Transcripts For SFGTV BOS Budget And Finance Committees 20240713

Committee i am joined by supervisors walton and mandelman. I would like to thank Samuel Williams and michael from sfgovtv for broadcasting this meeting. Do we have announcements . Please silence cell phones and electronic documents. Submit documents to the clerk. Items today will appear on the march 17th agenda unless otherwise stated due to the deck rarcoronavirus we are asking yoo wash hands and avoid touching high volume surfaces as much as possible. Please call item one and two. Resolution authorizing the department of Public Health to accept 3 million from the Tipping Point community for creation of new Psychiatric Center for two year period beginning january 162020 through january 15, 2020. Two. Resolution authorizing the director of property to lease Real Property located at 11567 valencia street for 404,000 per year for three years with an estimated commencement date of mar1, 2020 to expire on februar. Thank you very much. Supervisor mandelman. Thank you. Colleagues. These two items will allow the department of Public Health to open a 30 bed shelter at 1156 valencia street. It is to extend a 3 million grant to help Fund Creation of the 30 bed Community Hummingbird facility. Two is to enter a lease with Salvation Army for use of 1156 valencia for a term of three years. Soon after i took office in the summer of 2018, i visited the citys first and still only hummingbird place located on the General Hospital campus. It is a 24 hour Behavioral Center with 29 beds serving Homeless People with Mental Illness. With an estimated 4,000 unhoused in San Francisco meeting these suffering from Mental Illness and Substance Abuse it is clear our current 29 hummingbird beds dont come close to meeting the need. We can see every day what happens when we dont have enough places to take unsheltered people. Too many end up in Psychiatric Services or Emergency Rooms or jail. More than half all patients are homeless and between october and december 2019, pes was on diverse upwards of 40 of the time. We also know that far too many people leaving pes are released back to the street to return to the hospital in weeks or hours later. I have been working with the department of Public Health to identify potential sites for one or more hummingbirds in district 8 since my first days in office. I will continue to beat the drum for hummingbird citywide. I live three blocks away on valencia street. I am eager to welcome the first hummingbird to my neighborhood. I want to thank the dent of department of Public Health and mayor breed and prc baker place for helping bring this online. Over the past month, they have worked to hold two Community Meetings providing venue for hundreds of neighbors and Community Members to raise concerns, have questions answered and engage in conversation how the city and neighborhood can Work Together to make it a success for clients abneighbors. I want to thank Community Members who attended and those who emailed or visited my office with feedback and i want to thank Tipping Point for the 3 million grant, Salvation Army for welcoming hummingbird and for all they do to address homelessness and addiction. While this facility will more than double the current hummingbirds capacity, as i said, these beds barely scratch the surface of need. In my ideal universe everyone released from emergency rumor jail would have a hummingbirds and would avail themselves of that opportunity. We must work to open many more hummingbirds throughout the city. This is a good step and i hope you will join me in that effort by forwarding both resolution goes to the full board with positive recommendation. Thank you, supervisor. Today we center kelly from the department of Public Health and the director of real estate. Is mr. Pennick here . I will be representing the information for real estate and claudia is here for questions. Thank you. I am kelly. I am the special project manager for the department of Public Health here to give you a quick overview of proposed program and location at 1156 valencia. We have a clear need in the district during the january 2019 point in time count there were 317 Homeless People on that day. In district 8in district 9. Three know we need to support them locally. We want to create a safe place for them to rest afternoon consider options. The proposed project will operate a 24 7, 365 day a year program with 30 beds overnight for 25 days participants. For clients the experience would be low barrier, meaning we are always open. You dont need appointment. You can drop in or stay overnight. Bring partner,ment and belongings. You dont have to change between that and care. Inside are compassionate staff and access to services such as counseling, individual and group, laundry facilities, snacks and meals. Connections to Mental Healthcare, links to social services, help signing up to Social Security and ssi an and reuniting with families. We are planning to partner with baker places. Prc is providing Services Since 1964. The continuing care and wraparound legal and Health Services include the Behavioral Health navigation at 887. In patient detox center with 29 beds. They do many substance Mental Health treatment programs and transitional and permanent support of housing. Thethey are a qualified partnero do this expansion. The lease deal is the premise is the entire building. The term three years. Two one year options to extend. The rent is 33,667 monthly, 404,000 annually. Improvements Tipping Point provided 300,000 reimbursed by the city to Salvation Army. Working with them on the design model and right now the renovation is anticipated to be very minor to adding two showers and making sure that the bathrooms have ada upgrades. Thank you very much. Can you please tell me if annual operating cost of the humming bird place . Right now it is 3. 8 million. Thank you very much. Could we have a report on item two. Good morning. Budget analyst office. I will be repeating what she had to say. This is improving a 3 year lease we between city analvation army for finance sal wa 40 pee foot rent. There is discrepancy. It is below the required appraisal for the property considered within market rate. The rent increases 3 per year over the first three years for 1. 2 million over three year term. Improvements 300,000. There is a Tipping Point grant for cost of improvements. On page 6 of the report is the annual cost 3. 9 million per year. There is a 2 year option to extend this property is slated for Affordable Housing development. The city might have the option to extend. The way the lease is written now, it doesnt specify the increase in rent on the option. We are recommending amending the resolution to say the option can be exercised up to 3 increase per year in the option term consistent with the base term of the lease. Otherwise we recommend approval as amended. My members of the public to comment on items one or two . Seeing none, Public Comment is. Supervisor walton. Thank you, chair fewer. One quick question. I see Tipping Point is providing 300,000 grant for renovations for the Salvation Army to add more. The city is going to give that back in. Tipping point designated 300,000 to be used towards renovation costs. Because Salvation Army is doing orin novation in the building, the plan is to make that our contributing to cost to renovate. Thank you. I want to add the real estate accepted the amendments proposed by the bla. I would make a motion to accept amendments proposed. Also, i would like to move items one and two. Supervisor mandelman, please. I move we forward items one and two with positive recommendation. Thank you very much. We can take that. Madam clerk please call item 3. Resolution authorizing Police Department to accept expand grant 65,000 from state of California Department of parks and Recreation Division of boating to procure equipment and gear following board approval through november 30, 2020. We have mr. Young here from the San Francisco Police Department. Good morning. I am patrick. I am the chief Financial Officer for the San Francisco Police Department. The department is requesting the committees recommendation for our grant. This will help to replace two motors from the marine three vessel. It ha gone under a refurbishment paid with another grant. With this grant award and replacement of two motors, we will be extending the useful life of the vessel and will be minimizing the future maintenance costs because the two new motors will be under warranty. With this grant we will extend the useful life of the vessel and increasing its operational capacity. If anyone has any questions, i would be more than happy to answer them. There is no report on this. Colleagues, i think this is replacing the motors in an existing boat, and this unit actually comments what the jurisdiction of the coast guard is. We have our own jurisdiction within the city and county of San Francisco. This is why we have this marine unit that actually does that function for us around our coastal waters we have jurisdiction of and that the coast guard did not, that is correct . Thats correct. Okay. Open up for Public Comment. Any members of the public to comment . Seeing none, Public Comment is. No comments or questions. I move with a positive recommendation. We can take that without objection. Thank you, madam clerk. Thank you, sergeant. Can you please call item 4. 4 and 5 together. Authorizing the issuance and deliverrance of multifamily bond not to exceed 37. 1 Million Financing for acquisition and rehabilitation of 108 unit Family Rental project three structures located at south park street. 5. Resolution authorizing authorization of loan with mhdc south park property in an amount not to exceed 30. 5 million for 55 years for a portion of the loan amount and minimum term of 40 years or another portion of the loan based on requirements of the Funding Sources to finance acquisition of 108 unit affordable multiFamily Rental Housing Project for low income households consisting of three structures located at south park street. We have Caroline Mccormick here. Did you want b la to report . Normally we get a brief presentation from you and hear from the bla. It is recommending amendment, is that correct . Yes, they are. Good morning. I am Caroline Mccormick, project manager at the Mayors Office of housing and Community Development on the acquisition and preservation team. It is three Single Room Occupancy Hotels 22, 102, 106 south park street in selma within the same block. The total is comprised of 108 units. All except one will be affordable to household ifs 25 to 60 a. M. I. The buildings currently serve primarily formerly homeless adults. Per most typical restrictive declarations residents pay no more than 30 of income toward rent. The project will receive make or rehabilitation of all three buildings including seismic upgrades, upgrading Building Systems and other key life safety improvements. In particular, one of the buildings the Filipino Hotel about half of the buildings dont have proper access to light and air. That will involve the completed reconfiguration of the interior to provide access to light and air for all residents. No residents will be displaced. Temporary offsite relocation will be required to facilitate rehabilitate. Two requests. First approve issuance and delivery of Revenue Bonds and other action necessary to make the bond issuance possible. The proposed bond issuance will beacon do wit and will not require city funds to retainment of bonds. Second is to approve and authorize execution of a Loan Agreement with the sponsors lp entity not to exceed 30,000,000. 500000. Within that total request we have three different pieces. The first is request to approve the recasting and reconsolidation of existing debt on the project. We have been providing loans to the project since 1984. Mission housing owned two buildings since then. What we would be doing is bringing all of those loans into conformance with current standards. Low Interest Rate on that portion of the loan. We will be providing 3. 3 million in gap financing. The proposerred source is proposed source is housing trust. We are going to provide 13. 2 million in preservation and seismic safety loan products as opposed to a conventional First Mortgage this will be utilizing cd program. It is hard paying senior financing they will make Monthly Payments on that loan. These three will be into one Loan Agreement and in terms of the schedule the financing is anticipating to close next month. The construction will started right after. Regarding the bla recommendation, our position is we would like to keep the higher amount and the reason for that is due to the fact this project has existing debt on it, that existing debt is accruing interest every day. In the project timeline gets pushed out for some reason the bond closing gets delayed interest will continue to accrue. We our preference is to have the flexibility to not have to come back to you in the event the existing debt interest keeps accrues and goes above and beyond the 20. 8 million amount. I can answer questions about that. Lets hear from the bla first. Could we please hear the bla report on item 5 . The board of supervisors is being asked to approve an amended restated Loan Agreement between the Mayors Office of housing and Community Development and Mission Corporation for the three hotels in south park. The loan itself is twoparts. 11. 8 million in consolidating prior loans approved, 16. 5 million in new loans for rehabilitation. The loan amounts and the loan documents is 28. 3 million. There is a difference between the loan documents and the budget we were provided. We showed the budget on table four page 12 of our report. The actual budget is 24. 7 million. The major difference between the budget and loan documents is the budget provides for 9. 2 million in preservation seismic safety bonds to be used for this project. The loan documents provide for a liar amount of 13 higher amount of 13. 5. Our recommendation is to amends the legislation to reduce the amount in the legislation of 13. 5 million to the actual amount of the loan documents which are 28. 3 million. Basically we recommend to the legislation reflect the actual loan documents we were provided. In terms of the risk, there is the department is asking for 5. 1 million buffer in case there is project uncertainty. We are recommending a buffer of 3. 6 million between the budget and loan amount. We recommend approval of the resolution as amended. Open up for Public Comment. Any members of the public like to comment on item 4 or 5 . Seeing none, Public Comment is. I would like to make a motion to approve amendments as brought forth by the bla without objection. Thank you very much. I would move with positive recommendation as amended. Please call item 6. Resolution approving in accordance with section 147f of the Internal Revenue code of 1986 as amended execution of taxexempt loan by California Municipal Finance Authority pursuant to financing in an amount not to exceed 23 million. We have rachel here from the Controllers Office. Good morning. I am from the contro Controllers Office. I have anthony stubs here and clair to speak in more detail if you have questions. As reminder, tax equity allows exemption of interest on certain debt. In this case the proposed financing is through California Municipal Finance Authority. City and county of San Francisco is a member. Bonds or obligations refunds previous debt. The resolution before you today is because federal tax law requires the jurisdiction in which the project is located approve the financing after providing the opportunity for duly noticed public hearing before the obligations can be issued on taxexempt basis. This is the city and county of San Francisco not obligated for participation. Hearing notice was publish understand the San Francisco chronicle on february 24, 2020. Hearing was held on march 3, 2020. No comments were heard or received through the public hearing process. To give you background on the borrower. It is the school founded in 1967 based on the internationalism accredited by the french system of education to provide confidence by emphasizing intellectual curiosity to empower future generations to make meaningful contributions to the world. They have a total enrollment of 950 students from three campuses. 800 on the ash bury campus in San Francisco. That is what the project relates to. The proceeds of the loan will be loaned to the borrower for the following purposes. One, refinance all or portion of certain outstanding debt of the borrower. Financed and refinanced acquisition and furnishing of educational facilities at 755 ash bury street within the city. 1201 ortega street within the city. Each owned and managed by the borrower with other services in the city and to finance maintenance of the facilities not limited to seismic and infrastructure upgrades at both campuses and expansion of the campus to add classrooms and office space and extra space including reimbursement of incurred expenseses with the tax code. Also to pay some or all of the borrower cost in connection with one ormer of the prior obgydations and to obligation and to pay issuance. Collectively they are referred to as the San Francisco project. Assuming all of the approves are obtained they expect to issue tax ex attempt obligations of 23 million. City is not obgy gated obligated. The legislation will have no fiscal impact to the city and county of San Francisco. The projects are in district 4 and 5. It is sponsored by supervisor mar. If you have any questions for me or the staff they are here. Is this taxexempt because they are Nonprofit Organization . Yes school is nonprofit under section 501 c3 of the tax code. No bla report. I have a question. If i may ask a question or two. Thank you. I am the director of finance. So you have 950 students . Yes. This is a nonprofit private school, is that correct. Yes. What is the annual tuition . Average is 25,000. Is that for kinde kin radio . Preschool is below 25,000. High school is below 30,000. 30,000. Annually for high school . Yes. Ethnic breakdown of the school . Ethnic breakdown is hard to tell. More than 50 nonamerican citizens. Combination of european citizens and french and a lot of families with dual citizens american and french, spanish and english. 50 of your student body are from nonamerican families . Yes. What is the ethnic racial browning down of your student break down of your student body . I dont have those statistics here, unfortunately. What is your average income from a family . Do you have accommodate any students that are below the federal poverty line . We have a program of Financial Aid. We spend 1 million each year to finance scholarship for the students for families that cannot afford the school, and we have also some french families that can also the french government and additional subsidy to make the school. Today we are helping 25 of the students through the Financial Aid at the school. 25 of your students are on Financial Aid of some sort . Yes. That pot is about 1 million . Correct, yes. You cant give me a rational ethnic breakdown of the student body, is that correct . I dont be have the statistics. I can look in my file. It is very hard to gather this type of information because when we have the registration, most of the families dont want to answer to those questions. Supervisor walton. How many students . 950. It is 950 among three campu campuses is that correct . Thats correct, yes. This is the ash bury and ortega campuses this is for. Yes. This is not your preschool site, this is High School Site . This is from sixth to 12th grade. Ash bury is from prek to fifth grade. Is there a time constraint on this approval . I will defer to mr. Stubs with the finance authority. They are managing the actual transaction. They can speak to the impacts of delay. Yes, you know, due to Market Conditions, time is of the essence, basically, we are trying to get it closed in early april. Even if you are delayed by one week you feel as though that would actually hinder the issuance of this loan . Potentially, yeah. Every week that it is delayed has potential Market Conditions that can impact the project. Okay. I think that what i would like to see is some data about the students that you are serving in San Francisco. You have told us 50 of them are nonamerican families, is that correct . You said many of them are french nationals. You cannot give me a racial or ethnic breakdown of the students that you serve . I can provide. I will find out if i can find accurate information. How many students of your student body serves a special education population in San Francisco . I mean how many students are getting special Education Services in your schools . What do you mean by special education . Children that actually qualify for special Education Services . Okay. I dont have the statistics. We have a few of them. We dont provide the statistics. Please speak into the microphone. I dont have the statistics of that. We have a lot of kids that benefit from extra time and additional help. We have education specialists, three of them working on the campuses to help the kids that need more attention. I think i am speaking of children that actually qualify by the state of california for special Education Services. Not children that might just need a little bit more time. This is actually. No, no, it is something we track and also because, you know, our system is both american and french. Within the french system we also track the children that need extra time or special education. Those are followed and the children receive the support they need. Are your teachers credentialed in the state of california . The teacher is by the french education system. Not the state of california . Im not sure, to be honest. I need to check probably, yes. The school is accredited. The question was about the instructors. I need to follow. I knew they have a specific accreditation for the younger age. For the rest, i am not sure. I need to give you the information later. If you wouldnt mind, i think the things i would like you to send to three of us on this committee is the racial breakdown of students, actual amount of students that are on Financial Aid, racial ethnic breakdown, how many do you search of special education population . Because these are the factors, quite frankly, we would ask of any public school, not just private. I think that 23 million is a lot of money. I understand that it is not out of our pocket, but, quite frankly, if it is through any sort of assistance that comes from any taxpayers money, it is our responsibility here. I think that you it is in front of a committee with a strong commitment to public education. There is no bla report. We have also taken Public Comment on this. Are there members of the comment to comment on item 6 . Seeing none, Public Comment is. I am a little on the fence. I feel there is information i would like before i actually send this to the full committee, but colleagues what do you thi think . Supervisor walton. Move to continue to the next meeting. Supervisor. I am okay. I dont know that we know exactly what the financial implications are for them. I am not sure how often, if this board has ever said no to a resolution. It would be unusual. I have something to add. We have a local rate agreement with the bank. We have chosen the bank. It expires on the march 31st. For us it would be much better if we can finalize the transaction before march 31st. Otherwise we have to go again to the bank. Madam clerk, if this was to be continued to the next meeting, would they still meet the timeline . I think the board doesnt meet the last week in march, is that correct . This is heard at the next meeting the budget and finance Committee Meeting march 17th forwarded to the march 24th board of supervisors meeting. I think there would be time before the end of the month. I would make pay motion to continue this to the next budget Committee Meeting next week to get the proper information from you and all feel positive about a recommendation to the full board. I would like t like to option ma motion without objection. Thank you we look forward to hearing from you. Please read items 7, 8, 89. 7. Resolution approving harvey milk terminal one boarding area c food and beverage for a term of 10 years at 240,000 for the first year of the lease to commence following board approval. 8 the lease of 136,000. And 9. Elevate gourmet brand group for 10 years minimum guarantee of 250,000 for the first year following board approval. We have ms. Wagner from the San Francisco international airport. Good morning. San Francisco International airport. The airport is seeking your approval for two new food and beverage kiosk leases and grab and go market lease in if harvey milk terminal one and three with park cafe doing business as deloris park cafe as pronto market. These three leases are all the result of a request for proposal process. Both kiosk leases are Small Business set asides with proposalsers required bros revenue 7. 5 million per year for previous three years. All three lease opportunities had multiple proposal goes with park cafe, sidewalk juice and elevate gourmet with the highest ranked. 10 year terms with no options to extend. Would pay the greater of the proposed minimum guarantee rent or percentage of gross revenue. Minimum rent associated are delores park 250,000 per year. Sidewalk juice 136,000 per year, pronto market 250,000 per year. Over the 10 year terms of the lease the airport would receive a minimum rent payment based on the minimum annual guarantees of 6. 2 million. The budget analyst makes recommendation to approve. I would be happy to answer questions you might have. Thank you very much. Could we hear the report on items 7, 8 and 9. Three concession leases one in the harvey milk terminal and two in terminal three. These were selected through competitive process. We summarized the scores in table one on page 16 of the report. We summarize the lease terms in table two. These are 10 year leases. They pay the greater of the minimum represent or percentage rent. If they pay the minimum guarantee rent the revenue 6. 3 million to the airport. It is expected they will papers age rent at pay percentage rent and we recommend approval. I have this open up for Public Comment. Any members of the public to comment . Seeing none, Public Comment is. I want to ask you are there any requirements for local hire for the agencies . Yes, i confirmed with staff it applies to all airport leases with tenant improvement of 750,000 or above. That would not apply to the two Small Business set asides. Those two proposesers are both local businesses. I would assume they would pull from existing employee pool and did i mention that the first source hires is included in all leases. There would be coverage there as well. Maybe we should look at that ordinance. Then i discussed with you about the four person panel. You said three in the report it says four. I clarified that as well. There is one standing member who is part of our concession lease pan alepanels who is a planner d forecaster not included. That person is on all r. F. P. For food and beverage and concession leases. In this we had a retired airport employee who was the Deputy Director for administration. There was a representative from a consortium of airlines that do business at sfo and panel listing who does similar work for the oakland airport. Those are the four panel lists. In light of the contracting at the airport. I will make a note as we come back for these things we include that as part of the presentation. Than thank you very much. I would move these items 7, 8, 9 to the board with positive recommendation. Without objection. Thank you very much. Madam clerk any further Business Today . There is no further business. We are done. Hi. My name is carmen chiu, San Franciscos elected assessor. When i meet with seniors in the community, theyre thinking about the future. Some want to down size or move to a new neighborhood thats closer to family, but they also worry that making such a change will increase their property taxes. Thats why i want to share with you a property tax saving program called proposition 60. So how does this work . Prop 60 was passed in 1986 to allow seniors who are 55 years and older to keep their prop 13 value, even when they move into a new home. Under prop 13 law, property growth is limited to 2 growth a year. But when ownership changes the law requires that we reassess the value to new market value. Compared to your existing home, which was benefited from the which has benefited from the prop 13 growth limit on taxable value, the new limit on the replacement home would likely be higher. Thats where prop 60 comes in. Prop 60 recognizes that seniors on fixed income may not be able to afford higher taxes so it allows them to carryover their existing prop 13 value to their new home which means seniors can continue to pay their prop 13 tax values as if they had never moved. Remember, the prop 60 is a one time tax benefit, and the Property Value must be equal to or below around your replacement home. If you plan to purchase your new home before selling your existing home, please make sure that your new home is at the same price or cheaper than your existing home. This means that if your existing home is worth 1 million in market value, your new home must be 1 million or below. If youre looking to purchase and sell within a year, were you nur home must not be at a value that is worth more than 105 of your exist egging home. Which means if you sell your old home for 1 million, and you buy a home within one year, your new home should not be worth more than 1. 15 million. If you sell your existing home at 1 million and buy a replacement between year one and two, it should be no more than 1. 1 million. Know that your ability to participate in this Program Expires after two years. You will not be able to receive prop 60 tax benefits if you cannot make the purchase within two years. So benefit from this tax savings program, you have to apply. Just download the prop 60 form from our website and submit it to our office. For more, visit our website, sfassessor. Org, speaking are requested but not required to state their names. Completion of a speaker card will help ensure proper spelling of the speakers names in the written record of the of the meet. Place speaker cards to the right of the lectern. There is a speaker st. pete at the front table. S. F. Gov tv, please show the office of Small Business slide. It is our custom to begin and end each Small Business Commission Meeting with a reminder that the office of Small Business is the only place to start your Small Business in San Francisco and the best place to get answer about doing business in San Francisco. It should be your first stop when you have a question about what to do next. You can find us online or in person at city hall. All our services are free of charge. The Small Business commission is the official public forum to voice your opinions and concerns about policies that affect the Economic Vitality of Small Businesses in San Francisco. If you need assistance with Small Business matters, start here at the office of Small Business. Thank you. Please call item 1. Item 1, call to order and roll call. [roll call vote] commission dooly is absent. Commission huie is running late. [roll call] you have a quorum. Thank you. Next item, please. Item 2, general Public Comment. Allows member of the public to comment on matters that are within the Small Business commissions jurisdiction but not on todays calendar and to suggest new agenda items for the commissions future consideration. Discussion item. I presentedd to on your binders a Public Comment that was received before the start of the meeting. That would be applicable under general Public Comment. Great. Do we have to do anything to recognize that comment . Nope okay. So are there any members of the public who wish to speak on any matter that is not on todays agenda . Seeing none, comments closed. Okay. Please call item 3, 4 and 5 together. Okay. Item 3 board of supervisors file no. 200086, planning code zoning map, bayview industrial triangle cannabis restricted use district. Ordinance in amending the planning code by amending the zoning map to change the use classification of certain parcels in the bayview Industrial Redevelopment project area from m1 Light Industrial and nc3 moderate scale neighborhood commercial to pdr1g and to change the height and bulk classification of certain parcels in the project area from 40x to 65x, affirming the Planning Departments determination under the California Environmental quality act and making findings of consistency with the general plan, discussion and action item. Item 4, board of supervisors file no. 2000087, planning code, zoning map, bayview industrial triangle cannabis use restricted use district to create bayview industrial triangle reschool districted use district, discussion and action item. Item 5, board of supervisors file no. 200144 police code ceasing acceptance of new applications Cannabis Retail permits. Ordinance amending the code to provide that Cannabis Retail permit applications will not be accepted as of the Effective Date of this ordinance, and affirming the Planning Departments determination under the California Environmental quality act. Discussion and action item. I move these items be continued to the march 23 meeting at the request of the supervisors office. I move. Motion by commissioner adams to continue items 3, 4, and 5 to the march 24 meeting. Seconded by commission zouzounis. Roll call vote. [roll call vote] motion passes 50 with two absent and. Item 6, presentation, San Francisco metropolitan Transit Agency fiscal year 2021 and 2022 Budget Discussion item. The presenter is director Jeffrey Tumlin of the s fm ta. Welcome, director. Thank you. Good evening, my name is Jeffrey Tumlin, im the director of transportation for the s fm ta and we are here to present findings on our budget that will go into effect of july 1 this year. I have been at s. F. M. T. A. For just over two months and im wading deep into the data. A lot of the data are not very impressive. If you look at the highlevel indicators of success, everything is going rather poorly. Congestion is increasing significantly. Greenhouse gas emissions from the transportation sector now account for about 50 of San Franciscos total Greenhouse Gas emissions. Fatalities and injuries going up again rather significantly, whereas mode for walking and biking and transit is declining. For many of the things we care most about, things are getting worse, and we understand the causes. One of the core causes for many of our transportation problems is our Regional Housing policies. San francisco and san mateo counties have addedded about 2,000 jobs every month since 2011 while add only 400 housing units. While we in the transportation world have to clean up the mess of failed housing policies where we force people to commute longer distances as opposed to allowing them to live near their work. At the same time we are also creating problems for the medical profession as a result of these transportation failures, adding to injuries and fatalities. We know that as people have shifted towards driving, not only have driving speeds declined, but the ability of our Transportation System to move people is also in decline at the same time we are being asked to deliver more people, that all of this Economic Activity requires greater efficiency out of our Transportation System and our system efficiency is declining. That said, when you look beyond the macrolevel data and look at the work that the s. F. M. T. A. Is actually doing, all of our projects, the things that we are actually investing in are having extraordinarily positive results. Our muni investments in the Muni Forward Program where we are making 100 small improvements to improve bus speed and reliability are significantly increasing travel time, reliability and more importantly ridership. Ridership is up as much as 60 on lines like the five and five rapid. Similarly where we are envicinitying in protected bikeways or other safety improvements, we are seeing huge improvements in bike ridership and very positive results in terms of safety. One of the things we discovered last week is one of the changes we made to the quick build component of Market Street is Market Street has the highest peak period bike and scooter ridership of any corridor in north america. We understand that when we apply these solutions, when we focus on the movement of people rather than the movement of vehicles, and when we prioritize the most spaceefficient modes of transportation, that our streets can move more people, that we can accommodate economic expansion while also improving quality of life. Similarly when we prioritize those investments for the people who need them the most, the people with the fewest choices, we can reduce Household Expenditure and transportation, and we can expand job accessibility, training accessibility and other opportunities for the people with the fewest choices. We understand where the solutions lie. We have demonstrated success in implementing the solutions and unfortunately the thing we need most in order to continue this path is additional resources. And thats really a big part of our challenge. We also have challenges around people trying to understand really the nature of the problem. Here in San Francisco, theres generally broad agreement on progressive goals. When it comes down to doing actual implementation, every bus stop is sacred, every parking space is sacred. As san franciscans, we love our community, and we are deeply resistant to any sign of change on our block. And so change is hard in a city like San Francisco. We also have the same problems that many of your members are experiencing as Small Business owners, the challenges of trying to attract and retain staff as housing becomes far more expensive than its ever been. We as an agency have about 1,000 vacancies in the s fm ta which negatively impacts our ability to deliver basic services to the public. We also operate in a very complicated world where people, because they use the Transportation System every day, think they understand how it works. People believe that adding another lane to a highway actually helps with congestion whereas the data is clear that adding highway lanes worsens congestion. Similarly, people have a hard time understanding the complexity of the Transit System and think what seem to be obvious solutions, in fact dont really work in practice. We also have a lot of common customer frustrations. Everyone who experiences the Transportation System every day has concerns about personal safety and security. Our buses, are very, very crowded. And while we are getting significant improvement in the reliability and quality of service in our bus system, for those of you who take the subway every day, weve got some significant reliability problems as a result of deferred maintenance and aging infrastructure. All of which were trying to solve for. And for many people, while they want to be able to walk or bike or take transit, the fact is weve designed the city, and people have designed their lives such that the only reasonable choice is driving. For those people, the best way to make it possible for them to continue to drive when they need to drive is to make it more practical and more delightful for people like me to do something other than drive. So we know what we need to fix. We have a reasonably good financial basis where were starting off from. But we also have a 66 million structural deficit, because thats how municipal governments are structured in california. Our costs rise with the cost of delivering service. Our expenses are driven entirely by staff, and its critical for us to provide a basic living wage for staff. We dont pay our staff lavishly. But we pay them enough in order to be able to attract people to the job and keep them committed. But the fact is the cost of living in the bay area is rising far faster than our wages are. In the meantime, our revenues are rising with inflation. So here we are, perhaps at the end of a peak boom cycle. And the gap between revenues and expenditures widens, leaving us with a structural deficit. Im going to turn the presentation over to our chief Financial Officer,ley yo levee le o levinson who will talk about supporting the Small Business economy that is so essential for us to be able to get the revenue we need in order to run the system and make sure that the people of San Francisco dont have to get in their cars and drive so far because the needs of daily life are available within their neighborhood. Leo, please. Thank you, director. Its really been a delight since jeffrey came that we have a director who is not only understands the Transportation System but also the financial challenges of operating within the constraints that we have. And so we have a big challenge here like every City Department in these circumstances as jeffrey said. When we are putting together our next twoyear budget, we are trying to look both at Financial Sustainability for the longterm and resilience in the face of potential downturns and hits in the economy and looking at what service is being demanded from us and are there ways that we can close that gap and go to the public and make a case that its worth it to fund this Transportation System to provide the kind of service that they should expect. As director mentioned, we have a structural deficit, we estimated at 56 million as we were starting to put our budget together this year. Thats the difference between the ongoing revenues that we have and the cost of providing the service we are providing now and looking forward, that was growing over 100 million as we looked forward. These are figures that we provided at our budget workshop with our own board, the mta board, in february. Weve been working on these numbers since then. And we are going to be actually required to close that budget gap on march 17. We are going to our board with a balanced budget proposal, not only to see how we deal with that gap but also the demands for improved service that weve been given. Director mentioned the revenues. This is a quick snapshot that the top line here, we are very fortunate as a Transit Agency, transportation agency, that we are both, we have combined running a Transit System and the parking system for San Francisco. We were formed by the merger of the department of parking and traffic and the old muni. And we have a tremendous public support in San Francisco that provides us with a portion of the general fund in order to make a really highquality Transportation System work. And the general fund has been our savior during these past years of the boom while our other revenues have been flat or declining. Thats the main story of this particular slide is the top revenue is the combination of our parking and traffic fees, our parking meters, parking citations, the garage tax, parking tax, all of those have been flat to declining in recent years. This is something youll see nationwide with parking is a trend that you can see. The second line, the blue line thats going up, thats our general fund transfer. And thats where weve been getting a share of the amazing economy that San Francisco has enjoyed. This projection was made from the Controllers Office prior to this coronavirus. And what we are seeing. So of course we are going to be working very closely with the we city in updating these projections as we look at the economic impact. The next line down, the darker blue line, thats our passenger fares. And the decline there is a couple of different things. One is somewhat of an overall system decline in ridership or paid ridership. But we also during this time period, we did introduce a number of equity products to lower the cost of transit for our most vulnerable populations so during this time period we instituted a lifeline fare at half the monthly fare for lowincome individuals and free for lowincome youth during this time. So that is part of the revenue decline. And so more recently, its been sort of flat, not as severe a decline, but thats something that we are actually doing a little better than transit agencies around the country, which have seen a more severe decline as the other options have come up with the Transportation Network companies. And then the final one is the state operating grants where just recently, again, this helped us, there was a bump up in the last years, so the passage of the statewide sb1 that supported transit, but we dont expect the state funding to be continuing to go up in that regard. We also have tremendous Capital Needs in the agency. We estimate we have about 14 billion wort of assets to look not just at our Transit System, our subway stations, also the parking meters, the Traffic Signals and our own facilities. And the Capital Funds that we expect to receive are also declining. We received quite a lot of federal support for the central subway extension that were very excited about, and we are going to be continuing to work on. And that, however in the next period we dont expect that kind of influx of federal funds. So we are aggressively looking for whatever Funding Sources we can get. We dont expect the same level of funds coming in in the next period that we enjoyed during the last fiveyear period. We also do an analysis like the city does of potential for an economic recession and what the impact would be on the s. F. M. T. A. s revenues in particular. We looked at the last major downturn in 2008. And that was a fouryear period to recover. And based on that, the equivalent would be about 160 million worth of lost revenues to make up for plus extra expenditures to keep the Pension System whole. So we are looking overall at 200 million scenario recession. So we are trying to keep that in mind of trying to find adequate reserves without a worse shock to the system. This is probably more detail than you want to see but this is what we presented our board in terms of the requests that were coming in for improved service. So in addition to the 66 million shortfall that we had to start with in our bumming process, we had in our budgeting process, we had a working group, a wonderful working group with the board of supervisors and our own board to brought in experts from around the country in transit to talk about what was needed to improve our service to the level that the public would expect. They have a lot of good recommendations, and basically we needed to fill the staffing holes that were described, improve some of our, we are working on improving our train control systems in order to make the subway more efficient and then basically we need more operators and more service to meet the growing needs of San Francisco. The estimate just for the next two years was about another 70 million, another 90 million after that. So we were scouring for what were our options in the budget in terms of increased revenue. And this one i want to mention, when were looking, from our agency we really are missiondriven lens that we look. And so we arent looking jus for how to raise revenues but how to improve the Transportation System in a way that may also increase revenues. And so one of the items thats been sensitive in the past was the issue of increased hours on our parking meters. With the idea that its targeted at areas where businesses actually were asking for more turnover, where the parking is congested because the hours of the businesses continue into the evening, and when our meters end at 6 00 p. M. , customers cant come. Similarly in neighborhoods on sundays where theres congestion for parking. And so we put forward a proposal for a range of options looking at targeted corridors, and thats something that our board is considering now in our budget. We can only expect the revenue to be at the high end. This was a range that was done by our team from three to 28. But our commitment is to do it in a way with a lot of businesses as well as the Faith Community and to phase it in in a targeted and smart way so we expect the revenue to be lower than the higher end for that. We also looked at fares. There was we have an indexing policy to try to keep fares in line with the rising cost of living. So theres a default that fares would rise with a combination of the cost of liveing and our labor cost increases. Our board also has the ability to revisit that and adjust it every time we go forward with a new budget. So just based on that indexing policy our topline cash fare which is currently at 3 would rise to 3. 25. Theres a current leafiest Cent Discount if you pay by muni mobile on your single ride fare. And then we have passes, full fare passes around 81. It would rise to 85 under the indexing. So there were various options we wanted to put forward before our board. Theres been a lot of public demand or really activism around the area of reducing fares and telling us about the impact that muni fares have on many of our customers. And so we did provide options of just pausing the cash fare at 3, reducing, trying to raise more revenue perhaps to pay for other equity options by reducing the discount for using clipper or muni mobile. Theres been a lot of talk about expanding free fare programs to all children rather than lowincome. And there is something else. Currently theres a lowincome monthly pass. Weve heard that many people cant come up with the 40 thats half the price of the full pass. And so options for people to pay the single ride with a discount discounted fare. Im not sure how much you want to go into this with this body but this is what we presented our board. We have been building up funds to be able this is our fund balance history. We have a policy of a 10 of our operating Budget Reserve for economic downturns. And thats the gray line. That would be 120 million rising to 130 million in the next budget. For a couple reasons weve been building up cash in our funds. Its partly because of the tremendous economic Success Story of the city of San Francisco in terms of the general Fund Revenues and usually its been budgeted conservatively in the beginning of the year, and the end of the year they deliver a further amount thats added to our fund balance because of the economic growth, and secondarily the vacancies we have. And thats not something were proud of, that because we havent been filling our vacancies, thats where the savings comes from. We need to use this fund balance strategically. So we had a policy, a potential ways of using it that we talked to our board that would include setting aside significant amounts for the contingencies that we see in front of us both on our Capital Projects and operating projects and then we do have something maybe of interest we have to replace our parking meters throughout the city because they operate on 2g Cellular Technologies for taking credit cards, and many of you know probably, 2g, we have been warned that it may stop being support and we have been warned that by the end of 2022, so we have to replace our parking meters. We are looking at our policies as to how many would be single meters which have different advantages in different places. So that is something that we expect to do in the next very short time period. So the basic method here, the bottom line is we cant Fund Everything that we ask for. We started out with 66 million and there was a further 70 million and 90 million in requests to provide the services we would like to provide. With all our tweaking of the budget, theres some small things with fares and parking, theres areas where we have flexible funds that can be moved that are more sustainable that we can use, that can help close our basic service gap, but they dont provide the funds to fund the recommendations that we had. And this is not really a surprise. There have been Different Task forces in San Francisco looking at the future of transportation. And identifying the need for additional funds to make this really the Transportation System that we want. And so there was a task force, that was a toxic force looking forward to 2045. A tax force looking forward to 2045. Those are potential funding mechanisms. We are going to be working very hard during the next period to see what may be feasible, what the appetite is, the demand from the public, what makes the most sense, if people are willing to say yes. We want to earn their trust to say we know how to spend it that will make the difference in the lives of businesses and residents and tourists. Some of the options, i actually already did have the proposition d, which will provide a modest amount of funding from the Transportation Network companies, uber and lyft. We estimate that will see maybe coming in lower than the estimate from the time it was passed but we were hoping around 15 million toward our operating budget and a further amount for safety projects. There was an attempt to pass a sales tax that got more than twothirds of the vote but it had two pieces to it, and it was confusing, and the second piece didnt. So that would have provided 100 million and it didnt pass. Well be continuing to look at sales tax measures and thats been happening regionally. Theres a number of sales tax measures being proposed. And there have been other proposals that well be looking at, of course congestion pricing is something that has been talked about as being studied and, again, has a Transportation System benefit as well as a revenue benefit if we want to find any way to reduce congestion in the city. A Community Benefit district is something else, understudy which would provide for the maintenance of our tracks and overheadlines and Traffic Signals to keep them in good repair. And then we are scheduled to come before the voters with another general Obligation Bond which is very necessary for our facility upgrades so we have a very necessary and exciting facility program. But we are one of the oldest transit programs in the country. We have bus yards over 100 years old. They are not capable of housing the fleet that we need and the type of electric buses and infrastructure. So we are looking at very exciting possibilities of rebuilding the facilities and perhaps with development on them. So you may have heard about or potrero yard which is being looked at to have over 500 units of housing. We are planning for the presidio yard. Theres interesting ideas of what could be done with that space that could accommodate the bus yard and other development. That will be exciting in the future. We are looking for big ideas that are aligned with transportation goals that can make our budget both sustainable and resilient. And so we have a lot of outreach. This is part of our outreach plan. And many, many different types. Unfortunately our next open house thats scheduled there is being converted to a virtual open house in line with other efforts in the city for safety. That we hope to well have the first chance for our board to adopt our budget on april 7. We will have a second chanson april 21. Chance on april 21. And thats our presentation. Do we have any commissioner questions . I just want to say that was a great presentation. And one of the things i realize is you have probably the most challenging Transportation Network in the country, because you got buses. You have the f line, you have cable cars, you have the subways. I mean theres all these different transportations that you dont see in a lot of other cities. I want to comment, you know, i was skeptical about the Market Street closure, and i do use the upline from the castro to downtown. And i will tell you that train moves faster once you past van ness now. And its only a 20minute ride which used to be a 40minute ride. So that was a good move so thank you. Any other commissioner questions . Commissioner. My question was so all those big ideas around fare changes, where are you with them in terms of what levels you want to pull . So we are looking at several different options around fare changes. As mr. Levinson stated, fares are an important part of our revenue. And our fares are scheduled to go up each year in alignment with our expenses in order to avoid doing a major increase every couple of years. We are trying to do is to think through how do we get to the bottom line of what we need in order to run the service while adjusting all of our different fare categories in order to maximize the equity of the outcomes. So were looking at the data of exactly who uses which fare categories and trying to minimize increases for people with the least amount of means and to make adjustments where people can most afford it and direct that revenue towards our equity surface. So we are going to be presenting our board next week with a variety of different options in order to help them help us think through those tradeoffs. We are also working with communitybased organizations to get their input on what are the mechanisms that will have the least negative impact on the most vulnerable riders. One more question. Im hearing both that its a, you know, you kind of reached capacity in a lot of ways. Theres a lot of people in the city using transportation. And at the same time tncs have taken a lot of people who would have taken Public Transportation and congesting the streets. Can you tell me about kind of, is it that theres too many people using the public the infrastructure we have or is it the infrastructure or kind of wheres the play between tnc regulation and our public Transportation System . So a bunch of questions embedded there. So in San Francisco, we dont have the authority to regulate uber or lyft. We are currently engaged with the California Public Utilities Commission which does have that authority to see are there some carveouts that we can have in San Francisco in order to be able to welcome private providers that provide a tremendous amount of convenience for the people who can afford them but to allow that to the extent that it upholds the public good, that whereby we have the tools to manage the public right of way for the greatest public good. So that is some work that were doing. At the same time, were also working in order to minimize the congestion impact on the highest capacity most efficient modes of transportation, which are basically the highest ridership muni lines. So as you can see, we have done a tremendous amount of work recently on Market Street thats paying huge dividends in terms of improved speed and reliability. As we shorten the muni trip, we can also reinvest the travel time savings in improved frequency of service, which also results then in improved capacity of service. So we are doing the same thing on third and fourth streets. We are looking very carefully at additional improvements to the five, we are looking at changes to tar very well street, and we are about to roll out significant improvement on van ness next year, and we are Getting Started on geary right now. We are looking at the books and budget, assumes we have the money to do so. And again, that is providing dedicated lane from highfrequency routes that experience significant congestion, looking very carefully at signal timing to that a bus or train doesnt have to stop with 150 people on board in order to let three people in the back of an uber turn left in front of it. Its also looking at optimizing the placement of our bus and train stops in order to maximize ridership while being sensitive to vulnerable populations for whom walking an extra block is more difficult. So its partly big moves but where we get the real benefit is from the thousand small moves that weve demonstrated in the data on the entire Muni Forward Program. Thank you, director. Commission zouzounis thank you for your present. I learned a lot. I have a question about the vacancies. Are those in the rankandfile like the mechanics and drivers or are those largely management . Its throughout the agency. Weve prioritized in terms of staffing up, weve prioritized first and foremost staffing up our Human Resources department. The Human Resources department that i inherited was suffering. So we have a new director who is fantastic and were working to make sure that she is adequately staffed in order to be able to staff up the servicecritical departments. I have withheld hiring in my own team in order to prioritize our missioncritical workforce, particularly bus and train operators, mechanics and machinists, the people who really deliver the service to the public. Okay. I was just curious, because i remember the line being long for some of the traderelated positions. Im curious if that was because of this. We are also concerned about succession planning in the skilled trades. When i go onto our shop floors, home to some of the most skilled people ive ever worked with, im sometimes the youngest person in the room. And we want to make sure that we are passing on that knowledge of this unique system to the next generations of skilled mechanics and machinists, which i would point out for those of you who are interested in new career lines, is a career that will last. Even as technology changes, the need for skilled mechanics and machinists only increases, and theres skarsty in the marketplace increase scarcity in the marketplace increasing as well. All the auto body shops, those are all going out of business soon because of properties being sold. And so im thinking all the time theres so much Skilled Labor here, and i hope that its going to be transitioned somewhere else in the city. Send them to the s. F. M. T. A. We provide very good benefits. Commissioner ortiz thank you for your presentation. I dont know you yet. But seems like you know what it is on the ground level as a commuter. I get the good vibes. So i look forward to working more with you in the future. I do have two questions. I know you are doing something with the pdc, the burden that tncs have on our infrastructure. Behind those specific carveouts, how do you see to mitigate the tremendous burden they have on our infrastructure . Dont have to get into detail. Ultimately what we really want is the tools to be able to manage the public right of way for the public good. So right now i charge 2. 50 for somebody to get a one and a half square feet of space on a 38 geary bus. But if youre driving alone in a car, riding the back of an uber, well now i get a tiny percentage of your uber fare, but the basically if you take up 350 square feet of space, the public gets nothing from that. Those financial incentives are reversed. The scarce resource that i have is a limited amount of street space. And we are no longer demolishing neighborhoods to widen roads. I need to manage my limited street width in order to serve the most people and the highest public good. Im in a rational system, we would think about managing the street system like you manage your businesses where you pay rent and you charge more for the more expensive goods and less for the cheaper goods. Frankly, i think i should be charging 10 for somebody riding the back of an uber, and you should be paid 2. 50 to take a 38 geary. We dont currently have the Regulatory Authority to manage our streets for the public good. And then my second question, regarding Small Businesses from an equity lens component like 24th street, visitacion valley, how do we fit in in that plan in your budget and the vision Going Forward and your mission so frankly, i think one of the most important transportation performance metrics should be Retail Sales Per square foot particularly in our neighborhood commercial districts. And theres a couple reasons for that. One is in our neighborhood commercial districts, most of them are overwhelmingly in local ownership. So even if that individual business isnt making as much money as a chain store some place else, all those profits are reinvested back into the Community Many times. And most of you are the most phenomenal entrepreneurial skilled Training Programs that exist. No one teaches people really how to run a business more than Small Business owners do, and particularly familyrun Small Businesses. Its also important to me that from a Transportation System perspective, thats the needs of daily life be available in every neighborhood within walking distance of all san franciscans. Because otherwise its a burden to the Transportation System if im asking people to either get in their car to drive somewhere or order it online from amazon. Both of those create big problems for the Transportation System. So it is very much in my interest as the transportation director to support Small Business success, particularly in our neighborhood commercial corridors. I mean, all neighborhood commercial corridors in San Francisco are there because of the tight relationship between Small Businesses and transit. All of our commercial districts are on former streetcarlines. Every single one of them. We grew together. And if we want the city to be economically sustainable and socially equitable at the same time, we need to continue that relationship and strengthen it. Thank you. Director, thank you very much for coming. Its enlightening and heartening, frankly, to have your perspective running m. T. A. We are very grateful to have you. I wanted to, you know, i was looking at your Capital Funds expenditure. I know weve been moving more towards protected bike lanes. Thats definitely a direction we want to move towards. How do you do you see that as competitive from a revenue standpoint, because its a cost expenditure to generate these or do you see it as helpful because it removes cars and i guess where does that fall on the spectrum for you . And ill give you a hint of where im headed with this is we hear a lot from Small Business owners and theres a lot of consternation and parking and bikes as you are all too familiar. Yep. And i think one of the things that im particularly interested in is helping people sort of find their ku m b y ya with this in understanding how these pieces go together and i think you can speak to that really well. We are interested in increasing the use of bikes and scooters and other forms of micromobility for people of all ages and abilities, in part because that mode of transportation offers a unique combination of user convenience and system efficiency for certain types of trips. So about more than half of our trips are basically three miles or less. Particularly for us san franciscans. We make a lot of really short trips. And san franciscans who drive make a lot of really, really, really short driving trips. So in reasonable doubter to allow our streets in order to allow our streets to move more people and expand the economy, particularly the local economy, if done right, increasing use of biking and scooterring can be super useful. That said, we recognize theres a tension between how we use space, so theres a tension between allocating dedicated space for people on bikes and scooters and dedicated protected space, which is necessary to actually attract people to those modes in any significant number, versus providing that space either for traffic lanes or for parking. And parking is particularly important for Small Businesses. We know that most Small Businesses in San Francisco operate at a less than 10 margin. That is if [off mic] if our transportation [off mic] all right. I think the test was successful. [laughter] if our Transportation System changes, cut your business by 10 or more, not only does that mean you are going to be out of business but you are going to have lost your familys investment of capital for a long period of time. I mean, you really dont want to do that. So what were interested in is how can we deliver more people to your business. Cars dont shop. People shop. So how do we use that space to deliver more customers to your business. That means collecting data in a different way than perhaps we have in the past. It means looking very carefully at the sales tax return data. And we think likely. [off mic] thats the buildings Fire Management system testing to make sure everything works. Im glad its working. I feel safer. So it means not only collecting the sales tax data to make sure things are tracking but also likely purchasing credit card data so we can know in a quicker time horizon, whether our projects are having a positive net positive or net negative effect on Small Businesses and Building Trust in the community. For the most part what well be seeing is in most cases, the work that were doing creates some benefits but in some cases it hasnt. Thats another reason why a lot of the work that were moving forward with is through what we call quick build, where we are not investing in concrete, we are investing in paint and little plastic posts and other stuff that can be quickly undone if the unique considerations of that commercial district or that particular project is not turning out as well as wed expected, we can easily reverse those or make adjustments as we go along. Do you have a sense so first of all, thats actually kind of exactly where i was headed, which is theres data that shows whether this is helping or not helping and how quickly can we get to that data so local Business Owners can be assured that even if we put the wrong foot forward, we can quickly take it back and correct and do whats right for the community. So exploring that just a bit more is the do we have a sense overall how protected bike lanes are affecting local businesses . If you had to sort of generally say its a net positive for local businesses or net negative, would you have a conclusion there . So i think it varies. So the protected bikeways tend to be a net positive to the extent that theyre tied to the rest of the network and creating a significant increase in bike ridership. What we find with people on bikes and scooters is its super easy for them to see into a storefront and make spontaneous trips because they dont have to worry about parking assuming they tether their bike or scooter so something stationary. So that type of user tends to shop a lot more frequently and a lot more locally. Where we are doing investments that arent connected to the network, we see the response is less. Which is why most of our investments in the protected Bikeway Network have been incremental and kind of starting around Market Street in the downtown and slowly spreading out. Some of the investments that were making now are trying to piece separate pieces of the netWork Together in order to actually create that Network Effect that tends to result in a big unleashing of new people out on bikes and scooters. That makes perfect sense. Quick little observation. The meter upgrade, the 2g in hindsight maybe wasnt futureproofed enough. Are you as you explore the next phase of whatever you choose, lets assume its 5g and now five years from now we are looking at 10g and like wow, we are going to discontinue 5g, have you thought about how you might get more life span out of it the next time around . Yes. The next thing we want to do is move increasingly to mobile payment. We really like mobile payment in part because its easy but also because on mobile payment, it allows motorists to extend time on their meter to they dont have to guess how long theyre going to stay and to be criminalized if they have a better experience at your store or restaurant than they were intending. We want people to stay longer and spend more money, and if you pay by mobile, the app will actually because you and ask you if you want more time. So an idea i had, and somebodys probably mentioned this or thought of this before, but whats the harm in throwing it out . Im imagining a business might want to pick up the tab. Sure. For a customer or sort of pay, we got our meter while you are having your meal. Are you guys think about that at all in terms of does park mobile allow for that . I dont know in other cities, that is part of the program with mobile parking payment apps. We can look into what it would take to have our provider offer that service of picking up the tab basically, validating parking automatically. Yeah. And then a quick budget question. So you have i think it was like 170 in the reserve fund . Is that right . I dont have it in front of me. We are looking to build a 225 million to 135 million. How does that plug into the deficit . Do you ever use that fund to address the deficit or just the reserve comes in over the top and addresses the deficit and you hang on to the reserve . Yes, the total we have currently is about 175 million more than the reserve. The reserve we want to keep for a definite to fund approximately we hope it might be half of a recession scenario, and wed still have to solve the other half. For the remainder of the fund balance, really with directors strong leadership in this area, to the degree if we use we probably will need to use some of that fund balance. And we historically have used some fund balance to budget our funds at the beginning of the year. It usually comes back to us by the end which we cant expect this time. But to the degree we use fund balance for our operating costs, we are being very transparent that it could be a bridge, if we dont get another Funding Source to carry on after that period, it will require a significant cutbacks after that point. So we want to strategically use it as a bridge to a more sustainable budget in the future. And we will still tie our fund balance to part of our budget that could be flexed up or down if it were necessary, so we dont want to exceed the amount. So in other words not to use it for our labor operating costs and use it more towards necessary that if necessary we can slow down or postpone in the future. We are obviously sailing into the quite the black swan event here. How far are we into sort of evaluating what all this looks like . I know its nobody has any real idea, but nonetheless, we have to plan for all the scenarios. Yeah, we are really just ramping up now and want to sort of up our level of sort of realtime monitoring as to whats going on in our system. So we are going to be monitoring our ridership and revenues on as realtime a basis as possible, looking at the trends, both recent trends and comparing it seasonally to the past year in order to be able to really report out on the significance of the impact. And then looking forward. And well be very tightly monitoring our budget as we go through our budget period, and well make course adjustments as we have to. Im sure youll whatever temporary measures have to be taken to make it more appealing to riders, users. Its looking like spacing is going to be an issue. And i read in the paper there was a significant drop in the bart usage. I think it was like 170,000 or Something Like that. So it was we are behind you, and whatever we can do to help, let us know. Thank you very much for taking the time to present. Thank you. Public comment sorry. Do we have any Public Comment . One day we will. [laughter] [off mic] seeing no Public Comment, Public Comment closed. Item 6 does not require an action. Thank you, s. F. M. T. A. For presenting. We appreciated you guys coming very much. Thank you next item, please. Commissioners, before you is item 7, adams confirm they did watch the february meeting . Yes thank you very much. Item 7, presentation, summary discussion regarding the february 26, 2020 meeting on Third Party Delivery platforms and virtual and ghost kitchens. Discussion item. The presenter is dominy can a donovan, senior policy analyst, office of Small Business and someone here also to provide you with some support. Thank you. Sf gov tv, i will have a powerpoint ready for you in less than a minute. How high do we think hes going to count to before hes done . [laughter] i think we are at 12 now. 13. One, two. [laughter] [fire system testing] thank you. Okay. Great. Thank you for having me. Donovan with the office of Small Business. This powerpoint is arguably less pretty than the s. F. M. T. A. , but bear with me. So todays presentation for you is a summary of our own discussion from february 26 where you all discussed virtual kitchen and Third Party Delivery platforms. What i tried to do was draw conclusions based on that discussion and summarize that in a memo that you have in your binders, and thats also posted publicly. The idea is that you can affirm that these conclusions are indeed yours and you would like them to be presented at the march 12 meeting that supervisor safai called on the same matter. Effectively, there were two conclusions drawn at that meet. One being that virtual and ghost kitchens and brick and mortar kitchens should be regulated equitybly in order to preserve the vitality of our neighborhood commercial corridors. And second, that protections for brick and mortar businesses and how new technology such as delivery apps interact with them, should also be exploreed. Your discussion was framed under five main issue areas which included Health Health and safed use, fair competition, Economic Analysis as well as infrastructure. The additional comment that you had were that virtual ghost kitchens as well as Third Party Delivery apps provide brick and mortar businesses with a unique opportunity to grow their brands and to operate in a more economical manner and that you also recognize that the Third Party Delivery platforms can play an essential function in connecting restaurants to their customers. [please stand by]. And that they should be commensurate with brick and mortar restaurants. There is not clear guidance at the moment for how consumers can be made of those same time Health Rating of from virtual kitchens from which they are ordering. Customers ordering from thirdplatforms do not have a good understanding of where their food is coming from or whether its been reheated. Additionally, when a product is collected by a delivery courier, theres no requirements that the food be maintained in a safe and healthy manner before it reaches the customer . Any questions on this topic . Great. In terms of land use policy, we drove to two conclusions, one being we thought that formula retail controls and how they interact with catering uses should be explored by the city, particularly where virtual kitchens appear to be able to open under being principally permitted where restaurants are allowed to be opened. For background, as s. F. Planning presented, they consider virtual and gross kitchens to be catering uses. However, we know that those that some virtual and gross kitchens have previously sought permitted under mobile restaurants and food facilities, and the department is currently reviewing those definitions. Caterers are usually permitted in Industrial Areas of the restaurant. Limited restaurants are usually permitted in neighborhood commercial corridors. Virtual and gross kitchens are considered to not Exchange Money for services on the property. If a fastfood change wanted to open up their own kitchen, they would be principally permit today do so as a catering use. Dominica go ahead. For this particular section, i feel like there was there was some stronger feelings and less stronger feelings about whether or not formula retail should be allowed in catering uses. I think i was in the strong feeling that it shouldnt be. Okay. I guess my question is on process of this. Are we going to go through each section and agree this is what was said, and if we go through as a body, then we question . Yes. Okay. Then ill hold my questions. Okay. As more businesses open, congestion may thusly increase due to an increase in use of those delivery apps. Effectively, youre determining what. [inaudible] whos a virtual kitchen versus whos a brick and mortar, and effectively, they recommended the city come up with a way to make a better determination of whos who and study it for the impacts. So effectively, your conclusion was that the city should formally support the food fair delivery act, which is at the state level, but also should explore local regulations that could ensure brick and mortar businesses have adequate protections in the thirdparty delivery space. What was not fully discussed at the meeting on february 25 was legislation thats been proposed in various states and localities, including the fair food delivery act, which to be perfectly honest, ive not done a thorough analysis of. Im hoping my counterpart can speak somewhat to it, but it was introduced recently, so give us a little space to better understand it. The state of rhode island has proposed legislation regarding disclosures and regulation. The state of new york has proposed legislation regarding Health Inspection grades. The city of new york has proposed the most robust package of legislative proposals relative to this space, six pieces of legislation in particular, which are outlined on this slide. Again, i havent had the time or band width to fully understand each piece of legislation, but we have an idea of what they are generally proposing . You have that, i believe, in your binders, and if not, i will email this out to you. And with that, i am happy to take questions at this time. Commissioners, do we have any questions . Okay. Well, it was a super interesting hearing. Ben, did you want to speak at all to has there been any Development Since the hearing in terms of how the Planning Department is looking at this . Sure. Good morning, commissioners. Ben van houten from the office of economic and workforce development. I agree this created a lot of interdepartmental dialogue. I wont speak for the folks at planning or d. P. H. Other than to say weve had good follow up conversations with them, and i think we all have a more keen eye on this emerging set of models. Based on that hearing and the discussion tonight and the memo and the recommendations you provide, i think thatll be really helpful in terms of approaching thursdays hearing, which, again this is all the beginning of this conversation if it ultimately all goes up into legislation, im sure thisll all be back before you in this conversation, and itll continue on. Sure. Appreciate the presentation and appreciate you being here tonight. I think oh, what . Oh, there is . Oh, sorry. Do we have any Public Comment . Yeah, i got it. Seeing none, Public Comment closed. So my observation was, at the hearing, there didnt seem to be any dispute between the restaurants or us when we us, when we debated it, that there should be opt in or opt out. I think there was broad consensus, i think we all agreed on that one. That does not need further discussion. I think we all need on the health score, and i didnt hear any objections from the Restaurant Industry, either, and it doesnt seem like its a big ask of the delivery services. But that seems fairly nonconfrontational whats the controversial . Yeah, thats what i meant to say. So the live issues, from my perspective commissioner yakutiel, you mentioned formula retail and how that plugs into it. And then, you know, i dont get the sense that the you know, there was a ton of debate about catering and limited restaurants other than there was a sense that the Planning Department should be aware of this and, you know, obviously, we dont want to have a lot of ghost kitchens suddenly clogging up commercial corridors and competing with brick and mortars on some sort of an unfair playing field. It sounds like they are going to take a look at it, but if anybody feels like we should not take a look at it. Yeah. I think there was a difference between limited kitchen, ghost kitche kitchen, and pop up kitchen. It does seem like the Planning Department was noting it was happening in certain cases and trying to clamp down on it. And i think if were giving a recommendation to planning, it is thank you for doing that. Please continue to do that because i dont think anyone had major issues with it happening, it was where it happening. Right, and where it could potentially lead. Right. As commissioner ortiz said, you know, sometimes our job is to make sure that a potential bad thing doesnt happen in the future because we didnt keep our eye on it. Yeah. So on that point, i think dominica, thank you for writing that there. I think my point would be to specifically say that ghost and cloud and virtual kitchens should not be allowed to be zoned as limited restaurants. They should be zoned as catering, and they should not be allowed in our major corridors. I agree with that. It doesnt say that with as much teeth, but thats how i think it should be said about it. You know, the only thing i have is laurie from g. G. A. Said these can sometimes fill spots that can be vacant, and she sort of outlined that that was a good or she recognized that that was potentially a good thing. I dont know if she was speaking against her interests. I think that maybe speaks to a larger issue that we can delve into during our retreat. You know, there are a lot of businesses that are, you know, maybe not anybodys third choice, but, you know, maybe third, fourth, fifth choice in their neighborhood, and theyre, you know, filling a vacant spot. And id like to get a sense of the commissions point of view in terms of how much weight does that hold, you know, the fact that theyre filling a vacant spot . Is that enough weight to say yes to maybe another non nonretail use, non you know, depending on each neighborhood, everybody has a different kind of feel. All of our corridors feel very different to one another, and noncomplementary business. Is that, like, okay because were just, like, trying to fill spots right now. Right. And to that spot, aunjon spoke quite eloquently to that spot referring to that model. We drove him to that model and aligned forces with businesses that practice that model, and now were going to recommend pulling the rug out under that model. I think its where the business is. I think in this specific instance im talking, like, more about the neighborhood commercial street, right . Like yeah, but i think the businesses that he has, i think theyre, like two block away. Yeah, its off of 24. I think that if the spirit of some of these regulations could work. The problem, the way they stand, a Small Business could take two or three years going through conditional use. Thats the real problem, because if conditional use would actually work, then poof, a couple months, the community has input, you can stay here, whatever the community wants. Thats the spirit of conditional use. The problem is its not working the way it should be working, and thats the problem, like you said. The problem is storefronts, neighborhood districts, they want them all filled. If thats what they want, thats what they want, but unfortunately, thats not going to happen in San Francisco. Yeah. I think this is a tough one in San Francisco because i do think we have an issue of vacancies in our commercial corridors, but the way i think about it is i do think that these businesses could, in the immediate or longterm, pose a threat to restaurant. I think in the shortterm, were squeezing restaurants, and this is an opportunity to generate more revenue. But this is a [inaudible] oh, my goodness. If these spaces are able to, in the medium and longterm, lower their prices and have their own kind of brands in there that are reducing time and costs for restaurants that are now in direct competition for businesses on the corridors, it could have a direct impact on an industry that is already under threat. So when you and i think about this journey together thats happening on commercial co corridors, i think about the businesses that are already there that have helped the community. I dont think i think we can have an open mind. The issue is i actually see that this particular kind of business could hurt if it is hurt, if it is located on a commercial corridor, the brick and mortar locations on that corridor. We have concentrated neighborhood commercial corridors for a reason. I think, you know, we all want to be very careful with the commercial corridors, and i think its well said. I think its a real concern. I i guess part of me is wondering whether this particular component is quite ripe for us putting our stamp on, you know, recommending a specific course of action. And by that i mean, so far, we have a sample size of one. Were seeing a possibility of a trend, a possibility of harm, but we dont have actual harm yet. And im a little concerned just lightly and i think reasonable minds can look at this two different ways. Im just wondering if maybe the right time to sort of advocate sort of forcefully for an issue is when people are complaining about it . Or is it premature for us to get involved when g. G. A. Says there isnt a problem right now . I think, with respect, thats why were here, and were trying to be proactive and not reactive. And i dont see a reason why we would not, having taken all this information and provide some clear prescriptions of what we think should and shouldnt happen. Wouldnt it be easier to do it proactively, if there isnt anybody right now trying to get in the neighborhood corridors, to just say we dont want it there before we have a bunch of permits that go out, and then, we have to get them stuck in the c. U. Process or whatever it is . Right. Now we have to remember, with the businesses that are there, theyre giving them, like, a oneortwoyear extension, and its a lot harder to undo something in the community. Oh, yeah. I think its a very fair point. Steph steven, i think you have a viewpoint on this. Oh, yeah, i like what shes saying. I agree with that. Okay. I think the catering, thats where we can be the most proactive. Theyre doing exactly what uber did, and after, its too hard. Yes, dominica. Just one point of clarity, the one virtual and ghost kitchen that has been allowed in a neighborhood commercial corridor was allowed on permit because it was miscategorized, and i think that had been maybe lost in the conversation on the 26 . And so corey, the planning administrator, explained it, that the concept would be catering uses, which are generally permitted in the Industrial Areas of the city and not on the commercial corridors save for i think its the mission and c. T. So the instance that were thinking of may in fact not actually be may not have passed muster to begin with, and so were would ordinarily not be allowed to proceed under the status quo . Correct. Okay. Thats helpful. But thats when they right now, their current model is they get a facility, and they cluster group, correct . Right . Individuals, some proviivate, thats their model now. But if i wanted to bypass this, i didnt want to cluster this and have a single caterer use, thats how i would bypass them if i wanted to do that. I see ben walking up. This is one of the most complex pieces of it. My understanding it four facilities, if you dont allow a member of the public to walk up, and youre only doing delivering out of a kitchen, that is a catering use, and catering uses are not generally permitted in the neighborhood commercial corridor, so anybody that is doing that business should be under active neighborhood enforcement. So the point was to treat businesses the same way in the neighborhood commercial corridors. I think it was the discussion that you had about directing planning to keep up the good work to make sure that folks arent doing that. Where the catering retail and formula uses intersect is in the more Industrial Areas where catering is permitted, formula retail are already permitted. To the extent that there are questions around this feels different than other catering other types of catering you know, when we think of catering, we often think of somebody catering an event or a wedding or that sort of thing. I think that moving forward, when we talk about where catering uses are permitted, these things these types of new types of models are permitted and thinking on an individual districtbydistrict level, that seems certainly an area ripe for consideration moving forward. But i think in the future, making sure that businesses are consistently treated in the neighborhood commercial corridors to prevent any sort of unfair advantage. That seems like the most immediately attack there. So how hard would it be to say catering resources cant have formula retail in them. Im sorry. Im confused. Those two things are both permitted in the same area, but this is one business that is a catering use but also has formula retail in it, so its like a business within a business. Isnt that different . Well, i dont know that the Planning Department would take that same assessment that its a formula retail. It has formula retail in it. If the facility is not operating for public walk up, its not public retail at all, so the argument around formula retail is different. Its the look and feel it doesnt really lend itself to a nonretail use. That being said, i think, certainly, when we talk about catering, different types of catering, in the neighborhood commercial corridors right now, a neighborhood restaurant can do some accessory catering as long as it doesnt do catering directly to consumers, so theres different ways to think about catering. So im just not sure again, i would defer to the Planning Department on this, but thats the argument on trying to use a formula retail sort of approach. Were talking about being equitable and protecting Small Businesses from competition. What i think were trying to get at is a mcdonalds shouldnt be able to open up in noe valley versus direct delivery. I dont know how we think you guys get there, but if thats what the commission believes, it should be clearly stated, that we dont believe that formula retail should be able to operated in catering areas where theyre allowed. Is that whats written here . Effectively. I just want to make sure this has teeth. Thats all. Yeah. I know its not making sure its full molar, claw, but i think its important. I think the purpose of thursdays meeting is to layout what the issues are . I dont think that this document is intended to be in its final version . I think that that should be reserved for the march 23 meeting, where something more formal can perhaps be put into place after the discussion on on thursday . So yeah, i agree. Let me just say and this, i think, encapsulates it. We know what catering is. You deliver to the bar mitzvah, you deliver to the wedding. Retail is you walk up to the place. This is a gray zone between catering and retail. This is a customer where theyre ordering from mcdonalds, and its coming from mcdonalds, but its coming out of this third area. Its catering retail or retail catering. Its this third category, and i think thats where we are all sort of struggling is it does seem like a place thats ripe for inequitable distribution even just in terms of, you know, when i go on grubhub, its pretty clear that some restaurants have paid more money or done a deal, but theres some reason why some restaurants always come up near the top. Its not a stretch to think that companies with better resources have more chances to exploit that, and it would be more challenging for new businesses to come up. I dont know how to sort of describe that to the Planning Department, if thats the issue, or but i agree with commissioner yakutiel, that however we describe that, it needs to have some oomph behind it, that thats the concern. And, i mean, thats actually new information to me. I did not know that a major fastfood chain was the number one delivery option for those two services. So for me, even, like, right now, that changes the math a bit in terms of where i see the potential concern is because we definitely want to protect, you know, these unique mom and Pop Restaurants that are what makes its why many people come here. So dominica, where are we making a motion were not voting on anything today. Can i do one more . Im so sorry. On the city economyist piece, i understand the desire to analyze the terms and kind of what the metrics are, but why wouldnt we if were going to provide a recommendation to provide an Economic Analysis, dominica, help me understand, you said it in the way you described it, but you said, the way its written, its really about the metrics. Can we ask the city economyist to do a more flushed out study how many people are dining out in our city, what apps are being used, what hours . I think, for me, the chickenortheegg question we know restaurants are suffering for a lot of reasons. We heard them, but is part of the reason theyre suffering is these apps are taking people out of their restaurants and theyre eating in their homes or are these apps sort of giving them a buoy . If thats something we could ask the city analyst, that would be extremely helpful. So the way that and i am not an economyist. But the way that its explained to me is we collect sales Tax Information based on, like, hotel and restaurant sales and these entities are being classified as restaurants, and we cant breakdown those sales between brick and mortar restaurants versus online restaurants. So when you go to i think its the openbook s. F. Or its under the Controllers Office, where you can analyze how much sales tax has been collected based on the category, you cant definitively see a specific trend based on what youre describing . And so i think the idea is to ask the city controller, one, whether or not its possible to even conduct such an analysis, and if its not, how can we get there . I mean, do other people think thats a good use of time to try to understand that trend because i wouldnt want to waste we have a lot of terms of priorities in terms of questions we want answered. I think a big determinant of that is what director tumlin was speaking to, the fact that people are working eight hours a day far away, and then, they have to go back to their home. This is the nature of the beast of capitalism that were in, is its continually obstructing us from our social environments. I feel that there could be so many factors, and thats what i know traditionally economyists fear, are those variables. So i feel like it would be worth it to have, like, a consultati consultation, like dominica said, that can give us the answers. Right, but i dont think there are tools that can give us that information. You have to make it up. You have to figure out the sales Tax Information, and on that sales Tax Information, how you break that up . This is a new thing, so you have to go out and figure that out. I actually think some of that, like, data, we can find that on, like, private industry, like, not relying on, like, necessarily government data. I know i found a lot of data on, like, kickstarter. Theyre so excited to get started, theyre going to give you, like, all of this trending data. So maybe if we were able to do a little bit of research themselves on, like, trending data in the delivery app space, i think we would find that on our own in our own kind of, like, places because a lot of that data is available in our city. I like that. And ill just, you know, kind of point out again, i went into that hearing not knowing anything about how the Restaurant Industry would look at look at it overall. I try to be really respectful of them because theyre the industry most affected by any decisions or recommendations we might make, and i was really quite surprised to hear them say that this is not really you know, we dont look at this as being an issue, and i kept waiting for other restaurants to step up and say no, its a huge issue. It seems like to a t, and even when when i talked to other restaurant owners, these delivery apps help them stay in business. So i i would recommend that we look for that existing data before we start asking the city controller, whos probably going to be quite busy with more pressing issues. Yeah. Okay. Cool. One thing that we didnt really talk about in the hearing that im kind of curious about is that were talking about equity, like, equity between, like, Small Businesses and Large Businesses. And one of the big things we heard is restaurants are really burdened by permitted and all these different permits and all these different fees and things. But labor costs, like, labor costs are really hurting all of our Small Businesses. And i look at some of the legislation thats been passed recently, like ab 5. How would that change the picture if, all of a sudden, uber eats had to wake up tomorrow and had 20,000 employees, versus where were all struggling just to keep five to ten employees employed . So were talking about a lot of little things, but, like, in this larger picture, how does it look a little bit different, whether its more equitable to Small Businesses or not or whatever . Like, id like to have some sort of understanding as to what the world looks like if all of a sudden these really Large Companies have to have formal employees that way that were you know, right now, were talking about taking care of people for basic things like sick leave. When people talk about mandated sick leave, im wondering, is that going to be my responsibility also or is that going to be a government responsibility or whose responsibility . And so i think when were talking about the restaurant issue, i would like to kind of just explore, i guess, like, what those types of opportunities could be in terms of actual enforcement of things that have already passed. I love that you bring that up cause thats really my biggest p biggest pet peeve. You know, we start a business, and of course were going to be successful if we dont have to pay all those fees. Amazon, uber. You know, in my neighborhood of color, we used to have gypsy cabs, and then, in the 90s, we got persecuted. And then, later, all somebody has to do is put it on an app, and pay a fee, and its cool. Thats what you said, the whole formula conditional, they operate in that complexity, and thats how they make money. They cant operate like we operate, so thats what we have to do. So, i guess, two thoughts about that, right . In terms of the ghost kitchens we have the opportunity to tour one, and they do have employees, and theyre employing at least the one that i toured had a lot of employees, and theyre well paid. In terms of the delivery services, i think ab 5 has now, you know, kind of addressed that. It remains to be seen whether itll have a level playing field, but it is an attempt to address this issue that uber eats and other companies dont have to pay workers comp and sick leave because if you work for them long enough under ab 5, you have to be that person. With respect to what we have in front of us here, my question is, is this something thats not included on this summary memo, and if its not, should it be, and how should we characterize that . I think we want to do something to stop the bleeding right now. Just like what got us here . All the crazy legislation and rules that our legislators passed. Weve just got to stop the bleeding from our mom and Pop Restaurants. Just put a little more thats what you were saying, commissioner. But this is great for me for now. Okay. Great. So whatos presenting this on e 12 . Regina is. Okay. So i think were going to strike the Economic Analysis part oh, no, just forget about it. Well keep it the way it is. Yeah. We agreed to do that on our own. No, i think we can consult with the controller instead of tell the controller. No, the way its written is fine. I wanted to add more and beef it up, but i think its fine. Commission recommends the controller determine what metrics that makes sense. Its just asking them to figure out how to study it. Its not asking them to study it. Its asking them to provide direction so we can all study it together. Okay. I wont die on that hill. That seems good. All right. Somebody want to make a motion . To direct the staff to present the document at the hearing on thursday, march 12. I make a motion to direct the staff to present the document at the hearing on march 12. Seconded. Motion by commissioner hui to support to direct staff to present the memo at the special hearing being held on the same topic on march 12, seconded by commissioner yakutiel. Roll call vote. [roll call] motion passes, 60, with one absent. Okay. So that brings us to the topic of the day, possibly the big topic of our lives, coronavirus. It has been a already had a huge impact on many of our local businesses. We received statements at the start of the hearing already talking about the extraordinary impact that coronavirus is having on businesses. We know from looking at whats happening in other countries that we are in a very challenging moment, and the next the next few weeks, the next few months are really going to be an extraordinary challenge for many of our businesses. And typically, in order to introduce an item, you have to introduce it far enough in advance that theres sufficient public notice. To overcome this public notice, we as a body have to make a determination that there is an emergency that represents a public serious threat of public injury, and in this case, the public injury would be to the businesses that were charged with representing. So i guess first, dominica, you didnt quite break this up into two, but when i was looking at it, we have to break this up into two. So first, we have to make a finding that this is an emergency that requires our action, and so i will make that motion that we make that finding. I second. Okay. You have to do a roll call on that one. The motion that you make the finding the motion should be that youre adding an agenda item based on a finding. Well, first, we have to find we have to have the finding, then i guess to make the agenda add the agenda item based on the finding. We have to do the finding first. So then, there are three motions so then, there would be three actions. There would be a finding, and we add an agenda item, and we talk i think its still just two. Whats the third one . Youre making a motion to establish a finding, but youre not saying that youre adding an agenda item based on that finding. Oh, right. So then, i have to so if you say the Commission Finding that theres justification enough to add this agenda item to tonights meeting. All right. I think that might cover it for you . Oh, right, but whats missing here is there actually has to be a vote on the finding thats the emergency. Mmhmm. Thats the motion, and then, ill do a roll call vote. Thats the motion. I dont see it in here. I move to add an item to yes. That language is pulled directly from the charter. All right. When i was looking at the charter, it looked like two separate things, but if youre saying i defer to your expertise. Great. Then i make a motion to urge the city and county of San Francisco to declare a state of emergency on the impact of coronavir coronavirus or covid19 on Small Businesses. [roll call] motion passes, 60, with one absent. So were going to so the city so we took the roll call. Do we have a discussion now or do we do Public Comment before the discussion . You can discuss, take Public Comment, discuss again. Okay. Got it. So well do a discussion. So my thoughts on this are our leaders, the supervisors, the mayor are facing unbelievable challenges in how to navigate this, and i simply want to give them our strong support and to urge them to move as expeditiously as possible because i think that the health of our Small Businesses is not just an economic issue. The sma if the Small Businesses start to go out of businesses, then the workers lose their jobs, and they cant afford their health care, and then, the situation escalates and becomes even more dire. I think a lot of times, tough challenging issues can be politicized, and i want them to know were here for the supes, were here for the mayor and for the community that we exist in. Thats my thoughts on this, and i welcome any of your thought or questions on this. I agree. Ive definitely been hearing different types of impact. I think the city can play a role in terms of supporting the l. B. E. S that they work with, local Business Enterprises that are in contract with the city for multiple things, and the city is starting to cancel all of these events, caterings and not giving proper notice, like, day of notice, so i think that the city, yeah, should be giving Small Businesses notice, and that could be a form of mitigation, for example, that were presenting today. I think the Police Department should be aware that many Small Businesses already cant afford to have less closing time because theres been less people coming into the businesses, and theres Security Issues arising from that. Those are just issues that i think the city could play a role in. Any other commissioner comments . When i was trying to give some thoughts around, like, this whole thing because its such a huge it is such a huge impact for all of us right now, i was reading something i think it was, like, three babes bake shop and how their catering business has been hard hit with the loss of orders, and i was you know, and it it kind of goes back into what we were just talking about in terms of, like, the Restaurant Industry and things like that. And, you know, a lot of our Small Businesses are finding ways to really take advantage of the Technology Sector that we have here, and now thats really been floating a lot of our Small Businesses. And its, like, as much as i you know, i think we as a city have this, like, tension between the technology between, like, the Technology Sector and our Small Businesses, but i think many of our Small Businesses have come to rely on that, right . Were looking at the statement from andy town in front of us, and i think thats something that we need to kind of think a little bit more about in terms of, like, you know, diversity, like, in our city. Our city has really become very reliant on one type of workforce and one time of economic pillar, right . Like, thats kind of the anchor to San Francisco and the bay area is technology, and a whole sector of people can really go and work from home, behind their computers, and theres a whole sector of people who, like, cant. They have to be there, and i think in the news, this has been highlighted, the inequities. But i think as the commission, i would hope that as we talk more about equity, that this is this is another example of kind of maybe why diversity and all these other things can can really i dont know will become more important, i think. Im really frustrated because im not a Public Health professional, nor do i presume to be, and i know that the people that are making decisions that are affecting Small Businesses are weighing all sides. And at the same time, you said that there are a cascade of effects when you basically shutdown chunks of the economy. This is, of course, were talking about it in our city, but italy has shutdown the entire city, closed it down. Whats frustrating is i dont understand this virus. My best friend is an e. R. Doctor, and im talking to her, and she said its serious. But when youre talking about shutting down businesses and all these layoffs, its consequential to people. Im very worried that in the in an effort to slow down the transmission of a virus you know very little about, we are throwing tens of thousands of peoples lives into melee. And i dont that is just a frustration. Im not saying that anything should necessarily change or be done about it. I think in 72 hours, i lost 15,000 worth of bookings, and ive been talking to a lot of Small Businesses owners, trying to get our finger on the pulse. I think were trying to be strong for our communities and our employees, people especially on this commission. But in local communities, we are in many ways, were Holding People up, and it has been hard to stay upbeat and positive and excited when i know that this is possibly just the beginning. But that is what i am doing. The other thing ill say is, just to put it out there, what how this is potentially affecting the Large Businesses in our city, maybe even more than the Small Businesses in some ways. You think about the moscone center, the pier buildings, some of these buildings that have massive, massive rents. Cancelling some of these events in a peak season could be a devastating event for some of these businesses. So while we represent the Small Businesses, the level of worry and acti and anxiety, to me, surpasses us and kind of the Large Businesses that anchor our city. Ill just say im glad were doing this, and i support it, and thank you, commissioner laguana and dominica for bringing this up. Let me just say on a personal level, we had 30 or 40 rentals on south by southwest. Our business helps artists go on the road and play shows, so its going to be increasingly difficult for people to have public gatherings. That is an extinction event for us. Maybe ill have to resign. I might not have a business in a month or two, so but nonetheless, its simply an extraordinarily challenging event that none of us have any context or ability to sort of assess. There is no plan for this. Weve never had anything like it in our lives, and i feel really strongly that this is the time to stand with our government and with our leaders and support them. Not out of Blind Loyalty because we really are in this all together, and the only way were going to get out is all together, and we need to support each other as a body, as citizens, and as members of the city and as members of this country and as members of this planet and help each other get through this this time. Its going to be hard. Its going to be really rough, but weve got to be there for each other. So, you know, part of my motivation here is letting our government, letting our leaders know that were standing with them, even as were asking them to stand with us, and i just wanted to i just think its so central to what our responsibility is under the charter to standup and speak for all business. I cant imagine a moment within our lifetime, and thats including 911, where everything seemed more on the edge, and so yeah, thats how i feel about it. Public comment . Do we thank you. Do we have any Public Comment that wish to speak on this . Good evening, commissioners. Im amelia lindy. Thank you for all you do to help Small Business, and thank you for this really important topic. I wasnt sure if this would be covered, but i think its top of mind for all of us. Im the Small Business manager for the San Francisco chamber of commerce, and im here tonight to try and bring up this topic, because just as you all are facing, the questions are coming in, what if somebody gets sick at my office, and i have 50 other employees . How are we going to make it through the next through months with practically no payroll . How am i going to make payroll . We live in this beautiful city that brings people together for meetings, celebrations, and forums for new ideas. Normally, when we make it a situation where people are going to start limiting their gatherings, were going to see a huge impact across San Francisco. So im here because im concerned for Small Businesses. We are currently in an almost unprecedented situation. We need to ensure that our businesses have not only the resources, but they will surely need to remain viable during this challenge, but also the information and tools that they need to support Public Health. We can all agree that there were there are challenges to running a Small Business in San Francisco, even before coronavirus, and we all know there will be challenging to running a Small Business in San Francisco after coronavirus, but what we have to urge our leaders to do is to ensure that we will have the same Small Businesses that we know and love now here also when coronavirus is gone, so we have to think of anything. Provide some relief to policies or restrictions that could help. Maybe some relief on business fees, tax extensions, something to get a break, maybe even direct financial support, whan when this is all over, we have to help our Small Businesses recover. We cant make coronavirus go away tomorrow, but the one thing the city could do is alleviating uncertainty. Thank you so much of for bringing up so much for bringing up this really important topic. Commissioners, do we have a motion to approve a resolution to support Small Businesses and Work Together to support the city . So moved. Second. Motion to approve a resolution to support Small Businesses. On that motion [roll call] motion passes 60 with one absent. Thank you. Next item, please. Item 8, commissioners report. Allows president , Vice President , and commissioners to report on recent Small Business activities and make announcements that are of interest to the Small Business community. Do we have any members of the public that wish to speak on this . Seeing none, Public Comment is closed. Do we have any commissioner reports . Oh, yeah. Commissioner zouzounis . We are our body wrote a resolution a little while back regarding the mandated cans and bottle collections that are coming from calrecycle that is a state entity, and San Francisco has defaulted on, so the burden is falling on small merchants. The media is going to be picking this up at one point soon. I think we need to on circle b to this as a commission because not only is it the Pilot Program so the context real quick, for those of you that are not aware, we wrote a resolution to kind of expedite this process of alleviating this burden on Small Businesses and allowing San Francisco to adopt a more flexible recycling program for people looking to redeem c. R. V. Value, and this was then created as a state initiative to allow San Francisco to take some of this revenue that Bigger Companies like safeway and such, who are paying the in lieu fees instead of collecting the cans and battles. So theres now basically a fund that San Francisco has access to, and a Pilot Program is to be set up to allow mobile recycling or a different type of collection. This has now been stalemated, and we need to check in on it. In the meantime, merchants that were now previously exempt are now getting letters from the state, saying that exemption is revoked, and Small Businesses are also receiving, like, 30,000 or plus in delinquent services for the state, because you get fined each day if you dont collect these cans and bottles. Even if you do, the state doesnt believe you, and so its a huge, huge issue that needs to be revisited, and i think the state isnt moving as fast as they should. Ive been hearing both reports from media asking and merchants, showing theyre revoked. So thats my reported on that. Okay. Commissioner huie . I wanted to report that i attended the San Francisco small Merchants Alliance meeting. It was a really great meeting. I really liked the fact that they invited the chief connectist to talk about business tax economyist to talk about business tax. Sounds like that particular body wants to ask if Small Businesses can just be exempt from business taxes cause its just not a large enough Revenue Source to really make a real impact . Instead of, like, just tweaking the numbers, just getting rid of it altogether, like, seemed to be their ask. So i heard a little bit about what the commission does, and that was another meeting where, you know, i think sharing what the commission does simply was, like, enough and just kind of getting them know, like, were here. And they really wanted to just revoice, too, that, you know, they have a very unique set of goals, and they are a unique organization, and that, you know, i am happy to talk to them, you know, more, so i was really grateful for that. Awesome. Im so glad you went. Commissioner yakutiel. Two. I ran for the board of the valencia commercial corridor businesses, and i won. I just wanted to publicly thank commissioner huie for having brunch at mannys this weekend and coming in as i dealt with lots of orders and cappuccinos, so i wanted to thank you for bringing your family to have brunch at my spa. Thank you. Thank you. Anybody else . Do we have any members of the public who wish to speak on commissioner reports . Seeing none, comment closed. Next item. Item 9, new business. Allows commissioners to introduce new agenda items for future consideration. Discussion item. Commissioner yakutiel . So i had names of three businesses that were on my phone. Two are social home and kitchen in either the richmond or sunset, and then, this place called odd dog in the frog. Its a bar thats mad dog in the fog . Mad dog in the fog, and i think its been here for a really long time. Those are the businesses that are closing that i would like to adjourn in honor of if possible. I would agree. Id like to add one special group to that, which is i would also like to close in honor of all the medical workers who are assisting coronavirus victims and will be assisting coronavirus victims, especially locally and, you know, now with the ship docking in oakland, i think that, well, a special shoutout for them. I would also say, under new business, that at our next session, it is likely that we will have legislation from the board to consider. I believe that theyre crafting and drafting mitigation coronavirus mitigation. We may also consider the chamber of commerce has drafted a letter on behalf of the many business groups. We may choose to make some recommendation to the board based on that letter based on whatever legislation winds up being crafted. I just wanted to give you a heads up that that is likely to be coming up at the next meeting. Okay. Anybody else . Okay. Do we have any Public Comment on new business . Seeing none, Public Comment closed. Sfgovtv. Please show the office of Small Business slide. Welcome. It is our custom to begin and end each Small Business Commission Meeting with a reminder that the office of Small Business is the only place to start your new business in San Francisco, and the best place to get answers to your questions about doing business in San Francisco. The office of Small Business should be your first stop when you have a question about what to do next. You can find us online or some person here at city hall. Best of all, all of our services are free of charge. The Small Business commission ask the official public forum to state your concerns about the Small Business policy in San Francisco. If you have questions that need to be answered, start here at the office of Small Business. Item 10, adjournment, action item. So moved. Second. Meeting is adjourned at 7 41 p. M