Budget and Finance Committee

Summary

This ordinance updates San Francisco's Health, Business and Tax Regulations, and Public Works Codes to align with recent amendments to the California Retail Food Code. It introduces new definitions for 'compact mobile food operations' (CMFOs), 'mobile support units,' and 'permitted auxiliary conveyance permits.' The ordinance establishes annual permit and plan check fees for these new categories, while also removing existing annual food facility surcharge fees. Additionally, it expands the Department of Public Works' authority to regulate street vending, specifically including CMFOs, and mandates consultation with the Department of Public Health and Fire Department on street vendor rules. The Department of Public Health (DPH) will now classify CMFOs into Low Risk ($188 annual permit), Moderate Risk ($377 annual permit), and High Risk ($502 annual permit), with Auxiliary Conveyances also at $188. Plan check fees for CMFOs range from $188 to $502. Notably, all city agency license and permit fees for CMFOs are waived under this ordinance.

Citizen Impact

This ordinance aims to clarify regulations for mobile food vendors, potentially making it easier for them to operate by aligning with state law and waiving city agency fees for compact mobile food operations. Residents may see a wider variety of mobile food options, and new fee structures for permits and plan checks will apply to these specific types of operations.

Confidence

high

Summary

This resolution approves a 10-year lease agreement for the San Francisco Employees’ Retirement System (SFERS) to relocate its offices to 111 Pine Street, Floors 8, 9, 10, and 11, encompassing 47,482 rentable square feet. The move is necessitated by SFERS's significant growth in managed assets (from $18.4B to $38.9B for Defined Benefit Plan and $2.4B to $6.5B for Deferred Compensation Plan) and an increase in members (from 59,400 to 81,200), making its current 1145 Market Street location inadequate.

Financial Details:

• Initial annual base rent: $2,089,208 ($44 per square foot), with 3% annual increases.
• Rent Credit: 12 months of abated rent (months 1-4, 13-16, 25-26, 119-120), totaling approximately $2,237,427.97 over the initial term.
• Tenant Improvements (TI): Landlord provides a $4,748,200 allowance ($100 per square foot), with SFERS contributing up to $4,748,200 for excess costs. The total estimated TI cost is $8,466,392. The landlord is also responsible for obtaining LEED Gold Certification for the improvements.
• The lease includes two five-year extension options at fair market value.

Building Conditions & Services:

• The lease is full-service, covering security, janitorial, utilities, taxes, insurance, and common area maintenance. SFERS will pay its proportional share of increases in utilities and operating expenses over the 2026 base year.
• A 1994 environmental survey identified trace Chrysotile asbestos in gypsum wallboard joint compound and residual mastic, and noted an unused 300-gallon diesel aboveground storage tank (AST) in the basement, recommending its closure. A nearby Leaking Underground Storage Tank (LUST) site at 36 Battery Street (200 ft upgradient) was flagged with a high potential to impact the property due to past petroleum hydrocarbon contamination.
• A relocation clause allows the landlord to relocate SFERS after 7 years for code-related work, provided 9 months' notice, similar space, and all relocation costs are covered by the landlord.

Citizen Impact

This relocation ensures the San Francisco Employees’ Retirement System can continue to effectively manage $45.4 billion in city employee retirement and health care trust funds, providing adequate space for member services and operations. While the city incurs significant lease obligations, the move is critical for the long-term stability and accessibility of a vital public service.

Confidence

high

Summary

This resolution approves Amendment No. 2 to an agreement between the Department of Public Health (DPH) and YMCA of San Francisco, significantly expanding mental health and substance use disorder prevention services for children and youth. The amendment extends the agreement's term by one year, from June 30, 2027, to June 30, 2028, making the new total term January 1, 2018, through June 30, 2028. It also increases the contract amount by $1,590,148, bringing the new total not to exceed $11,577,751.

The YMCA will continue to provide a broad range of culturally appropriate services, including outpatient mental health, educationally-related mental health services, intensive supervision and clinical services, and community-based violence and trauma recovery programs. These services target vulnerable populations, such as low-income families, chronically truant youth, and those involved with the juvenile justice system, particularly in high-need areas like Bayview, Potrero Hill, and the Western Addition. The amendment also updates standard contractual clauses, including robust data privacy and security requirements in compliance with HIPAA.

Citizen Impact

This expanded agreement ensures continued and increased access to vital mental health and substance use prevention services for San Francisco's children and youth, especially those in vulnerable communities. It helps address critical issues like trauma, truancy, and juvenile justice involvement, fostering healthier and safer environments for young residents.

Confidence

high

Summary

This resolution authorizes the Treasure Island Development Authority (TIDA) to execute a Standard Agreement with the California Department of Housing and Community Development (HCD) for a total award of $45,109,140 under the Affordable Housing and Sustainable Communities (AHSC) Program. The award is split into two main components:

• A $30,000,000 loan to IC4.3 Family Housing, LP for a 100% affordable housing project at Treasure Island Parcel IC4.3. This project will deliver 150 units, including 61 replacement units for supportive housing, 30 transition units, and 58 units through a city lottery. The development will be all-electric and include a childcare facility.
• A $15,109,140 grant to TIDA for public transportation improvements and community programs on Treasure Island. This grant will fund up to 10 years of electric ferry service between Treasure Island and downtown San Francisco, 10 new bus shelters, 3,000 lineal feet of pedestrian pathways, and 1.0 mile of bikeways. Additionally, $3.5 million is allocated for the first block of Eastside Gardens Park adjacent to Parcel IC4.3, and $664,140 for programs including workforce development ($150,000), anti-displacement efforts ($150,000), and 3 years of free transit passes for residents ($364,140).

The agreements will be in effect from their execution date through March 30, 2046.

Citizen Impact

This initiative will bring 150 new affordable homes to Treasure Island, including supportive housing and units for existing residents, addressing critical housing needs. Residents will benefit from enhanced public transportation options, including new electric ferry service and improved pedestrian/bike infrastructure, reducing commute times and promoting sustainable travel. Additionally, programs for workforce training, anti-displacement support, and free transit passes will directly improve economic stability and quality of life for low-income households.

Confidence

high

Summary

This resolution approves the third contract amendment with IMCO Parking, LLC and the San Francisco Municipal Transportation Agency (SFMTA) for the management of two additional off-street parking facilities under the jurisdiction of the Port of San Francisco: Pier 30-32 (1,300 stalls) and Pier 70 (287 stalls). This amendment increases the contract amount by $12,000,000, bringing the total contract value to $219,000,000. The increase covers additional monthly management fees of $3,174 (based on $2.00 per added parking space) and approximately $167,000 per month in reimbursable operating expenses over the remaining 71 months of the contract term. The amendment is effective March 1, 2026, with no changes to the original contract term (February 1, 2023, through January 31, 2032). The Port of San Francisco will reimburse the SFMTA for all costs associated with managing these facilities, meaning there is no direct funding impact to the SFMTA budget.

Citizen Impact

This amendment expands professional management to 1,587 additional parking stalls at Pier 30-32 and Pier 70, potentially improving parking availability and operations in these Port areas. Residents will not see a direct tax increase as the Port of San Francisco is responsible for reimbursing all associated costs.

Confidence

high

Summary

This resolution approves the second contract amendment with LAZ Parking California, LLC for the management of two off-street parking facilities: Triangle Lot and Seawall 321. These facilities are under the jurisdiction of the Port of San Francisco. The amendment increases the contract amount by $9,000,000, bringing the total contract value to $189,000,000. The contract term remains unchanged, running from February 1, 2023, through January 31, 2032, with the amendment effective March 1, 2026.

Citizen Impact

This contract amendment will increase the total amount allocated for the management of two Port of San Francisco parking facilities. Residents will not see a direct impact as the Port of San Francisco will reimburse SFMTA for these costs.

Confidence

high

Summary

This ordinance appropriates funds from the General City Reserve for two distinct purposes for Fiscal Year 2025-2026:

• $4,000,000 to the Department of Emergency Management (DEM) for expanded street conditions staffing.
• $150,000 to the Human Rights Commission (HRC) for community initiatives.

The total appropriation is $4,150,000. The Controller is authorized to make necessary accounting adjustments. The ordinance is sponsored by Mayor Lurie and Supervisors Sauter and Sherrill.

Citizen Impact

This action will fund expanded staffing for street conditions managed by the Department of Emergency Management and support community initiatives through the Human Rights Commission, utilizing funds from the General City Reserve.

Confidence

high

Summary

This item is a hearing to discuss the Mayor's Budget Instructions for Fiscal Years (FYs) 2026-2027 and 2027-2028. The accompanying documents reveal a significant fiscal challenge for the City and County of San Francisco.

Fiscal Outlook:

• A projected two-year deficit of $936.6 million ($296M in FY26-27 and $640M in FY27-28).
• Expenditure growth is outpacing revenue growth, with a projected five-year expenditure increase of $1.8 billion compared to a revenue increase of $617 million.
• Key drivers of expenditure growth include salaries and benefits (over $820 million increase over five years), required baseline contributions, citywide operating costs, and inflation.
• Revenue loss due to H.R. 1 is estimated to exceed $300 million over two years.

Mayor's Budget Instructions:

• Departments are instructed to reduce General Fund spending by $400 million ongoing through restructured service delivery and program elimination.
• Priorities include maintaining clean, safe, and welcoming public spaces; keeping streets safe; economic revitalization; transforming health and homelessness systems; making the city more affordable and livable; and modernizing government operations.
• Instructions emphasize eliminating discretionary programs, restructuring departments, reducing overhead, and shifting toward centralized services.
• A calendar outlines key budget submission deadlines through June 2026, culminating in the Mayor proposing a balanced budget to the Board of Supervisors.

Citizen Impact

Residents should anticipate potential reductions in city services or changes in how they are delivered as departments are instructed to cut spending by $400 million ongoing. The city faces a significant deficit, which could impact the quality or availability of public services in the coming fiscal years.

Confidence

high

Summary

This item is a hearing to discuss the City and County of San Francisco's Joint Report and the Five-Year Financial Plan Update for Fiscal Years (FY) 2026-2027 through FY2029-2030. The report, submitted by the Controller's Office, Mayor's Office, and the Board of Supervisors' Budget Analyst, forecasts expenditures and revenues for the specified period and proposes actions to balance the budget. The current projections indicate a significant projected budgetary shortfall, with a two-year deficit of $936.6 million for FY 2026-27 and FY 2027-28, growing to a cumulative deficit of $1.17 billion by FY 2029-30. Key factors influencing these projections include potential federal funding cuts (H.R. 1), assumptions about salary and benefit increases, health insurance costs, pension investment returns, and modest growth in certain tax revenues like business and property transfer taxes, while other local economic indicators like sales and hotel taxes show slower growth. The report also outlines risks to the forecast, including recession scenarios, labor negotiations, and potential impacts of ballot measures.

Citizen Impact

Residents should be aware that the city is projecting significant budget shortfalls over the next five fiscal years, potentially impacting future service levels and the need for difficult fiscal decisions. The report highlights the impact of federal funding changes and rising operational costs on the city's financial health.

Confidence

high

Summary

This ordinance amends the City's Labor and Employment Code to require prevailing wages for all individuals performing street cleaning services under City contracts and grants. This applies to services such as litter abatement, power washing, and steam cleaning of public rights-of-way.

The ordinance, introduced by Supervisor Melgar, adds Section 102.12 to the Labor and Employment Code. It defines "Street Cleaning Services" broadly and mandates that contractors and grant recipients pay workers no less than the prevailing wage rate, as determined by Section 103.2. Contractors must also comply with certified payroll record requirements. The ordinance is prospective, applying only to contracts and grants entered into on or after its effective date, which is 31 days after enactment.

Citizen Impact

This ordinance will ensure that workers performing street cleaning services for the City are paid a fair, prevailing wage, potentially leading to higher quality services. It may also result in increased costs for the City's street cleaning contracts and grants.

Confidence

high

Summary

This ordinance amends the Business and Tax Regulations Code to extend the waiver of certain first-year permit, license, and business registration fees for qualified small businesses. The waiver, originally set to expire, will now continue through June 30, 2027. This extension applies to businesses that are newly forming or opening a new location within the City, provided they meet specific criteria related to their San Francisco Gross Receipts (e.g., $5,000,000 or less annually). The waiver covers initial permit fees, initial license fees, and the initial business registration fee for one year from the commencement of business at a new location or the start of a new business. The ordinance specifies definitions for "Qualified New Business" and "Qualified Business With New Location" and clarifies that renewals and fees collected for other government agencies are not included in the waiver. The waiver will expire by operation of law on June 30, 2027, and the City Attorney is authorized to remove the section from the code thereafter.

Citizen Impact

This ordinance provides a financial incentive for new and expanding small businesses by waiving certain initial fees, potentially encouraging economic growth and job creation within the city. Residents may benefit from increased local business options and a more vibrant commercial landscape.

Confidence

high

Summary

This document is the City and County of San Francisco Controller's Sixth-Month Budget Status Report for Fiscal Year (FY) 2025-2026. The report projects a $614.6 million General Fund ending balance, an improvement of $89.4 million from previous projections. Citywide revenues are projected to be $213.7 million above budget, largely due to strong business tax revenue ($155.2 million above budget) and a rebound in real property transfer tax. Departmental operations show a projected net surplus of $55.8 million. However, several departments, including the Sheriff, Police, and Fire, require supplemental appropriations for overtime. The report also notes ongoing threats to federal funding and the establishment of a Federal and State Revenue Risk Reserve.

Citizen Impact

This report provides an update on the city's financial health, indicating a stronger than anticipated General Fund balance. While this suggests fiscal stability, it also highlights areas of concern such as departmental overtime needs and potential federal funding reductions, which could indirectly impact city services.

Confidence

high