2026: Zoo Loan, Castro Theatre Grant, and Departmental Appropriations
Budget and Finance Committee Meeting – May 6, 2026
The Budget and Finance Committee, chaired by Supervisor Connie Chan with Vice Chair Supervisor Dorsey and Supervisor Sauter, met on May 6, 2026 to consider 13 items. The meeting focused on a proposed $8.5 million loan to the San Francisco Zoological Society, along with routine approvals for disaster funding, a Castro Theatre grant, fire department overtime, affordable housing bonds, health department grants, and multiple homeless services contract amendments. Supervisor Malgar attended for the zoo items. The committee voted on each item, with the zoo loan resolution continued to the next meeting.
Consent Calendar
- Item 1: Resolution authorizing city agents for state/federal disaster assistance funding (passed unanimously).
- Item 4: Resolution for a $5 million state grant to preserve the Castro Theatre, amended to specify the venue (passed unanimously).
- Item 5: Ordinance reallocating approximately $10 million in the fire department, emergency management, and PUC for overtime, funded by salary savings and revenue (passed unanimously).
- Item 6: Resolution authorizing up to $30 million in multifamily housing revenue notes for the 1687 Market Street 94-unit affordable artists housing project, with no city subsidy (passed unanimously).
- Items 7 & 8: Resolutions accepting grants for water quality testing ($87,000) and Chinese Hospital oncology center ($1 million) (passed unanimously).
- Items 9 & 10: Second amendments to agreements with Tenderloin Housing Clinic for the Abigail Housing Ladder program ($15.5 million) and Garland Hotel supportive housing ($17.3 million), extending terms through 2029 (passed unanimously).
- Item 11: Second amendment with Five Keys for the Ellis Street shelter, extending 24 months and increasing by $12.2 million to $39.5 million (passed unanimously).
- Item 13: Resolution approving a 10-year lease for the Drug Market Agency Coordination Center at 33 8th Street, with annual rent starting at $448,224, for a hardened law enforcement facility (passed unanimously; Vice Chair Dorsey recused).
Public Comments & Testimony
Public comment was heard only on Items 2 and 3 (San Francisco Zoo loan). Twenty speakers addressed the committee:
- Support for the loan and new leadership: Union representatives (Teamsters 856), zoo staff (veterinarians, keepers, educators, conservationists), board members, and volunteers cited improvements under CEO Cassandra Costello, including transparency, cost reductions, and strengthened animal care. They emphasized the zoo’s role in education, conservation (e.g., releasing 10,000 amphibians), and community access (free field trips, camps).
- Opposition or caution: Fleur Doors (Panda Voices/SF Zoo Watch) urged rejection, citing a city audit revealing $12 million in unauthorized spending and risks tied to a panda plan under federal investigation. Michelangelo Torres (Animal Commission chair) requested a delay to evaluate the zoo’s response to the audit.
Discussion Items: San Francisco Zoo Loan (Items 2 & 3)
The committee considered two linked items: an ordinance de-appropriating $2.5 million from the open space acquisition fund for an initial loan payment (Item 2), and a resolution authorizing a loan of up to $8.5 million to the San Francisco Zoological Society (Item 3). Key details:
- Presentations: Supervisor Malgar (District 7) introduced the items, highlighting the zoo’s financial crisis—a projected $11.9 million deficit through 2027—and a performance audit with 49 recommendations. Interim Rec Park General Manager Sarah Madeline outlined loan terms: $8.5 million over 10 years, disbursed in four payments tied to milestones (e.g., 10% expense reductions, strategic plan, AZA accreditation, board expertise, quarterly reporting). Repayment would come through reductions in the city’s $4 million annual management fee.
- Zoo CEO Cassandra Costello detailed operational improvements: new promotions that boosted January 2026 attendance to a record, reintroduced education programs, cost savings (pausing raises, reorganizing leadership, saving ~$1 million), and a focus on board governance. She stressed the loan would allow time for a financial turnaround, including a master plan and potential pandas.
- Budget Legislative Analyst (BLA): Nick Menard reported the zoo has $9 million in unrestricted cash but an ongoing deficit. The loan carries no collateral, and the financial plan hinges on pandas boosting attendance from ~600,000 to 1 million annually —a risk. The city would incur $15 million/year if the zoo closed.
- Committee discussion: Chair Chan emphasized worker inclusion, urging union representation on the board and competitive bidding. She requested a joint letter from Rec Park and the zoo detailing a timeline to update the 33-year-old lease/management agreement. Supervisor Sauter praised creative attendance initiatives. Supervisor Malgar committed to continued oversight and revisiting the MOU.
Key Outcomes
- Item 2 (Ordinance): Passed unanimously (3-0) and forwarded to the full Board of Supervisors for May 12.
- Item 3 (Resolution): Continued to the May 13, 2026 Budget and Finance Committee meeting (3-0) to allow public review of the loan agreement and receipt of a joint letter from Rec Park and the zoo on lease agreement updates.
- All other items (1, 4-13): Passed unanimously and referred to the full board (Item 12 was amended to a one-year extension as recommended by the BLA).
- Ongoing directives: Supervisor Chan requested that the zoo incorporate union and animal care expertise into its board, and that Rec Park and the zoo submit a joint letter outlining a timeline for modernizing the lease and management agreement.
Meeting Transcript
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.
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