Good morning.

Good morning.

The meeting will come to order.

Welcome to the July 8, 2026 of the budget and finance committee.

I'm Supervisor Connie Chan, Chair of the Committee.

I'm joined by Vice Chair, Supervisor Matt Dorsey, and Member Supervisor Danny Sauter, our clerk.

It's Brent Halipa.

I would like to thank Eugene Labadia from SFGov TV for broadcasting this meeting.

Mr.

Clerk, do you have any announcement?

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.

And should you have any documents to be included as part of the file, this should be submitted to myself, the clerk.

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

When your item of interest comes up in public comment is called, please line up to speak on the west side of the chamber to your right, my 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 O R G.

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

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

Postal Service to our office and city hall at one, Dr.

Carlton be good at place.

Room 244, San Francisco, California, 94102.

And finally, items acted upon today are expected to appear on the Board of Supervisors agenda of July 14th, unless otherwise stated.

Madam Chair.

Thank you, Mr.

Clerk.

And before we call the items on the agenda, I would like to just remind the public that we have budget and legislative analyst reports for items one, eight, and ten on today's agenda.

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

Then we will take questions and public comment.

So with that, Mr.

Clark, please call item number one.

Yes, item number one is an ordinance amending the administrative code to increase the minimum grant award amount requiring board of supervisors approval for acceptance and expenditure from 100,000 to the greater of 1 million or the federal single audit threshold amount set by the United States Office of Management and Budget starting October 1st, 2026.

Require Board of Supervisors approval of a grant increase only if it raises the grant to the approval threshold for the first time or increases a previously approved grant to either 110% of or more of the previously approved amount or 200,000 or more above the previously approved amount.

Authorize the controller to make rules governing the acceptance and expenditure of any grants or grant increases that do not require board of supervisors approval, exempt gifts of legal services and litigation related expert services from the requirement that department obtain Board of Supervisors approval to accept gifts valued above 10,000 and make other non-substantive organizational changes to the sections of code relating to cash revolving funds and acceptance and expenditure of grant funds.

Madam Chair.

Thank you, Mr.

Clerk and colleagues.

This is an item that we continue from the June 6 June 17th budget and finance committee due to the substantive amendments.

Um I believe we did have presentation and we did have the budget and legislative analyst report.

Um so with that I I don't see any name on the roster.

I believe we could go to public comments on this item.

Yes, we are 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.

Colleagues, I would like to move this item without further discussion to full board with positive recommendation and a roll call, please.

And on that motion, by Chair Chan, to refer this ordinance to the full board with a recommendation.

Vice Chair Dorsey.

Chan, aye, we have three ayes.

The motion passes.

Um let's, if I may, call items out of order, as uh Supervisor Melgar will be joining us shortly for item number two.

Um, Mr.

Clerk, please go to item number.

Um, actually, hold that thought.

Uh Mr.

Clerk, please call item number two.

Yes, item number two is a motion directing the budget and legislative analysts to initiate a performance and management audit in collaboration with the controller's office of the Academy of Sciences in fiscal year 2026 uh to 2027.

Madam Chair.

Thank you and uh welcome Supervisor Mirna Malgar to the chamber, and the floor is yours.

Um thank you so much, uh Chair Tan, and thank you, colleagues, for uh hearing this item.

I want to thank people in the community, particularly the workers at the Cal Academy as well as the leadership of the Cal Academy for attending uh this hearing.

Um, and I want to thank you in particular, Chair Chan, for your partnership for calling for this audit for raising concerns during the budget process about the financial status and practices of the California Academy of Sciences and for always always supporting workers in our institutions in San Francisco.

The recent layoffs of the workers at the Cal Academy is alarming.

Uh, and we are hearing some of the executive decisions that could have exacerbated the financial health of this institution.

Uh, I want to make it clear that this action on our part as the Board of Supervisors is not meant to be punitive.

We are collectively responsible for this institution.

Uh, and we are supporting this institution through our general fund dollars.

Um, we uh think that the Cal Academy can sustain its core mission to advance conservation environmental efforts while also maintaining labor harmony, respect for its workers, and also fiscal prudence.

It is also an act of good governance to regularly audit institutions that operate on city land and receive city support.

The Cal Academy has never been audited by the BLA or the controller's office.

And I also requested collaboration with the controller's office to look specifically at reviewing assets, debts, investments, and hopefully help identify best practices, not just for the Cal Academy, but to establish a framework of best practices for other institutions in similar relationships with the city who operate on our land.

We are seeing a pattern that I'm afraid will continue if we do not take proactive measures to support our science, our culture, our arts institutions to ensure that they are successful.

We recently completed an audit for the zoo.

Thank you again for that collaboration, Chair Chan.

Um I believe that was really helpful and sets the zoo on a path to success.

With that, I want to thank the workers who have been ringing alarm bells for the past several years for their tireless dedication to the mission of the Cal Academy for educating generations of young people about conservation and the natural world.

I hope the Cal Academy leadership, I know the Cal Academy leadership will take this as an opportunity to improve and to hopefully forge a stronger partnership.

Thank you again, Chair Chan and Supervisors Dorsey and Sauter for your attention to this item.

It's so important for our city.

Thank you.

Thank you.

Um, and also again a reminder for all of us is that we have put uh the second half of the uh Cal Academy of Sciences budget from the city as well as the second year, the entire second year, both uh on reserve.

Um, so it is uh upon the release, uh it will be released upon either the clarification of the timeline of the audit um sometime at the end of this calendar year.

So, good morning, uh Nick Minard from the Budget Legislative Analyst Office.

So, when we have cooperation from an auditee, audits typically take six to nine months.

They can take longer if um information is being withheld from us, as was the case with the zoo.

Um, but assuming that we have cooperation from the Academy of Sciences, I believe we can complete this audit within the fiscal year.

We certainly have capacity to do so within our work plan with the Board of Supervisors for this fiscal year.

And I think by the time the reserve would need to be released at the end of the calendar year, we would have a really clear picture of the level of cooperation and be able to report to you on activity we've completed so far in the audit, what we've achieved relative to our work plan and the level of cooperation we're receiving from the Academy of Sciences.

So we're happy to report back in the fall on those matters.

Thank you.

And I don't see other names on the roster at the moment.

Let's go to public comment on this item.

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

If we have any members of the public who wish to address this committee, if I could have the first speaker.

Hello, good morning, Chair and members of the committee.

My name is Emily Abraham.

I'm the director of government affairs at the California Academy of Sciences.

And on behalf of the Academy, I want to thank you all for your care and commitment to the future of this hundred and seventy-year-old San Francisco institution and want to state that we welcome this audit and we appreciate the opportunity to participate in this process.

And please know that the Academy is fully planning to cooperate and thank you for sharing that timeline.

That that release of funds at the end of the year is critical for the operation of the building and our infrastructure and the animals inside the aquarium.

And we also see this as a helpful step in providing the city with a thorough picture of our complicated operational budget and shared infrastructure needs.

And ultimately, we look forward to the insights of this process that they will provide, and so we can continue stewarding the West Coast's largest research collections with 46 million specimens and 60,000 living animals to continue to serve San Francisco for generations to come.

And thank you to all my colleagues here today as well who are offering their support.

So thank you again for your commitment to the Academy.

Thank you much, Emily Abraham.

Next speaker.

Good morning, supervisors.

My name is Elizabeth Travelslight.

I am born and raised in San Francisco, mother of an SFUSD eighth grader, and I'm here today to speak in support of a complete performance and management audit at the California Academy of Sciences.

Prior to my role as field representative for SCIU Local 1021 and the workers at Cal Academy Workers United, a union representing over 350 employees at the museum.

I served as faculty at the San Francisco Art Institute and the California College of the Arts, where I drew upon many years of research in the history of math and science to provide art integrated curriculum to students.

Certainly, my lifelong relationship with science was fostered by countless visits to the Academy since I was a child.

As faculty at SFAI and CCA, I witnessed firsthand the deterioration and eventual closure of two important historic nonprofits as they collapsed under the weight of risky debt, increasing wage gaps, careless people, a broken culture of philanthropy, and ongoing absence of leadership accountability.

These have been and will continue to be.

Thank you much, Elizabeth Travelslight.

Next speaker.

Good morning, supervisors.

My name is Teddy Vallman.

I am the chapter board president of Cal Academy Workers United.

And I am here to speak in favor of this audit.

These three individuals, the total amount that they would be paid would be somewhere in the range of $60,000 to $80,000 a year.

These were three part-time employees.

And in this same time, the education division is going from having two directors to three directors.

And so this is just one personal example that I have seen of a top heavy management style that is very opaque.

Regenerate the natural world through science, learning, collaboration.

Thank you very much.

And thank you, Teddy Volman.

Next speaker.

Good morning, supervisors.

My name is T.R.

Malcolm.

I've lived and worked in San Francisco since 2013 after coming here to pursue a master's degree in creative writing from San Francisco State University, Go Gators.

Ever since graduating, I've been very lucky to work in creative roles in San Francisco, including at the California Academy of Sciences, where I served at the project manager for the in-house creative team from 2022 until last week, when I was laid off along with dozens of my colleagues.

The bulk of whom are creatives.

They are storytellers, they are graphic designers, they are photographers, one of whom is in the room today, and exhibit designers.

A mere handful of creatives remain, but as you may have noticed around town, there's plenty of marketing to see promoting the new California Academy of Sciences exhibit vivid.

Despite that exhibit being brought to life via now laid off staff, all of that work is now being done by outside contractors, as will most, if not all the marketing.

These layoffs are not only a heartbreaking loss of 377 years of institutional knowledge at the Academy, but they're doing so with an intent to contract out as a violation of our union's contract.

This investment in contractors and AI is why I'm here today to encourage you to conduct the proposed performance and management audit of the California Academy of Sciences.

As someone who worked there for nearly five years, it is clear to me from personal experience that the Academy is falling prey to labor shortcuts and corporate greed.

And as a result, their standing as a vibrant creative cultural institution is put in jeopardy, and workers like myself are suffering.

My hope is that this audit will prevent future workers at the academy from going through what I went through.

Thank you for your time.

And thank you for addressing this committee.

Next speaker.

My name is Michael H.

Santos.

We know each other from various activities.

I'm not sure you're aware that I also serve as a volunteer diver at the California Academy of Sciences for the last 10 plus years.

So I'm a volunteer, I'm not getting paid, I don't expect to.

They give me a fresh red suit for the day when I get there.

However, if you're um studied, trained marine biologists say in your third year, you're being paid less than the half the salary of a first year legislative eight that works for you.

You know, I'm not a socialist, I'm really not even a progressive.

Um, but I see inequality or no equality when I see it, right?

Um, and I can also tell when something's being mismanaged.

Executives are receiving bonuses in excess of 100 thousand dollars a year while sphering an organization that loses millions of dollars in that same year there's something wrong so as a moderate I'm just asking what everybody else is asking please conduct a full audit I want to see where the money is going is it going towards necessary health care for employees or first class airfare for board members just an audit open the books let's take a look that's all thank you I'll see at the aquarium or on the campaign trail.

Thank you much Mike Santos next speaker.

Hello my name is Kate Mirror Welsh and I am here to comment in support of a full audit for the California Academy of Sciences.

I um I'm going to open with a quote from this book called Museums as agents of change museums everywhere have the potential to serve as agents of social change bringing people together commute contributing to local communities and changing people's lives the Cal Academy has certainly changed my life over the course of my time living in San Francisco for over 60 years.

The layoffs uh have impacted my current job which is at the exploratorium another science institution here in San Francisco.

They have ripples the layoffs have had ripples throughout the museum community in San Francisco which is vibrant and contributes to the culture of the city.

The Cal Academy has changed my life and it continues to impact me as a child it awed me with seeing beautiful creatures and learned a lot about science and it had me major in marine biology in college here at UC Berkeley as a new teacher public school teacher in the 1990s I participated in professional development programs that helped me become a better teacher to serve the children of California and now as an employee at the exploratorium I used to have a great uh collegial group at the Cal Academy in their professional development group that was in the education division and they were laid off in previous layoffs.

So as a community cultural institution San Francisco deserves to know how financial decisions have impact the structure and the running of the Cal Academy and these financial decisions currently have weakened the institution's ability to serve as a change agent for bringing people together contributing to the San Francisco and indeed the world and the ability to change people's lives we deserve to know and I believe that my colleagues in the California Academy speakers will thank you much Kate Mirror Welsh for addressing this committee.

And seeing no other speakers madam chair that completes our queue seeing no more public commons public comment is now close.

Supervisor Malgary thank you so much at Chair Chan it is um obvious from public comment that we could benefit from the BLA staff excellent um skills and uh recommendations that will come with this full uh performance and management audit I just want to highlight um an area that we haven't talked about very much that's also part of the motion and that is the involvement of the controller's office.

So our controller's office um in San Francisco um has oversight over the assets and the debts of the city and county of San Francisco and I think that that is appropriate here.

So uh our um's our relationships with all these cultural um institutions throughout the city that operate on our land is slightly different depending on when that relationship was established and what um chair Chan has spent a lot of time on uh while her capacity as a chair of this committee has been uh our debt service our uh certificates of participation our capital plans all of these things are an integral part of a budget, but we don't have any framework or guidance uh for the cultural institutions that operate on our land about those things.

How much debt is appropriate debt?

How much um refinancing should be going on?

How much of your budget should be going to finance that debt?

This institution has refinanced repeatedly um which, you know, if you know from like personal finance coaching is something that you shouldn't do while you're not paying down debt.

So I'm really interested in what the controller can tell us about best practices, and uh that may guide the success of the academy, but also it may guide us in our relationships with other institutions who have similar arrangements operating on our lands and even with some of our assets.

So I think this is really good.

And thank you, Chair Chan, for your attention to this and your partnership.

And again, always thank you to uh the BLA staff for their excellence um and their collaboration.

And above all, thank you so much to the Academy of Science Workers uh for um the fight and also to the leadership for being willing to undertake this with us.

Thank you, Chair Chan.

Thank you, and um I do appreciate all the um effort and I look forward to seeing the audit.

I wanted to make clear and a reminder for everybody.

I am also interested to understand the 200 million dollars endowments that Cal County of Sciences has that is inclusive of 50 million dollars that is unrestrictive uh endowments fund and how is that uh managed by the board and the administration itself uh in terms of that would align both their vision for increasing visitorship and maintaining um the sovereignty and uh of the institution uh but just the reasoning of why they end up making the decision of layoff um without was there ever conversation and consideration of tapping into those uh endowment uh to prevent the layoff.

Um so with that uh I thank you, Supervisor Malgar.

Thank you so much for your leadership.

Uh we look forward to seeing audit and once again, and I think you're gonna save another important um institution in San Francisco.

So thank you for your leadership.

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

And on that motion to refer to the full board with recommendation, Vice Chair Dorsey, Dorsey, aye, Member Sauter Sauter, I chair Chan.

Aye.

Chan, I we have three eyes.

The motion passes.

Thank you.

And Mr.

Clerk, please call item number three.

Yes, item number three is a resolution authorizing the recreation and park department to enter into an agreement with the San Francisco Downtown Development Corporation regarding potential improvements and renovations at Embarcadero Plaza and Sioux Bierman Park, and to accept cash grants of approximately 20 million for the project for the period starting on the execution date of the agreement through December 2028, and authorizing uh rec park to enter into amendments or modifications to the agreement, provided they do not materially increase the obligations nor liabilities to the city.

And are necessary to effectuate the purposes of the project or this resolution.

Madam Chair, thank you, and um visor, would you like to have opening remark?

Um, thank you, Chair Chan.

Um, this is uh a project that we've been working on for for a number of years now, and you know, I really uh appreciate how this has been a public and private partnership, and you'll see that represented in the funding source here, particularly today, contemplating um the acceptance expend from the downtown development corporation.

Um, you know, this is uh a site that I think we um through conversations with neighbors and nearby partners all recognize that it's uh uh a fine space now, but it can be a lot better.

It is a really a relic of uh another time, a relic of a time when there was a highway dividing downtown and the waterfront.

Um, and uh that that uh process is has been healing.

Uh and I think this is maybe the final step to um to unite our downtown, our neighborhoods, and our waterfront once again.

Um, you know, and I'll just remark that there's a lot of uh focus naturally on this being a downtown project.

Um, but uh I wanted to make sure we don't forget that um just a block away, we have a few thousand residents, particularly uh at the gateway.

Uh, and we've had such enormous support from the Gateway Tenants Association from the nearby Barbary Coast Neighbors Association, recognizing that this is gonna be really a benefit to them.

There's already a wonderful playground there, but this will bring in additional amenities that will really serve neighbors first and foremost, like a new fitness area and and dog park.

So there's a lot of excitement for this, and I want to thank Rec Park for their work to piece all of this together.

Thank you.

Thank you.

Thank you, Supervisor Soder.

Good morning, uh, Chair Chan, Supervisor Dorsey.

I'm Lisa Branston from the Recreation and Park Department.

I'm director of partnerships.

And I'm here today, as Supervisor Sauter mentioned, with items related to the renovation of Embarcadero Plaza and Suberman Park, specifically to ask you to authorize the recreation and park department to accept up to 20 million dollars from the Downtown Development Corporation or DDC for the project, and also to authorize the department to enter into an agreement governing that grant.

So, for some context, these approvals will layer in another partner to an existing public-private partnership that includes BXP, the Downtown SF Partnership, and Office of Economic and Workforce Development.

Oops.

Um, so I want to start with some background of how we got here and why this project is so urgent and important.

This project will reimagine an underused park into a vibrant new space.

It will turn a plaza design to stop people at the end of Market Street before the embarcadero freeway into an accessible outward-looking park that will better connect the city's waterfront to its downtown, and it will create a welcoming front door to San Francisco.

The park's emerging design comes out of three community meetings and thousands of surveys and other public outreach with the goal of creating a site that makes a neighborhood, makes the neighborhood a place where people want to live and work.

The Concept Plan, which was approved by the Recreation and Park Commission last month, features elements that will create an active, well-used park that will bring people together and connect them with each other and the city.

So the goals of the project align very closely with the DDC's vision for downtown.

Together, all of the partners on this project are committed to building a park that will contribute to an active, thriving downtown.

So I want to back up in time a bit and talk about the partnership and how we got to this moment.

In 2024, BXP approached RPD and OEWD with an offer to support a park renovation with 2.5 million dollars in an in-kind grant of design.

The downtown SF partnership joined the project, and in late 2024, early 2025, the Commission and then the Board of Supervisors reviewed and approved the agreement that created the four-way partnership.

Subsequently, the DDC was launched with the goal of raising millions to revitalize the city and especially its downtown.

Since the goals of the embarcadero project and the goals of the DDC were so closely aligned, all of the partners agreed to work together on this project, which brings us to this moment when we are seeking to formalize this relationship with the DDC.

In this role, the DDC will take over the lead in fundraising with support from the four existing partners, and it will join the leadership of the initiative.

All of the partners are working really hard together to complete the design and start construction by late this year or early next, so we can deliver this park as quickly as possible.

So we expect the full project budget to be about 40 million dollars plus the 2.5 million dollar in-kind grant that BXP is providing.

Of that funding, the city is contributing $18 million from various public sources, including nearly $14 million from the Vibrant SF 2024 bond.

The downtown partnership has already raised two million dollars for the project, and the DDC has committed to fundraising the additional 20 million.

This is a little bit about the state of the campaign.

It shows funding identified or secured, including a matching grant that the DDC is finalizing, and the approximately 10 million dollars that remains to be raised.

Some highlights of this agreement are that the DDC will join the project governance team to make to jointly make decisions about the project.

RPD agrees not to make substantial changes to the park design or footprint after the concept plan is approved without agreement from the team.

RPD will bring a donor recognition plan to the commission for approval in order to support the DDC's fundraising work.

RPD will provide its partners with a project budget, schedule, and funding milestones within 30 days of completing and executing the agreement.

The DDC commits to fundraising up to 20 million dollars for the park, and the DDC agrees to determine if it can disperse some of the private funds it raises to BXP or the downtown partnership, which allow would allow for some of the construction work to be delivered as in-kind grants with private funds, which would allow the park to be delivered potentially more nimbly and transparently.

And that's a summary of what we are asking for approval for today.

And I hope you'll authorize us to continue this work.

And with that, I'll say thank you and take any questions.

Thank you.

I don't see any names on the roster.

I don't have additional questions.

Thank you for your presentation today.

We'll go to public comment on this item.

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

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

Good morning, Chair Chan, Supervisor Dorsey and Sauter.

My name is TJ Wenzel.

I'm managing director of capital initiatives for the San Francisco Downtown Development Corporation, or the DDC.

The DDC is a nonprofit with a mission to revitalize and reimagine downtown San Francisco as a 24-7 destination where people live, work, play, and learn.

One of the key strategies in delivering our mission is to mobilize private capital to help deliver transformational development projects as we and we see the redesign and renovation of the embarcadero plaza and Sue Beerman Park as one of the most important things that we can do in this moment to strengthen San Francisco's global front door.

The DDC is very proud to be the Department of Recreation and Parks partner in raising and contributing capital to enable this development of this critical project.

We look forward to our continued partnership with Reckon Park in helping to deliver this world-class park for the city and county of San Francisco.

And thank you much for addressing this committee.

Seeing no other speakers, Madam Chair, to completes our cue.

Seeing no public comments, public comment is now closed.

And Supervisor Sauter, what would you like us?

I'd like to ask that we uh move this item to the full board with recommendation.

A roll call, please.

And on a motion by member Sauter.

That we refer.

This resolution to the full board with recommendation, Vice Chair Dorsey.

Dorsey, aye.

Member Sauter.

Soder, I chair Chan.

Aye.

Chan, I we have three ayes.

The motion passes.

Thank you.

And with that, Mr.

Clark, please call item number four.

Item number four is a resolution authorizing the issuance and sale from time to time of bonds of the San Francisco Unified School District, prescribing the terms of sale of not to exceed $270 million of said general obligation bonds.

Election of 2024 Series B.

Authorizing the sale of the bonds by negotiated sale and approving the form of bond purchase agreement, approving the forms of one or more paying agent agreements and authorizing the execution of necessary documents and certificates.

Madam Chair.

Thank you.

And today we have.

My name is Mikiko Sato, and I'm with ISIM Advisors.

We serve as the municipal advisors to the San Francisco Unified School District Bond Program.

We have prepared a short presentation to give some context to this item.

San Francisco voters have been very supportive of the district's bond program.

They have passed five bond measures since 2003, which are listed here on this slide.

Most recently, in November of 2024, voters passed Prop A for a 790 million bond authorization.

In April of 2025, the district issued the first series of bonds from the 2024 Prop A authorization with a par amount of 160 million, which leaves 630 million in authorized but unissued bonds remaining from the 2024 property authorization.

The district is currently ready to move forward with the second series of bonds from the 2024 Prop A authorization this fall.

The par amount of the Series B bond will be a not to exceed 270 million dollars.

The 270 million dollars will be used to fund projects over the next 24 months as listed on this slide.

The bond resolution that will be considered by the Board of Supervisors at a future meeting, authorizes the city and county of San Francisco to issue general obligation bonds of the San Francisco Unified School District pursuant to the California Education Code.

The resolution establishes certain parameters of the Series B bonds, including the not to exceed par amount of 270 million.

The structure of the bonds will be traditional current interest bonds.

There will be a not to exceed true interest cost of 6%, and the repayment term will not exceed 25 years.

We did want to note that in conjunction with the Series B bonds, the district is considering the issuance of refunding bonds if the market permits to generate taxpayer savings.

The refunding candidates are prior bonds that were issued by the district, the 2006 Series F bonds, the 2011 Series B C bonds, and the 2016 Series A bonds.

The city and county of San Francisco will be serving as paying agent on both series of bonds.

In terms of our financing schedule, this is the current draft.

With the Board of Supervisors approval in July, the district is planning to move forward with pricing and closing in the August-September timeframe.

And that is concludes our presentation.

Thank you.

We're excited to see that these projects are moving forward.

Congratulations.

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

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

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

Seeing no public comments, public comment is now closed.

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

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

Dorsey, aye.

Member Soder.

Soder, I chair Chan.

Aye.

Chan, I we have three ayes.

The motion passes.

And with that, Mr.

Clerk, please call items five through seven together.

Item numbers five through seven are resolutions authorizing the port for the following items five and seven accepts and expands uh grants, uh approving grants agreements pursuant to the charter and authorizing uh the acting executive director to enter into amendments or modifications to the respective grant agreements have to not materially increase the obligations nor liabilities to the city and are necessary to effectuate the purposes of the respective grant agreements.

Item number five is in the amount of four million from the regents of University of California San Francisco to fund the Mission Bay Ferry Landing Project for the period of May 1st, 2026 through March 31st, 2028.

Item number seven is in the amount of 4.5 million from the San Francisco County Transportation Authority to fund the Mission Bay Ferry Landing Project for the period of July 15, 2026 through September 30th, 2028.

And item number six executes amendment number six to a professional services contract with COWI, O W I O L M joint Venture for architectural and engineering services for the Mission Bay Ferry Landing Project, extending the contract term from June 16th, 2026 for a total term of January 3rd, 2017 through June 30th, 2028, with no changes to the contract amount of approximately 6.4 million.

Madam Chair.

Thank you.

And Vice Chair Dorsey.

Thank you, Chair Chan.

I just wanted to express my appreciation to everybody from the port for being here.

Mission Bay is a neighborhood that I represent, and just, you know, this is a neighborhood that has become really one of San Francisco's fastest growing with thousands of new homes.

With Mission Rock opening up the addition of major employers, including a lot from the AI sector, in addition to UCSF Chase Center, Pier 70 and more.

Our transportation infrastructure really needs to keep pace with that growth.

Ferry Service, I think, will provide a reliable congestion-free alternative for commuters, residents, patients, students, visitors, and event attendees while reducing pressure on our streets and transit system, hopefully.

This is exactly the kind of investment we should be making, expanding transportation options while supporting economic growth and making it easier for people to get to and from these neighborhoods.

I especially appreciate the partnership that made this possible.

These items bring together funding from UCSF, the San Francisco County Transportation Authority, the port of San Francisco State and Federal Partners, and local transportation sales tax dollars to deliver a project that benefits the entire region.

Importantly, these actions do not require new general fund dollars, as I understand it.

We're leveraging outside funding to deliver a major piece of public infrastructure.

This ferry landing will improve access not only to Mission Bay, but also to Mission Rock, dog patch Pier 70 in the central waterfront, helping connect residents and workers to their jobs, housing, health care, and recreation.

So I'm excited to move this, see this move forward and grateful for you here to be here and make this presentation.

Thank you so much, Supervisor Dorsey.

And so I'm Megan Wallace.

I'm the deputy director of finance and administration for the port of San Francisco.

And we are bringing three items to you today.

Two related to accept and expend resolutions and one seeking an extension to a current contract.

I think just as the supervisor so eloquently described around the exciting elements of this project, really want to highlight three key areas of how it aligns with the port's strategic goals.

Really, we see equity as a primary leading point of improving access to this neighborhood from all across the bay.

We can see in this image here of the Chase Center and the Port's beautiful new Bayfront Park.

You can see the rendering of the new uh ferry landing once it will be installed, and you just think about people being able to access this beautiful neighborhood from various areas along our waterfront and across the bay.

Sustainability is critical.

It's uh we originally envisioned this as a way to get people out of cars and onto water water vessels.

Um, but notably an important funding source of this project is use of an environmental protection uh agency grant uh that is allowing us to um basically uh uh move forward with the first electrified ferry system with partnership of the San Francisco Bay Ferry in the nation.

Uh so sustainability is key in this program and finally evolution, really just thinking about how this overall neighborhood is as continuing to change, along with the rest of our beautiful port waterfront.

Um just to give a snapshot of the budget and to just remind just how many different funding sources uh and the amount uh that's going into this project.

It's almost $80 million overall.

Um you can see that city funds from the port's own harbor funding.

Uh, we did have an initial um amount of general fund support earlier on in the project.

Um, but there's a good city investment that's already been made here.

Um then we have the EPA grant.

SF Bay Ferry is our partner for accessing regional measure three funding, so Bay Bridge uh toll tax has been a real central source to this project.

And here we are with the last two pieces of this puzzle finally moving in with um a really highly appreciated grant from the University of California of San Francisco of $4 million dollars and uh SF sales tax uh through proposition L, which um has previously been uh approved, but now needs to be appropriated in the port's budget.

So with that, we are seeking today through resolutions related to the funding.

So first um approval of the UCSF grant of four million dollars and the you and the SFCTA 4.5 million dollar grant.

Additionally, as we're preparing to go into the construction phase of the ferry landing, we are in need of extending our design contract with COWE.

And I'll be reading into the record the exact details of that extension.

But basically, because of delays with implementation of regional measure three, the project timeline got pushed back and went far past the period of time we thought we would need for that those design services to be in place.

Sorry, okay.

So that's it.

I think with that again, Supervisor Dorsey, the port on behalf of the port, we really just want to thank you for your championship of the project overall and all of the various pieces of legislation that we've brought before you.

And so I think with that, I'll go ahead and read into the record uh the amendments.

So we would like to propose an amendment to item number six.

So the resolution is retroactive to June 16th, 2026, which is when the original contract term ended.

This would involve adding the word retroactively to page one, lines three and six, and to page six, line two.

The resolution title would then read as follows.

Resolution retroactively authorizing the Port of San Francisco to execute amendment number six to a professional services contract with CAWE OLMM Joint Venture for Architectural and Engineering Services for the Mission Bay Ferry Landing Project, extending the contract term retroactively from June 16, 2026 for a total term of January 3rd, 2017 through June 30th, 2028, with no changes to the contract amount of $6,411,383.

Additionally, the amendment on page three line two should now read extending the contract term retroactively from June 16, 2026 to June 30, 2028, pursuant to the board's authority under Charter Section 9.118 and be it further.

Thank you, Supervisors.

I'm joined here by Boris Delapid and Simon Betzelel if you have any questions.

Thank you.

I don't have additional questions.

So with that, let's go to public comments on these three items.

Yes, we're now opening public comment for these items five through seven.

If we have any members of the public commissioner justice committee, good morning, Madam Chair and Supervisors Ami Alden on behalf of UCSF.

We are so pleased to support the Mission Bay Ferry Landing and to provide a financial contribution.

As you probably know, UCSF has become the largest employer in San Francisco, and roughly half of our employees live in the East Bay.

So the opportunity for our employers, our students, our patients, our visitors to be able to access our Mission Bay campus and Supervisor Dorsey's district without having to get into a car is something that we really lean into.

I also want to note that once uh ferry riders arrive at the Mission Bay Ferry Landing on the edge of our campus, they'll be able to access our existing free all-electric shuttle system to access locations all over San Francisco, including San Francisco General Hospital, where all the physicians are UCSF faculty, the VA and UCSF Stanyan Hospital and Supervisor Chan's District.

Obviously, our Parnassus campus in Supervisor Melgar's district, the uh Civic Center at BART station, and other locations around San Francisco.

UCSF's contribution to the Mission Bay Ferry Landing is actually a commitment that our chancellor Sam Hoggard made to Mayor Ed Lee many, many years ago.

So we're really pleased to be able to keep that promise today.

We look forward to the Ferry terminal opening.

We're really proud to make our own contribution, and I really do want to thank our colleagues at the Port of San Francisco and Supervisor Dorsey for all of your hard work and support to bring this to reality and urge your support for the resolution.

Thank you.

Thank you much, Amy Alton.

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

Seeing no more public commons, public comments now closed.

How would you like to move forward?

Thank you, Chair Chan.

I would like to make a motion to adopt the amendments as right into the record and then forward this item to the full board with our positive recommendation.

Thank you.

And uh roll roll call, please.

And on that motion that we first amend the resolution and item number six to accept rector elective language, and that we refer uh three res uh all three resolutions to the full board with a recommendation item six as amended by Vice Chair Dorsey.

Vice Chair Dorsey.

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

Aye.

Chan, I we have three eyes.

The motion passes.

Thank you.

Uh and Mr.

Clark, please call item number eight.

Yes, item number eight is an ordinance approving health service system plans and contribution rates for calendar year 2027.

Madam Chair.

Thank you.

And Vice Chair Dorsey.

Thank you, Chair Chan, for scheduling this item, and thank you, Director Ray Gehan, and everyone from the Health Service System, as well as my colleagues on the health service board, for the considerable work they have done to develop each year's rates and benefits package.

As the Board of Supervisors representative on the health service board, I've had the opportunity to see firsthand the hard work, the thoughtful, transparent, and deliberative process behind these recommendations.

These decisions are never easy, particularly in an environment where health care costs continue to rise.

Health insurance costs are rising significantly faster than inflation overall.

According to the latest data, I just checked this morning.

In fact, at a time when headline inflation or CPI is uh running around 4%.

Employers are seeing increases to health benefit costs that range from about 6.5% to double digit increases.

Um, a price waterhouse Cooper analysis last month projected that medical cost inflation next year is going to be about nine percent for reasons that include higher hospital and physician prices, uh growth in pharmaceutical spending, including GLP1s, labor shortages, wage growth in health care, uh greater utilization of health care services, and like much that bedevils us here on this budget committee, federal policy changes, including um the expiration of ACA marketplace subsidies that have pushed those premiums higher.

Um, against the backdrop of all of this in this very challenging environment, the health service board and the health service system it oversees remain focused on its responsibility to ensure the long-term sustainability of the system for our workforce, our retirees and their families, and I really appreciate the work that went into bringing this item forward, and I look forward to Director Gann's presentation.

Thank you.

Good morning, Chair Chan and members of the committee.

I'm Ray Gehan, Executive Director for the Health Service System.

And today I'm joined by Teresa Tan, our Chief Financial and Affordability Officer.

And together we'll present you with the final 2027 plan year rates and benefits package for the plans and programs managed by the health service system.

Next slide.

As you know, the health service system is employee benefits administrator for four separate San Francisco public employers, the city and county, the unified school district, city college, and the superior court.

For plan year 2027, we'll manage more than 1.4 billion dollars in total premiums.

And today we are responsible for serving more than 139,000 active and retired public servants as well as other dependents.

Here's today's agenda.

I'll begin with a quick reminder of who is responsible for what related to setting the rates and benefits for the upcoming plan year.

I'll then run through the timeline for our annual rate development process and briefly review our process for conducting market assessments to ensure we are providing our members and employers with the best value for their premium spend.

I'll then walk you through the process by which we set those premiums, and I'll introduce the overall percentage increase for plan year 2027.

I'll review the current health care landscape, highlighting the current factors that are driving the higher premium costs for all employer-sponsored plans, as Supervisor Dorsey mentioned.

Teresa will then step in to compare HSS proposed rates for 2027 to the premium contributions of the other large California counties and to the nationwide average.

Finally, Teresa will conclude today's presentation with an introduction of the individual plan rates.

Next slide.

Those rates are developed by health service staff using an established rates and benefits process where the HSS team engages with our health plan partners and negotiates the rates for our members and four employer agencies.

The Health Service Board then approves those rates over a series of its monthly meetings from February through June.

However, those rates and benefits do not become effective until approved by ordinance of the Board of Supervisors with a three-fourth vote, which brings us here today.

Let's start with a quick review of the timeline that leads to the establishment of the rates and benefits for the next plan year.

Work on the renewal for plan year 2027 actually began in August of 2025.

August is the month we normally notify the health service board of staff's intention to conduct any requests for proposals for any of the plans.

Then from January through June, we systematically present the proposed premium rates for each of the plans to the health service board for their approval.

Finally, every July, we present the entire package to this committee to seek full Board of Supervisor approval.

Following that board of supervisor approval, staff begin preparation of our open enrollment materials and start our programming of our various systems.

In September, we send out our open enrollment communications to our members.

And as a reminder, open enrollment is a one-time each year that our members may elect changes in their benefit coverage.

Our open enrollment period runs over three weeks in October, with any changes becoming effective January 1st.

Next slide.

The Health Service Board remains busy year-round as Supervisor Dorsey can attest.

As mentioned earlier, the Health Service Board finishes its approvals of the rates and benefits in the June preceding the start of the plan year.

Two months later in August, its work for the plan year, which starts 17 months in the future, gets underway.

In that meeting, the HSS Contracts Division reports on the status of contracts under the Health Service Board's jurisdiction and informs the Health Service Board of any planned requests for proposals.

For plan year 2027, HSS conducted two RFPs.

One for our active employee PPO Daniel Plan and one for our flexible spending account administrator.

Based upon the results of those RFPs, the Health Service Board determined that our incumbent vendors were providing the best value to our members and employers.

The HSS rates and benefits process is both methodical and data-driven, ensuring that we set fair and competitive premiums for each plan.

To begin, we project baseline premiums for the upcoming plan year, starting with the actual health care cost and utilization data from the previous year.

We then added projected trend for medical inflation and apply reserve policies to ensure our funding is adequate and financially sound.

Additionally, for comparison purposes, we gather industry benchmarking and nationwide trends, including conducting an annual 10 county survey.

We then receive the renewal proposals for each of our plans from our plan partners.

We carefully review each one of those proposals and conduct an independent actuarial analysis to promote transparency and strengthen our negotiation position.

We then move into the active discussion phase with the health plans.

Staff meet with each plan individually to walk through their data and assumptions, discuss any differences between our projections and theirs, and conduct focused negotiations.

This comprehensive approach enables HSS to make informed decisions, avoid unwarranted premium increases, and maintain transparency both for our members and employers.

Excellent.

The overall increase for the plans and programs managed by the health service system is 10.11% for plan year 2027.

This adjustment is necessary to maintain our current comprehensive coverage while navigating rising medical trends and localized health care inflation.

The Health Service Board is not proposing any changes to our plan benefit coverage or plan providers.

Next year cost increase is largely being driven by several key health care market cost drivers impacting our active members and non-Medicare retirees.

The most significant factors include the surging utilization and rising cost of GLP 1 medications, increased expenses associated with gene and cell therapies and escalation of high-cost claims.

Well, these treatments represent massive leaps in medicine that improve and prolong our members' lives.

They also come with a staggering cost.

Additionally, program um provider inflation is impacting overall costs with health system consolidations reducing competition and post pandemic labor shortages leading to higher wages for healthcare staff.

Please note that these pressures are not unique to HSS, they are impacting all employer-sponsored plans nationwide, reflecting broader external market trends rather than organization specific issues.

We thought it might be helpful to show the various underlying costs that make up the total premium.

On this page, we are using the rate buildup for the Blue Shield Access Plus 2027 proposed premium rate as our example, but the ratios hold true for our other plans as well.

82.5% of every premium dollar will pay for medical services to our members, like hospital stays, doctors' visits, and lab tests.

15.3% covers the cost of prescription drugs that our members utilize.

2.10% covers the plan's administrative support, which are the people and systems that process claims, answer member questions, manage customer service, and help connect members with the care that they need.

And less than one half of one percent is spent on paying the various taxes and other required fees.

At this point, I'll turn over the presentation to Teresa Tan, our chief financial and affordability officer.

Thank you, executive director Guian.

Good morning, Chair Chan and Committee members.

I'm Teresa Tan, the Chief Financial and Affordability Officer.

I'll go over the overall trend and then the plan by planned changes over the years.

Every year HSS conducts a survey of the 10 most populous counties in California to benchmark how much other public employers contribute towards health care.

Based on our 2026 survey, the average employer contribution for 2027 employee only coverage is 1,029.76 cents per month, a 9.3% increase from the prior year.

This amount is used as a base for the employer contribution for retiree rates and for some unit employees.

On the next slide, you'll see how trends align with others.

As you can see, our annual increase closely matches both the 10 county and the national U.S.

average for 2027, the blue line, HSS is the 10.11%.

The green line, 10 county, is a 9.3%, and the orange line, US trend, is 9.5%.

Overall, our increase is in line with what employers across California and across the country are experiencing.

Next, we'll look at how the rate trends appear plan by plan.

On this slide and then next, we're looking at five-year rate changes by plan.

This slide shows how each medical plant's annual fluctuation varies based on claim experience and on your license on our members, uses their benefit.

All plans are influenced by the same market cost driver that executive director Guian mentioned earlier.

For 2027, most of the increase is coming from the medical plans covering active members and non-Medicare retirees.

Here we're looking at the rate changes for our non-medical plants, dental life and disability.

The E plans are not driven by the same cost pressure as medical plants.

So our 2027 rates have remained very stable or only show very modest increases.

We respectfully request approval of the 2027 rates and benefit package.

Your approval allows to prepare open enrollment materials and a smooth road out for our members.

As always, we're honored to serve the public servant who care for our city.

Thank you.

Thank you.

Item eight is an ordinance that would approve the health vision dental life insurance and long-term disability insurance plans for calendar year 2027.

There are no major changes to the plan design or insurance providers, with a couple exceptions.

One, uh the discontinuation of the Kaiser plan that covers retirees in Washington, Oregon, and Hawaii.

That affects about 200 retirees, but there will be other plans to cover them, as we detail in our report.

And also restrictions on weight loss medications.

We note on page 12 that the city's cost for all of these benefits is going from 1 billion dollars in calendar 26 to 1.1 billion dollars in calendar year 27.

So it's about a 10% increase overall.

And we also note as a policy consideration that the health service system uh issued an RFP uh to identify new providers for a dump a dental plan PPO.

The top scoring proposer, which was MetLife from that RFP, uh did have a smaller network of providers, and for that reason, uh would have saved the city about 11.6 million dollars a year because a lot of the existing dentists that people use would be out of network and therefore they would pay more out of pocket.

Uh the the health service board opted not to award a contract based on that RFP, and continue to use Delta Dental as the dental PPO, despite the savings that were that was identified, judging that the disruption to the existing provider network was too much, and as a policy matter, decided to keep Delta Dental, but we're noting that as a fiscal issue in our report, but we are recommending approval of item eight.

Thank you.

Um I think I first want to um thank the House Services Board and thank you, Vice Chair Dorsey for the work uh on the board.

I think it is critical.

Um I think the conversation with Met Life around dental um coverage is uh critical one, um, and really demonstrates that while we see cost reduction and cost saving, uh it is not the best option really for coverage uh for members, and that I so I really am thankful.

It probably it's a tough decision to make um to override um that bit to make sure that we still maintain the level of coverage by understanding the cost that to the city that comes with it.

So I appreciate the House Services Board's decision on that.

I do want to uh kind of bring us back, and this is more for this body um and for colleagues as you continue to move forward on slide 11, and it's to kind of give a a sort of thinking about the timeline of when this particular um uh rate discussion comes at this time in July, and typically it is scheduled for July.

Uh it's my learn lesson in 2024 that uh it's really almost in the midst of June to recognize the rate increase as you see a spike.

Um, and I particularly remember that year as budget chair that the rate increase was quite significant, as you can see on slide 11.

And so it was I I don't want to say it was a complete surprise, but it was something that we end up in the midst of budget process have to mitigate.

Um, and since then, I think we have worked better.

We have worked better together with um House Services Board uh to make sure that we understand potential rate increase.

It's just alignments of discussion about the House Service Board uh deciding on rate increase as well as how it would align on budget.

So typically now we we understand there's a projection of potentially like not to exceed, you know, or to to how much it will be coming for rate increase and what that would look like for for the city's budget.

So just uh just something I wanted to pin and highlight uh to say for the next year for our budget process is something that I would love that we continue that closed communications uh so that we understand.

Uh I hope it doesn't increase significantly, but as we can see, even within the fiscal year, it's it's a two percent increase.

It's not huge, but the ongoing increase is what I actually anticipate uh for for Medicare uh for for health care coverage.

So thank you so much for your work.

I don't have additional questions other than that.

I um wanted to let you know uh I will be sending a request to the House Services Board to have an ongoing conversation.

Thank you so much for the update.

Um data that you submitted today this morning for uh responding to our letter inquiry for it with additional information.

I will be sending a letter to as a request to the House Service Board that they continue to have these discussions and hold those hearings uh as part of their um report, like standing report from you as now part of the reporting of appeals and percentage of approval.

Um, as far as I understand, I think the last meeting that Blue Sheo had with Save Our Benefit uh was on June 8th, and I know that conversations seem to still be ongoing.

Um, and because this body is gonna go on recess um soon in August, and so I just want to make sure that not only that we track as a committee um uh during time when we're on recess that that health service uh system will also track um as well with those conversations to make sure it really move uh move along and make progress.

Yes, that sounds very reasonable.

Thank you.

And just to let you know the next meeting between Blue Shield and Protector Benefits, which um we will also be in attendance, I believe it's next Monday.

So those conversations continue.

Thank you for getting involved.

Thank you for facilitating those conversations.

I think it's also important that actually works for you and your team to make sure that those things are actually uh not only implementable, feasible, but also that you could track and you actually have an understanding of um what those communications and potential new policy would look like or new protocols could look like.

So thank you so much for your work.

Thank you.

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

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

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

Um Vice Chair Dorsey.

How would you like to move this forward?

Thank you, Chair Chan.

I would move to forward this proposed ordinance to the full board of supervisors with our positive recommendation.

A roll call, please.

And on that motion by Vice Chair Dorsey that we refer this ordinance to the full board with recommendation, Vice Chair Dorsey.

Dorsey, I member Sutter Sauter, I chair Chan.

I Chan, I we have three eyes.

The motion passes.

Thank you.

And Mr.

Clerk, please call item number nine.

Item number nine is a resolution retroactively authorizing the Department of Public Health to accept and expend an in-kind gift of wastewater analysis services valued in the amount of 87,000 from the Biobot Analytics in support of the Department of Public Health for the period of July 1st, 2026th through June 30th, 2027.

Madam Chair.

Vice Chair Dorsey.

Thank you, Chair Chan.

Um I just wanted to say that uh so back about a year and a half ago, uh, board president and uh Mandelman and I were exploring options on what we could do in an admittedly uh difficult budgetary environment to encourage um a citywide or explore a citywide um wastewater-based epidemiology uh program to monitor for elicit and novel synthetic drugs.

I wrote a letter of inquiry a little litter a little over a year and a half ago on that, and I appreciate the Department of Public Health's response and work on it since, including with this item.

Good policy starts with good data.

Wastewater testing gives our public health officials an early warning system to detect changes in the drug supply before we see the consequences in emergency rooms or on our streets or from the office of the chief medical examiner where it's too late.

We have learned over the last several years that the illicit drug supply is constantly evolving.

And I think as Dr.

Hom and I have talked about, you know, a decade ago, no one would have predicted the impact that fentanyl would have to upend public health spending and drug policy orthodoxy and really force some uh rethinking on what we can do to better support and incentivize uh long-term recovery and reduce overdoses.

Uh but in the synthetic drug era, fentanyl was only the beginning.

Uh, it is also uh nitosines, which is the new synthetic opioids, xylozine, like that was TRANC, uh metatomidine, the new tranc, um, cyclorphine.

You know, these synthetic drugs and various adulterants are more potently addictive and more deadly than anything that we've ever seen.

Um, having timely information about emerging substances allows the city to respond more quickly to better target outreach and treatment and ultimately to save lives.

And it does have uh history, especially in European cities, though it's relatively new here.

But I really want to express my appreciation to everyone at the Department of Public Health, but especially Dr.

Jeff Hom, who we're going to hear from, uh, who was medical officer for science policy and substance use service, has been a valued partner to my office and to many uh other offices here in City Hall for policy priorities that we share.

I want to thank you, Dr.

Haum, for everything that you have done for this grant, and I think it will hopefully highlight the potential benefits that um greater public investments in this kind of uh work will hold in years to come.

So thank you.

Great.

Well, good morning.

I'm Chair Chan, Vice Chair Dorsey, Supervisor Sauter, and thank you for your comments, Vice Chair Dorsey.

Um, I'm Jeffrey Haum, Medical Officer for Science and Policy in the Substance Use Services section of the San Francisco Department of Public Health.

And I'm here today to present a philanthropic gift for board uh acceptance.

This is um a request for an acceptance spend, an in-kind gift of the amount of eighty-seven thousand dollars, the timeline being July 1, 2026 through June 30th, 2027, the funder being Biobot Analytics, and as Vice Chair Dorsey mentioned, this is to support wastewater-based epidemiology services for the Department of Public Health.

This gift supports the early detection of emerging substances in San Francisco's drug supply through wastewater monitoring.

We expect this will provide a broad population level view that complements clinical and toxicology data.

This will help the Department of Public Health identify emerging substances, track changes in the prevalence of drugs, and inform timely public health responses.

The project will be conducted in partnership with the Public Utilities Commission, and we are grateful for their support.

We are seeking a retroactive authorization to accept this gift.

The project period for this gift uh this grant began July 1, 2026 and goes through June 30th, 2027.

The San Francisco Department of Public Health received notice of this gift on June 9, 2026, allowing only 22 days for the accept and expend process.

The Department of Public Health brought this item to the Board of Supervisors after going through the fiscal approvals process, including the controller's office review and approval.

I do believe this can make an important difference in our ability and our city's ability to identify novel psychoactive substances, and we respectfully request retroactive approval of this item.

Thank you.

Thank you.

I don't have an additional questions.

Thank you so much for being here.

Um and with that, let's go to public comment on this item.

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

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 comments now closed.

So I said Dorsey.

What would you like?

I would like to uh move this item to the full board of supervisors with our positive recommendation.

That's my motion.

Roll call, please.

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

Vice Chair Dorsey.

Aye.

Dorsey, aye.

Member Sauter.

Soder.

I chair Chan.

Aye.

Chan.

I we have three ayes.

The motion passes.

Thank you.

And Mr.

Clark, please call items 10 and 11 together.

As item numbers 10 and 11 are resolutions approving the following between the city and county acting by and through its airport commission.

Item number 10 is a Harvey Milk Terminal 1 and Terminal 3 travel travelers' retreat lease between Hotel ZLC as tenant for a 12-year term and a minimum annual guarantee of $350,000 for the first year of the lease effective upon approval of this resolution.

And item number 11 is a lease termination agreement for the terminal two casual dining food and beverage concession lease six between SSP America Inc.

Madam Chair.

Good morning, Chair Chan, Vice Chair Dorsey and Member Slaughter, Daniel Sang with uh SFO.

The airport is seeking your approval of on two items today.

The first item requests approval to award the Harvey Milk Terminal One and Terminal Three Travelers' Retreat Lease to Hotel Zoe LLC, which will operate the spaces as a wait and rest and the lost gate.

Uh wait and rest is a private nap room concept that the airport has long wanting it to offer and believes that it would be a valuable new amenity for both travelers and flight crews.

Uh and the lost gate will be a speakeasy inspired lounge featuring a bar and elevated uh plates menu influenced by Japanese and Peruvian flavors.

The lease includes two locations.

Uh the approximately 3,000 square foot Harvey Milk Terminal Space will feature both concepts with uh wait and rest offering a sleep and shower service and a lounge, while the lost gate will occupy the opposite side of uh for a more intimate setting.

The approximately uh 1,300 square foot terminal three location will operate exclusively as a weight and rest with sleep and shower services provided.

Hotel Zill is based in Florida and opened its first airport sleep facility in 2022 at um El Dorado International Airport and Boca Deck Columbia, and since then it has expanded to Miami International Airport and expected to open at Toronto Pearson International Airport.

The proposed lease term is 12 years, and rent will be the greater of uh uh 350,000 minimum annual guarantee or a percentage of gross revenue, which equivalents to 12% for sleep and shower services, loun entry fees, and merchandise sales, and eight percent for uh food and beverage sales.

Uh the BLA has recommended approval.

And then the second item requests is approval of a lease termination agreement with SSP America Incorporated, which operated the space of sweet maple in terminal two.

Uh the lease was awarded in March 2018 as a 10-year uh tenure agreement with a minimum annual guarantee of 250,000 dollars and a lease deposit of 125,000.

Over the past eight years, sweet maple has consistently um underperformed on a sales per square foot basis, um, and the airport believes that approving this termination will allow the airport to relocate an upcoming retail market place into the former sweet maple space that it currently occupies, freeing a larger temporary retail marketplace location for future passenger lounge in response to the growing demands.

Um, I'm happy to answer any questions and um after the BLA report.

Thank you.

Item 10 is a resolution that approves a new lease of airport property to Hotel Zoe LLC for a traveler's retreat in terminals one and three.

The minimum guaranteed rent is $350,000 a year, which would translate to $4.2 million dollars over the initial 12-year term of the lease.

15% of that goes to the general fund as part of the airport's service payment to the general fund every year.

So that would be about six hundred and thirty thousand dollars over that initial twelve-year term.

We recommend approval of item 10.

Thank you.

Thank you.

I don't have additional questions.

I appreciate your presentation today.

And so with that, let's go to public comments on these two items.

I guess if we have any members of the public who wish to address this committee regarding these items 10 and 11, that was your opportunity.

Madam Chair, we have no speakers.

Seeing no public comments, public comment is now closed.

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

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

Vice Chair Dorsey.

Dorsey, I, Member Sauter.

Soder, I chair Chan.

I.

Chan, aye.

We have three eyes.

The motion passes.

Thank you.

Thank you.

And Mr.

Clerk, please call items 12 and 13 together.

Item numbers 12 and 13 are resolutions authorizing the office of the district attorney uh attorney to accept and expend the following.

Item number 12 is a grant in the amount of approximately 92,000 for the term of July 1st, 2026 through June 30th, 2027.

Approximately 92,000 through June 30th, 2028, and approximately 92,000 through June 30th, 2029 for a total not to exceed amount of approximately 275,000 from the California Victim Compensation Board for the grant term of July 1st, 2026 through June 30th, 2029, to continue the criminal restitution compact, should the parties agree to an amendment as allowed under the provisions of the grant agreement.

And item number 13 is a gift in the amount of 200,000 from the Chris Larson Fund facilitated by the Silicon Valley Community Foundation through five keys to support a women's initiative project restore women's housing for victims of crime geared towards servicing families of violent crime for the purpose of public safety prevention efforts.

Madam Chair.

Thank you.

And today we have the District Attorney's Office here.

Good morning.

My name is Priscilla Conception.

I am the Deputy Chief of the San Francisco District Attorney's Office Victim Services Division.

I would like to thank the Board of Supervisors for your time and consideration today.

The advocates in the Victim Services Division are committed to informing victims and survivors of their right to restitution and work diligently to pursue restitution on their behalf.

Restitution plays a vital role in helping victims and survivors recover financially from the losses they have experienced.

The purpose of this grant is to ensure the effective administration of restitution fines and restitution orders.

The victim services division employs a restitution specialist who is responsible for pursuing restitution owed to the California Victim Compensation Board and works closely with victim advocates and assistant district attorneys to support restitution efforts and maximize recoveries.

Today, the San Francisco District Attorney's Office is respectfully requesting the board's retroactive approval to accept and expend a grant in the amount of 275,391 dollars from the California Victim Compensation Board for the Criminal Restitution Compact Program for the grant term of July 1st, 2026 through June 30th, 2029.

In regards to item number 13, for the past nine years, I've had the privilege of working at the San Francisco District Attorney's Office, supporting victims and survivors of crime, with a particular focus on women and children.

Throughout my time, one of the significant gaps we've identified is the need for a safe, supportive place where women and their children can begin to heal after experiencing violence.

To address that need, we are launching a new women's initiative called Project Restore.

Project Restore will provide respite in a safe, healing centered environment that reduces retraumatization and supports the physical and emotional stabilization of women and families in the aftermath of violent crime.

Today, we are seeking the board's retroactive approval to accept and expend a gift of $200,000 from the Chris Larson Fund, facilitated by the Silicon Valley Community Foundation to support the implementation of Project Restore.

This gift will directly support victims and survivors by providing essential needs such as food and wellness activities.

Thank you for your consideration.

Let's go to public comment on these two items.

Yes, we're opening public comment on both these items 12 and 13.

If we have any members of the public question address committee, Madam Chair, we have no speakers.

Seeing no public commons, public comments now closed.

Thank you.

Well, thank you.

A roll call, please.

And on that motion by Vice Chair Dorsey that we refer both resolutions to the full board recommendation.

Vice Chair Dorsey.

Thank you, and the meetings adjourned.