City and County of San Francisco Wednesday, January 29, 2020
Morning, everyone. The meeting will come to order. This is the January 29, 2020 regular meeting of the budget
and finance committee.
I am sandra lee fewer, chair of the committee.
I'm joined by supervisors
mandelman and dean preston.
Our clerk is Ms. Linda wong.
I would like to thank SFGovtv for broadcasting this meeting.
Madame Clerk, any announcements?
>> Clerk: make sure to silence
all cell phones, complete
speaker cards and documents to
be included should be submitted to the clerk.
Items acted upon will be on the
February 4 board of supervisors. >> item number 1 is resolution
approving a second amendment to the grant agreement between the
city and institute on aging for the community living fund to
increase the amount of the grand
by $1 million not to exceed
$11.6 million, with no change to
the term.
>> Supervisor Fewer: thank you. Colleagues, today we have sandy from the department of
disability and aging services. Colleagues, you May remember this was continued from last week.
We approved some amendments that were substantive, so we needed
to bring it back, wait a week.
So we heard the presentation last week and if my colleagues,
any comments or questions on that?
Let's open up for public comment.
Any members of the public want
to comment on item number 1? Seeing none, public comment is closed.
i would like to move this to the board with positive recommendation.
>> Clerk: the legislation itself
has passed. The current amounts, though,
there is no need to amend this.
>> Supervisor Fewer: perfect. Thank you very much.
Can you please call item number 2.
>> item 2 is a resolution
approving authorizing the
amendment of an existing lease
with turk and eddy in what is
refinance 100% affordable
82-unit multifamily rental housing development and authorizing the director of property and the mayor office of housing and community development to execute documents.
>> Supervisor Fewer: is it holly faust? Thank you.
>> yes, I'm here to gain approval for the amended and restated ground lease. The original ground lease was
executed in 2009.
This amended and restated ground
lease is a requirement of the
project sponsor's new refinancing, not financing with the city. There are no changes in the financing with the city.
There is no new funding from the city on this. The terms of the ground lease
remain the same, 55 years with a
44-year extension. Planning has waived their review and approval for this. There is no general plan referral required because there is no financial impact and no
change to the property with the
ground lease amendment.
the ground lease amendment is consistent with all of the
policies and other ground leases for affordable housing approved
by the board of supervisors.
>> Supervisor Fewer: thank you very much. >> thank you for your attention.
>> Supervisor Fewer: thank you.
There is no report on this. Any comments? From my colleagues? Seeing none, let's open up for public comment? Any members of the public, seeing none, public comment is closed. I'd like to move this to the
board with a positive recommendation. Take that without objection? Thank you. Item number 3. >> item 3 is a resolution
declaring the intent of the city
to reimburse certain expenditures to submit an application and related documents to the california debt
limit allocation committee to
permit the issuance of residential mortgage bonds not
to exceed $61.6 million for 55 mason street.
>> Supervisor Fewer: thank you very much.
And caroline Mccormack. >> good morning.
I'm a project manager on the acquisition and preservation team at mocd.
I'm here to present on the proposed bond issuance for ambassador hotel. The purpose of the resolution is
to approve the hearing the city
conducted on January 6, 2020, in
order to comply with the federal
tax equity and financial responsibility act for
ambassador hotel and ratify and
approve other actions to make
the bond possible.
Including submittal to secure allocations of bond for the project.
The proposed issuance would be
conduit financing and would not require the city to pledge
repayment of the bond.
The ambassador hotel consists of rehabilitation of the building.
All of the units are single room occupancy units.
The project is pursuing a hybrid
tax credit structure, including
4% rehabilitation credits and 9% from the city and county of san francisco set aside.
This request for an allocation
of bond pertains to the 4% portion of the project.
The project team anticipates that approximately 102 units
will be allocated to the 4%
portion and the remaining 32 to
the 9% portion. 100% of the units in the building will be affordable to
households earning less than 60%
ami and no residents will be
displaced, but temporary offsite
relocation will be required to
facilitate the rehabilitation. Plans to return to the board in
late 2020 and financing for the
project is anticipated to close
in q1 of 2021 and that's when
construction would start for the rehabilitation. I'm happy to answer any questions that the committee members have about this project.
And I'm also joined by emily, project manager who can also answer more specific questions.
>> Supervisor Fewer: thank you very much. There is no report on this. Any comments or questions from my colleagues?
Seeing none, let's open up for public comment. Any members of the public? Seeing none, public comment is closed.
I'd like to make a motion to
move this forward with a
positive recommendation Madame Clerk, item number 4 and 5 together.
>> item 4, resolution to authorize the fire department to
accept and expend a grant in the
amount of $612,000 to purchase rescue tools and equipment for the performance period of
September 5, 2019 through
September 4, 2020. Item 5, resolution authorizing the fire department to accept and expend a grant in the amount
of $341,000 from the federal emergency management agency to purchase marine equipment for
the performance period of September 1, 2019 through August
31, 2022.
>> Supervisor Fewer: thank you very much. And mark corso is here in the fire department.
>> good morning, supervisors, here to present on these two items.
The first is approval to accept
and expend fiscal year 2018, assistance to firefighters grant
in the amount of $612,000.
There are few projects that the
department was awarded funding
for, including battery powered
tools, supplementing our hand tool inventory.
There is a match of $61,000 that is in the department's budget.
The second item is fiscal year 2019 security program from fema. The approval is for the department to expend an award in
the amount of 341,625.
There were three main projects
the department was approved funding for.
Refurbishment of the rescue
boat, the purchase of two
watercraft for marine response and variety of marine equipment. There is a match of
approximately $114,000 that is included in the budget's department. I'm happy to answer any questions.
>> Supervisor Fewer: thank you very much.
There is no report on both these items. Any comments or questions from
colleagues about fire boats or anything else?
Seeing none, let's open for public comment. Anyone want to comment? Seeing none, public comment is closed.
Like to move these two items to the board with positive recommendation. We can take that without objection.
Colleagues, I am reminded that I need to excuse supervisor walton from today's meeting, so I'd
like to make a motion to excuse supervisor walton from the meeting. May we take that without objection? Thank you very much, colleagues.
Madame Clerk, item number 6.
>> item 6 resolution authorize the fire department to accept and expend a grant in the amount of $1 million from the california office of emergency services to purchase one hose tender for the performance
period of July 1, 2019 through
June 30, 2022.
>> Supervisor Fewer: we have mark corso from the fire department, but I would like to make an opening comment if you don't mind.
So I would like to extend my appreciation to assembly member, phil tinge.
I called him and asked him for this hose tender this is
necessary out on the west side
as we don't have an extensive
water suppression system.
And although we will be voting
as voters to pass prop b, which
would give us more the building
of this network of water supply,
in the meantime, these hose tenders that are custom-built, so expensive, a million dollars,
we needed them.
And so the mayor put them in the budget. I asked for an extra one. It is short.
But I wanted to thank phil tinge
father -- for getting the money
out of the budget for this one. It's going to keep people safe in the incident of catastrophe and large fire.
I wanted to thank the assembly
member for thinking of us and
appropriating the money from the state budget.
>> good morning, supervisors.
Mark corso, not a grant allocation, but from the state budget in the amount of $1 million for the purchase of one hose tender. It's a special vehicle to assist with water supply issues in the
city and is used to supplement the fire fighting system.
We also, too, on behalf of the
department would like to thank
the assembly member ting for his advocacy, and supervisor fewer
for her advocacy in this program.
>> Supervisor Fewer: any
comments or questions, like what is a hose tender? No. Okay. Any members of the public want to comment? Seeing none, public comment is
closed. I'd like to make a motion to
move this to the board with a
positive recommendation. Take that without objection. Call item number 7. >> item 7, resolution authorizing and approving the
lease of 1271-1275 mission
street consistings of 8750
square feet and tenants in
common, for a six-year term with
two five-year options for renewal to commence around
February 1, 2020 at initial
monthly base rent of $48,000 for
total wanl rent of $577,000 with
3% annual adjustments.
>> thank you.
I know you're claudia.
In the real estate department.
>> good morning. Again, director of the real
estate division of the city administrator's office. The director did desire to be here and attend today, but he
had to leave for a family member out of state. So before you, for your consideration, is a resolution for a lease for new space for
the digital services department and data S.F.
The space is located at 1275 mission street.
Just very briefly, digital services responsible for improving the city's website, so
that residents can easily get
services, permits and apply for affordable housing online while
data S.F. Works across all departments to make data available internally to support
use of data in decision-making.
Digital services currently has 29 full-time employee positions
and is expanding to 41.
Data sf has five positions here
at city hall. They're going to combine and grow up to 46 full-time positions. They're currently in about 4,000 square feet. They can't fit there.
And where they're located currently is not -- it's
sub-prime for the programming. And there might be safety issues because it's off the beaten trail, kind of near an alleyway.
And given their hours, staff
doesn't always feel safe.
The current lease is an annual
lease and is up for renewal. Digital services asked for
assistance in finding a larger space.
The larger space at the proposed
site on mission is more aimable to their work.
It's 8700 square feet, twice the size of where they are in. In addition, the city gets the entire building.
The initial rent is about
$48,125 per month or $66 per square foot.
That was based on appraisal and review.
And to be honest, that is below fair market rate.
The city will pay an annual
adjustment of 3%, plus utilities
and services as they do now where they're currently at.
We will be attempting to get the
building onto sfpuc power, because we have the whole building and therefore we can do that.
That will lower the rates, hopefully. The landlord is also responsible
for security and putting in a card entry system.
The landlord is giving us
improvement allowance of $5,000
to use in the initial term.
There is furniture and equipment left at the site.
And rather than selling it, the
landlord is willing to rent it to us for the entire term.
At the end of the term, we can keep it.
It's worth $100,000.
That saves the city time and money not to have purchase desks for the new staff members and
staff members that don't have desks at this time.
That savings along with the tenant improvement allowance equals about one month's rent.
For the first time, I was actually going to disagree with
something that the B.L.A. Did,
but I've spoken with severin and
in light of several conversations, I think, between severin and the city attorney,
between the director and supervisor fewer and that maybe this needs to be looked into a
little longer, I think we've
come to an agreement, and
correct me if I'm wrong, that
we'll leave the resolution as
drafted, however, real estate --
I'm saying this on behalf of the
director, will come back at the options even though it says we're authorized not to, I think
we can say that gives us authorization to come back, so
we'll agree to come back for the options in this situation in
this lease which gives us all
time to discuss further the
issues that are a concern, but allows this lease to move forward, because if it doesn't, I think digital services will be
out on the sidewalk.
So unless you have any questions, carrie bishop is here
from digital services if you have programming questions. I can answer questions regarding
the lease itself.
>> Supervisor Fewer: could we
have a report, please? >> good morning.
Severin campbell. Yes, she has summarized the lease. We have a brief summary of the
lease in exhibit 1 on page 8 of the report.
This lease did have an appraisal
in conformance with the administrative code. The discussion here today and in the original recommendation,
this is a six-year lease with
two five-year options. At the end of the initial six-year term, the lease does
reset to the higher of the rent
at the time of the expiration or
95% of fair market value. We're going to ask slightly different, we're going to recommend amendment to the resolution in which we're requesting a report back from the director of real estate
prior to the exercise of the option to extend after the end
of the initial six-year term.
This would be slightly different. We're not suting this to board of supervisor approval, but asking for amendment for a
report back at that time.
>> Supervisor Fewer: thank you very much. any questions? Let's open up for public comment?
Any members of the public like to comment?
Seeing none, public comment is closed.
Like to make motion to approve the amendment.
Then I'd like to make a motion
to move this board as amended. Please call item number 8.
>> item 8 is a resolution authorizing the office of
cannabis to accept and expend a grant award in the amount of
$1.3 million from the california
bureau of cannabis control, authorizing the office of cannabis to execute the
agreement with the bureau of
cannabis control and the extensions amendment or contracts subsequent on behalf of the city.
>> Supervisor Fewer: I believe we have Mr. Eugene hillsman here.
>> if you give me a second, I'll
be pulling this up.
>> Supervisor Fewer: this item
has no B.L.A. Report.
>> good morning, chair fewer,
supervisors, my name is eugene
hillsman, director of the office of cannabis. For the local equity funding. I'm also available to answer any potential questions that you
have about the process. Unfortunately, director rodriguez is feeling under the weather and is unable to join us
this morning. San francisco's equity program was developed to support
individuals negatively impacted
by the war on drugs by creating opportunities to own and be hired by cannabis businesses.
senate bill 1294 approved by senator bradford allowed for san francisco to apply for funds
from the state level bureau of
cannabis control to assist applicants enter the cannabis market in the state.
The bill requires an eligible local jurisdiction that received grant funds pursuant to the provisions to submit an annual
report to the B.C.C. That contains specified information
on the use of the grant funds and specified demographic data. The office of cannabis applied
for the funds in August of 2019
and received $1.3 million. The office held two listing sessions to discuss the resource
needs from the city's equity applicants in order to inform the city's application and distribution of these funds.
In January of 2019, the office
of cannabis held a listening session to get input about what
the applicants needed to inform the construction of the application.
In November 2019, the office of cannabis held another listening
session to hear directly from equity applicants about their
current needs.
Through these meetings, calls and office visits, equity
applicants expressed a clear and consistent desire to directly receive funds to support the
development of their cannabis businesses.
They also describe the need to access capital, find real estate across the city and receive technical assistance, including
access to legal services, account management and education.
It is our goal to align our distribution of funds with those requests. And I'm happy to answer any questions you have about the
process or our proposal.
>> Supervisor Fewer: thank you very much. Any comments or questions from my colleagues? Let's open up for public comment. Any members of the public like
to comment on item 8?
Please step on up. >> good morning, Madame Chair
and board of supervisors. I'm an equity applicant, I'm requesting that the resolution
or amendment be drafted for the $1.3 million in equity funds to
be given directly to the equity
applicants. I welcome the opportunity to work on any resolution regarding this effort. According to the city controller's report, there are
133 applicants who will not ever be able to open a cannabis business in san francisco.
And it appears that we are to be
regulated as only workers in the industry. A few equity businesses that
have been opened had wealthy
investors and they're not in abundance. Equity needs location reduce
lease or at least five years in order to operate and get a business established. Thank you.
>> Supervisor Fewer: thank you very much.
Next speaker, please.
>> good morning, supervisors, my
name is reese. I am equity applicant.
I'm the first woman in san
francisco, or the second to own a potential cannabis, where
we're supposed to be open in October.
And we're not able to open
because of a process a judge put an injunction on us.
But that being said, I am a
native of san francisco.
This the city took my whole family. When I come here, I have no one
with me because of that.
When I say the judge took my
mom, had to bury her at 16.
I have my grandma died from crack. My grandfather died from crack.
My whole immediate family is on crack or died from crack. I have no support system.
This is all I have.
And the fact that I am able to
get this far in life and for my
city to fail me with my family,
and the only person that is really living is my uncle, he
can get free needles, but I
can't get a grant to continue to open a business that I raised
over $300,000 so I can the first owner in the state of california
as a woman. And I am having resources to get there is heartbreaking.
It's heartbreaking. You guys already took enough from me.
My son doesn't have his grandparents.
And I think I gave him a great life, but we need these grants so I can be better and so I can
show people we can do it.
>> Supervisor Fewer: thank you very much.
Next speaker, please.
>> the city should be April -- ashamed of themselves.
Only two supervisors are sponsoring this. I shouldn't be surprised considering they've only put
$90,000 in funds in services and
the equity fund remains empty.
Today I ask you to pass this legislation to fund applicants
directly as the law states. I don't want the money -- the money shouldn't go to city services. If you're not an equity applicant like the woman who
just came up, or not serving the center, this money is not for you.
I remind you that we paid for this money.
And damages from the effects that you've seen from her statement is paying for this. I ask that the money be distributed as fast as humanly possible with the resources and the full resources of san francisco to do that.
I ask that the money go direct
funding in the amount of 750,000.
I ask that you have an equity
office space in the amount of $380,000. I ask that you put money for equity events and programming like the success center in the amount of $08,000.
I ask that you move to have an
equity permit expediter in the amount of $130,000.
Please move this to the board with full recommendation.
>> Supervisor Fewer: thank you very much. Next speaker, please.
>> hello, my name is langford brown. I'm an equity applicant.
My issue is the fact that we all feeling a sense of being red lined. all over again.
And so we're impacted and I feel
like these funds right now, particularly, those of us who is
in the second phase and have
letter of intent, we now need
that additional funding to help when planners come and tell us
about the build-out and the startup expenses associated. We now need help for this.
So this is where we're impacted.
We have letter of intent, but we need further funding to continue on. Thank you.
>> Supervisor Fewer: thank you
very much, sir.
>> good morning, I'm amber morris. I would like to commend the
office of cannabis for applying and securing these funds and
request that the board move these funds forward. The well intended equity program
is not working. We see people hemorrhaging money
and we need to get them money as quickly as possible. We're requesting that the equity applicants are able to get direct grants. That the money be allocated for
property that can be used to share spaces.
And for an application expediter
to help equity applicants with the application process.
What we found, there is a lot of bureaucracy in the process and
we would urge the supervisors to make sure there is least amount
of bureaucracy in the process as
possible for getting the money
to the equity applicants. Thank you.
>> Supervisor Fewer: thank you. Next speaker, please. Good morning.
i'm a native of san francisco
and equity applicant. The equity program is a
wonderful program given the
benefits that we've had to suffer through. We are doing our best by completing the application, going through the application
process, being verified, out looking for property, trying to
go through our incubators, working through all the steps they've put forth for us, but the funding is a problem. When we come into our startup. There is no startup money for us.
If you think about it, we've gone through the trainings, we've gone to the colleges,
we've done everything.
I went to learn about the cannabis industry, but then
there is funds to start the business.
Just to start, starting up llc is a thousand dollars pretty much. With the permit process, not to
mention trying to go through the incubator stages. The funds will help us to be able to start our businesses to
be able to collaborate within
san francisco, to be an effective equity applicant means that we would need the funds to
be able to do that. Thank you.
>> Supervisor Fewer: thank you
very much. >> morning.
My name is angela.
I'm from success centers and I work with equity applicants here in the city. I hear lots of stories like
reese and they bring me to tears
because we need help.
and I'm so happy that the state
has sent funds for equity, the
equity community here.
We need help to also continue
our program to work with these folks that have been affected by
the war on drugs.
And so I am very thankful to be here and very happy that you are
going to release these funds to
the office of cannabis.
Eugene and marissa have done an excellent job trying to do what
they're doing without the staffing.
So I'm hoping that we can get
some things going so we can have
a spirit of success that goes through with equity.
So thank you so much for your time.
>> Supervisor Fewer: thank you.
Next speaker, please. >> hello. My name is jocelyn.
I've been working with oakland equity program through technical
assistance and make green go.
And what my company does is we
provide all the data and analytics for the cannabis industry, so I've been working with the applicants personally and helping them answer a lot of the questions in the applications that are going to make sure they're set up for success when they open. So one of the things that I've been learning as I've been working with this program, is that it's a lot of volunteers. And we need people that are
actually going to be on staff and doing the executional work,
because there are people like me going and providing consultant work, helping them understand
the market, but there has to be
dedicated people that are
accountants, all the really execution work to help set them up for success. One of the things I'm concerned about in san francisco and I'm a resident of san francisco, is
the high saturation of already
existing retail shops. We have 37 shops here. Equity applicants are the next
round to get licenses, but with
such saturation in the 7 by 7 city, if they're not set up for
success in the beginning, their chances to compete in a saturated market is minimal.
So they really need this funding to provide the actual
executional work here. Thank you.
>> Supervisor Fewer: thank you very much.
Next speaker, please.
Hi.
I'm a native of san francisco.
Raised my children out of the bayview.
I'm a little emotional please excuse me.
One of my sons ganged up and got
into a bunch of problems and the other one didn't.
The point I would like to make about the community, bayview
hunters point, I sent both sons
to college, both graduated and are successful.
We're typically put in a box
where there are things we can't
do or figure or out.
But we can do and figure it out.
I got approved, my equity number got approved three years ago.
I started my own business, so I
can try to fund my cannabis business.
Still unable to do so.
So I would appreciate it if you
would take a deep look at this.
Take a look at us without generating any negative opinions
and give us the support that we need. We're awesome. We're creative.
And we give back to our own
community and those less
fortunate as well as us. Thank you very much.
>> Supervisor Fewer: thank you. Next speaker, please. >> good morning, my name is joyce. I'm equity applicant.
I'm here today to represent the equity program.
And what I would like to say to
the supervisors, would you guys have some consideration to
release the funds that is needed
for the project that needs to be
done for the dispensaries or whatever the situation we might
need help in. I think that the money needs to
be released because it is hard out here without that we won't even succeed in life with this program. It would be a failure if we don't get no help.
And thank you.
>> Supervisor Fewer: thank you
very much. >> good morning. My name is terrance.
I was your chair of the san francisco cannabis legalization task force for three years. We developed a series of recommendations that we gave to the board and, of course, funding for the equity program was a priority in those recommendations. To give a little perspective to
all that you're hearing this
morning, it takes about $1.5
million to open a business in cannabis here in san francisco.
and we're approving a grant for
every equity applicant in this room and beyond that is less
than the cost of opening one store.
So I urge you to take this first
step and to continue the promise
of follow-through so that equity is not a trap. And it is in fact what it was intended to be, a way out for everyone.
Thank you.
Good morning. My name is morris kelly.
I'm a san francisco native,
verified equity applicant. And I'm really able to stand
here before you because of the support of my community, because
we've been able to rally around
each other, been able to teach each other, help each other. We've been able to support each
other to try to get through this process.
Like one person said before me,
we've had to be uber creative.
We've had to be resourceful to
even get to the point to stand here before you.
Because as you know, things happen fast for certain people
and slow for others.
I feel like we are doing everything that is asked of us to make this program successful and there is not much more we can do.
So without the support of the
city, without extra help to the office of cannabis, we're just going to be sitting here coming
to these meetings for another
year saying the same thing.
>> Supervisor Fewer: thank you
very much. Any other public comment? Seeing none, public comment is
closed.
any comments, questions from colleagues?
Supervisor preston.
>> Supervisor Preston: thanks.
I just want to be added as cosponsor and thank everyone for
coming out and look forward to other ways to expand on this program.
>> Supervisor Fewer: thank you very much.
I also just want to mention that the office of the controller has
done a report on this and also
given recommendations.
I authored a resolution to create an oversight committee because we were not seeing action, any movement on the equity applicants. And also to have experts at the table to actually advise the board of supervisors.
So I just want you to know, thank you for coming out today.
We hear you.
And we are, I think, going to
have a hearing on the results of
what the controller actually recommends and what the board
can do to help.
Having said that, there is no B.L.A. Report. I would like to move to the
board with positive recommendation. Take that without objection. Please call item 9. >> item 9, establishing the
proposal united nations limit of
$5.5 billion for the school year 2019-20.
>> Supervisor Fewer: thank you.
We have michael mitten from the controller's office. This is something I believe we
approve on annual basis?
. >> good morning.
I will talk briefly about this
year's appropriation limit,
called the gam limit.
It was started in the 1970s and
is generally a rule to limit appropriations from taxes.
It's a rule to limit taxes.
Each year we're allowed to increase the limit by two factors, a population factor
fort growth in san francisco.
This year, it's 0.33%.
Our file goes back to 1999 and
that is the lowest population increase in the last 20 years.
The other factor is the cost of living factor. We could use -- we're allowed to
use the greater of california
personal income growth or the
assessment growth due to newcomer shall construction. This year, two we've had are in the final year.
The soda tax and the transfer tax. But we'll still have the
cannabis tax and the T.N.C. Tax which is now just beginning in the coming years.
Beginning in 2021, the voter override will be $55 million.
As you know, we have three tax measures that are currently in litigation.
Those revenues are not being recognized at this time.
And they are not applied to the gam limit at this time.
When they were recognized, the -- when they are recognized,
they'll be applied in the fiscal year. The window starts when the measures are approved.
So if it's after the four-year
window, it will be counting toward the gam limit.
The voter improved increase,
we're up to 19-20 limit of $5.5 billion. there are several things we can exclude.
This is voter approved debt, qualified mandate, after removing those, our tax proceeds are $4 billion.
And that leaves us $1.5 billion
below the limit this year.
That's it.
>> this is the annual approval
by the board of supervisors.
If you look at table one, page
13 of our report, the taxable
income that is subject to the
appropriations limit is $4.1 billion.
Table 2 on page 14, shows the adjustments and the calculation
of the appropriation limit of $5.5 billion and then following
that, table 3 on page 15, that shows there is two different formulas that can be used and
the impact on the appropriations
limit of the each of the formula
that is used, as you can see the
$5.5 billion, the formula has
been used by the controller's
office and we recommend a
>> Supervisor Fewer: thank you very much.
Any members like to comment?
Public comment is closed.
Like to make motion to put this to the board with a positive recommendation.
