One way to mitigate is set up 529 for theeldes for the oldest. Life changes and you can reassign the 529 plan. You can reassign th the 529 plao the younger brother. There are more considerations to talk about different i guess not so much lineage but i i am losing the word. If you try to go from child to grand child there are considerations in there. Like the gift and tax planning considerations. It is such a small subset of people with those issues. More people are trying to come up with funds to pay for college and end up taking out loans. If i remember correctly, publication 502, i believe the 529 plans are revised a bit. I forget the exact dollar. You can take out to pay for Student Loans. Is that right . You can pay for Student Loans out of it including your own. Francis was talking about transferring to another family member. One child doesnt need it and you can transfer to a family member. This is apart tha a part of thet you can transfer upwards to parent or grandparent. If you are saving for the Colleges College you can pay off your own loans or take a class somewhere, get your masters degree and use that money. 529s under correct tax law you can use 10,000 per year per child for private school, not just for college any more. One more point to make. In the original question, you said Something Like should i just put my money in the stock market instead of 529 . That is not either or. 529 then invest it. You are putting in the stock market within the 529. You do have potential for good growth in there. Absolutely. As francis mentioned you dont want to just put it in there and sit in a cash account. It was more so that the question was more geared toward instead of a 529 is it better to have more flexibility in an independent brokerage account. Francis covered it in terms of the considerations there. Thank you, heather for adding to that as well. We are getting to 10 45. I have a final question for you. I have seen a lot of questions coming through. I want to make room for that. The last question is a quick one for both of you, francis and heather. The Financial Planning and getting educated is complex. People are stuck because they say where do i begin and start . It is hard, right . Sometimes there is a million resources. Based on your professional path and things helpful for people can you give us recommendations on how to start the journey on Financial Empowerment and personal growth and finance . You want to start, francis . Sure. I put together my distilled version of the resources. Number one is the website called humble dollar. I came across it one or two years ago. I am impressed how broad the topics are. It is an in depth personal finance resource. Now, i tell them to go to the website. There are guides on all sorts of subjects including retirement, college, investing. It is not one all and end all. It is not going to answer everything. It would argue it is a good job of it. It is amazing to me. I think if you are like me you are a big fan of stories. The richest man in babylon, a lot of you have heard about it. I include that. That is my biggest take aways from the three next books. A good savings habit is the bedrock of financial life. Everything else flows from it. If you have really you can be an amazing investor. If you dont have good savings to come up with capital to put the investing skills to use it is not going to do as much good. That is one of the things that resonated with me. Again, i am sure you have seen this book already. Your money or life. It is an idea that money equals time. People are well aware of, but it is limited and finite. That is intentional with your spending. The last one simple enough to pass to while you are working on it. You have one or two options. You can be rich or look rich. It is hard but i think people realize nobody can truly multitask. It is putting yourself into one thing at a time. If your goal is to become financially independent secure it is easier if you focus on one thing at a time. Those are my one page resources especially the website. Fantastic. Thank you. How about you, heather . I wont top those great general books. There may be some websites in front of your face that you dont think about. Irs. Gov. They get the final answer. I tell tax students if you find a different answer on irs. Gov, you win. It is well written. The answers are there about taxes including retirement planning. It is easy to understand. Medicare and Social Security also have good websites. Medicare. Gov and ssa, Social Security administration. When you get ready for medicare, it is complicated. You have to make a lot of decisions. It is not easy. One resource is California Health advocates. Hicap provide free advice when you are making decisions about medicare. They have branches in San Francisco and elsewhere. Invaluable tool. Take advantage of it and use that. Thank you. I have learned something new here. As i have been sheltered in place i had to shelterinplace with my parents. We are talking through medicare conversations with them. This is timely. I am going straight to these sites to find out more. I would like to recommend another pair of books. There are some smart guys who wrote get with yours about details of Social Security. Get with yours for medicare is another one. Those are easy to read and have answers to every scenario. Thanthank you, heather. With that i will turn it over to annie for some assistance in getting to the questions that participants have been asking as we have been talking. You guys are timely. I was going to interrupt you for the q and a portion. We have a question for francis. In your scenario instead of paying off credit card, can you pay into the house mortgage . Could that be an Investment House that is not your residence . Thank you. I appreciate the question. I can give a yes or no answer here. If you use the 10,000 in cash and 10,000 in Credit Card Debt. If you use that and say you had a mortgage on your primary residence, yes, the same. Because year primary residence equity is not counted in the Financial Aid formula. When it comes to Investment Property it doesnt work that way. The value of Investment Property is going to determine the value of the mortgage or debt on that property is not considered the same way your Credit Card Debt would be considered. In this case if your goal is to make yourself Better Qualified for Financial Aid because of the formula and the differences that it looks at your assets and debts you are better off paying other things than Credit Card Debt and primary residence mortgage right after that. Thank you. Here is a question. For roth 401k if you leave the job and roll over, if the Financial Institution requires you to selling, will you be taxed if you are under 59. 5 . No, it is not distribution if you roll it directly from roth 401k to ira. Do not tell employer to mail money to you. Have it trustee to trustee transfer. Send the money from the 401k to ira. One little secret tip. Roth iras one of the reason they are so great. They are no required minimum distribution. If you have money in roth you can take it out when you have to. You never have to take it out. You can leave it for children. Roth 401k do have required minimum distribution. Rolling the roth portion into a roth ira when you leave your job. Thank you. We have time for one more question. That is about Student Loans. Is there any advice about programs other than deferment to help with student loan payments . Are there Forgiveness Programs for those not in an Education Career . I will chime in on the second portion the forgiveness portion. The careers that qualify are not limited to education. It is expanded into some other roles within government. I couldnt tell you all of the different roles that qualify. It is not just education. Irow hate for people i would hate for people to think only teaching jobs qualify. You have to understand that typically for forgiveness type loans they are only for loans that are from the federal government. It is not typically private loans that qualify for this. A lot of people have a good understanding of the type of loans that you have and options available. Sometimes i know it is asking a lot of people. Try to have a conversation with your lender. I think it is no surprise people are una lot of stress financially and just Everything Else going on in life. Lenders are very receptive to conversations. It is getting close to the end of session one. At this point i want to ask you to wrap up with any closing remarks. I will say thank you to francis and heather. I think the hour went by fast because you covered a lot of ground and had a lot of different questions. I hope the questions and answers were helpful. The recommendations you gave in terms of how we can begin the path and journey in terms of Financial Education is good. It is never too late to start. The more you read, the more you know, the better you can engage in conversations and ask more detailed questions and learn more the more you go. There is no wrong question. There is always a good time to start. I hope this helps people to get on that first step. Thank you francis and heather for taking time to be with us. Thank you. You are very welcome. Thanks for having me. Thank you so much. It was an insight full conversation and providing resources for participants. We will share the recording afterwards. You are letting us know you are unable to assess them. We will answer any questions we did not get to. We are going to take a five minute break before the second session. Please look at the bottom of your screen. There will be a survey. Give us feedback about session one. We will take a break and be back in about five minutes. Thank you. If you are just joining us, welcome to the first family forum. Before we begin the second session, i would like to let you know this is being recorded and shared on youtube live and sfgovtv. I will ask our interpreter to explain in language so all participants can understand. Can you please also good ahead and explain so everyone can get settled in their channel, please. Thank you to the family Digital Wealth forum. It is put forward buyer our assess or since 2017. We have served 1300 families and we will support you through this pandemic. Before we start the second session, i would like to go over a few housekeeping continues. We are committed to serving all populations. We are offering spanish and chinese interpretations today. If you prefer those select the language channel at the bottom of the screen. Click on the icon and select the language. There is a q a function at the bottom of your screen. At any point you have questions type it in and we will address it during the webinair. If we run out of time we will follow up with you. I would like to ask vivian to explain so participants can get settled in the channel. Thank you. Right now it is 11 10 a. M. May i ask our leader carmen chu to join us as we get started with the second session, Financial Assistance for families. Thank you everybody for either joining us for the session or continuing on with us. We think especially during this time having access to credible and good Financial Information is more important than ever. I am really excited t to introde shannon. Especially now as we see so many different families and people struggling with covid19 because of job loss or because their businesses are on hold, i think it is important to try to provide as much financial help as we can and this session is going to talk about the resources that are available to families and to individuals to be age to plan for the future. I want to introduce shannon before we get to the questions we have received. For shannon she is one of our longest standing partners when it comes to Financial Education for citizens. I want to thank shannon today. She is the executive director for homeowner ship sf. She believes Financial Education is personal empowerment. She ran before in this role a real estate business for 10 years working with first time home buyers and small investors and helped them to make sure they understood what local home buying assistance programs were and other resources. She transitioned to Nonprofit Sector i in 2011 to advocate for Home Ownership. She has seen all of the different transitions in the bay area. As she developed the Financial Services and First Time Home Buyer Program at San Francisco Lbgt Community center and administered the Lending Circles Program in partnership with Mission Asset fund previously. She served as vice chair for habitat for humanity from 20132014 and was on the board of directors for Home Ownership sf prior to joining as staff member and now executive director. We are fortunate to have shannon join us and to be able to share her experiences and really help us to get good information so people with understand what is available to them. I want to jump right into this and ask you, shannon, welcome, to ask you. I understand Home Ownership sf has a network of counselors to provide one be on one services to families in different neighborhoods on the ground what are you hearing from families . What are the big issues that are really arising in particular because of covid19 . Thank you for inviting me here today. We really value the partnership with the Recorders Office and you are helping with to get people more options. That is very important part of the work we do. Thanks for inviting me here today. Thank you for having this fantastic event. We know it is a challenge to try to bring information into the community with shelterinplace. Woe ar areHome Ownership sf hass that are the approved housing agencies in San Francisco. Asian inc, San Francisco lgbt center, Mission Economic Development Agency and San Francisco Housing Development corporation. These agencies came together in 2008 with the Mayors Office of housing to create Home Ownership sf as a way for these different agencies serving different populations and parts of the city to be able to come together in response to the foreclosure crisis happening at that time. We are excited to Work Together to ensure that regardless where you go that we are having the same standards with Service Available to make sure we are providing the services. The member agencies are doing the direct services, provide housing counseling and workshops and education and services. Our role is to help coordination and the convening of in network, and also we work more broadly speaking with other agencies in the city. We frequently partner with San Francisco Bar Association and housing economic advocates for legal services, we work with the Tenants Union and housing Rights Community and other agencies to provide eviction defense to avoid being a victim and displacement. It is everyone coming together to understand the importance of this work and that no one agency can do it alone. We need to be proactive and very coordinated. The to ensure they get the services quickly. One good thing, i would say, if we can start with a lake at the end of the tunnel is that from the perspective of Loan Services and Banking Institutions, you know, we know that it took them a while to get on board when we had the 20082009 foreclosure crisis happening. There has been some infrastructure that has been developed in the meanwhile that we are able to tap into at this time. We have seen the loan versus coming to the table much sooner and with valiant efforts to help prevent another foreclosure crisis to work with people experiencing financial distress and really what we see is that the more open that conversation is the more the versus are understanding what people are going through, where they experience financial distress, particularly related to covid and shelterinplace. The more understanding and flexible that they can be. You cant get help if you dont ask for it. We are involved in trying to help people not only to have the individual support and education and resources that they need, helping people who have had credit issues or undebtor relying on credit card goes to get through. We can work with services directly with the authorization and approval from the homeowner to negotiate with Banking Institutions for your mortgage as well as for other creditors . This is important. For many people going through a tough time it feels like they are going through that time alone. It feels like a big stress not to deal with only financial instability but figure out the solution on their own. I want people to know that we do have this resource here, Home Ownership sf, with counselors and people to help you. I want to make sure people know that because you dont have to do it alone and you can get help from people who are kind of doing this daytoday and know what to share with you. Just make sure that folks organize and have links. Home ownership sf is there to help people through this process. I wanted to ask you. You mentioned that Home Ownership sf or affiliated organizations can help with negotiations with banks. It sounds like you said a lot of banks are coming to the table faster or Financial Institutions are coming faster. Is that what you see in terms if people are asking for assistance are you seeing the banks are willing to engage in conversation and Home Ownership sf is providing assistance with those conversations as well . Absolutely. I do think that we are in the calm before the storm here. We know as we have looked at people who are unable to pay the mortgage payment or Homeowners Association dues in march, april, may. As compared to july we see people struggling. As i mentioned the sooner you reach out, we are finding that many of those services are absolutely willing to work with people. You know, not going alone is huge. This is very, very overwhelming kind of stuff. Often times just the very basic being able to get somebody on the phone can be a real challenge for homeowners. The great thing with our housing counselors is to leverage the contacts and relationships they have. Where we might be struggling for a response from the loan servicer. We might have a way to the backdoor or to help encourage communication to happen more accurately and consistently. It does require an initial assessment. The first thing and one of the reasons why nose relationship those relationships are valued is because they know we have met with the clients. We have assessed the situation and we can quickly and accurately relay what is going on. The first step, of course, would be to come in and meet with the housing counselor, bringing the documentation you have. We can help you make sense of that and figure out what is the best game plan and solution i would like to proceed with. They will sign thirdparty authorization to give us ability to talk to the servicers. That is confidential information that needs to be authority to happen, but we are able to then step in and help guide those conversations especially for people who may still be working or have other obligations dealing with home schooling and family situations. Finding the time to be able to do that and follow up and, you know, make sure we are staying on them. That can be a real challenge and that is a huge burden the counselors can help alleviate. It doesnt mean we do it all for you. There is some participation required on the part of the homeowner to make sure things are moving forward and to provide documentation. We help guide that process. The other thing to say is important that if we do start seeing foreclosure numbers rise we will see a rise of scams that come along with that. There will be people who are in the business of accepting money to try to counseling or to try to negotiate on the homeowners behalf, and that is kind of a big red flag that they are charges, especially if they want thousands of dollars upfront to do anything. That would be an opportunity to run in the other direction because all of our services are provided at no cost. The city helps to fund to make that possible so these services can be provided free of charge to the homeowner. We have seeing an increase in the fraudulent behavior happening. People are vulnerable at this time looking for possible hope and help. It is overwhelming. They are more susceptible to when people come to them and say i can help fix the problem and make it go away but you have to pay me ahead of time. We want be to caution people and reach out to nonprofit partners like Home Ownership sf to make sure you are connected to credible information. I think this idea about credible information and help is really important especially at this time. If you or somebody you know are in need of this kind of assistance, make sure they hear this message and that you share this resource with them. I am going to jump into a lot of people are curious to know whether there are Financial Assistance programs currently available for families or homeowners or tenants. Can you tell us what you know is out there . Absolutely. The most common solution we are seeing at this time, which is quickly and readily available to the majority of homeowners, is forbearance. Now this is a very general term that can mean a lot of different things. There can be different terms depending upon the Service Error the investor be that is behind the loan. Basically what forbearance is temporary suspension of mortgage payments that is agreed by the servicer to allow somebody to recover from financial hardship. Loan servicers are in the business of servicing loans, not necessarily wanting to do foreclosures. Obviously foreclosure is a last result for many of them. Often times we do find that those servicers will easily agree to forbearance when you can document the financial hardship. What that means you have to pay the amount at a later date. It would allow you to skip payments for three or six months, up to a year, during which time interest will continue to accrue, but no Monthly Payments will be due. Typically the late fees are waived. In some situations late fees are included, for the most part they agree to waive late fees. Repayment is where you are going to see the biggest difference. In terms of the terms different forbearances, person to person and bank to bank. It could be there is a lump sum, balloon payment due at the end of the loan. You pay for 30 years and there will be an amount set aside that needs paid at once. Sometimes you will see where however many payments were miss will be tacted on to the end of the balloon. You would pay into that 30 year term to pay the loan in full. What we see more commonly is repayment plan over agreed upon period. Perhaps temperature institution will say, you know, six months we will agree to this forbearance. At the end of six months, you know, you can either pay a lump sum that is due at the end of the forbearance or more commonly we will give you 12 months where we slightly increase the payment you are making when you make mortgage payments again to pay that off over 12 months what you didnt pay for that sixmonth period. If you have been offered a forbearance, it is really a challenge to get those terms documented. It is really important to ask to make sure you are clear on what the conditions of that forbearance are. This is something that we have been seeing where the counselors are having to make that extra effort and push to help make sure that we get something in writing, not just verbal yes without proper clarification and documentation of those terms. That is important to not just on the phone, yes, this is what is going to happen. To know what is going to happen aten of forbearance period. Especially now it is hard for folks. If they dont have the ability to make the ends meet right now, it is tough to imagine if things dont change they will be able to do that in a few months time. Can you tell us about any loan programs that might be available to folks . Absolutely. The forbearance is the first step. It is pretty much insure for most federally backed mortgages. That means the mortgage has been insured or is completely owned by a federal agency. If your loan is insured by fannie mae or freddy mack. Fma or va loan, that is an automatics forbearance that is required of the servicer before they proceed to a foreclosure process. That really is the first step. For people for whom this does not apply, for people whom this does not solve the problem. There is city money available. We have the help loan which has been in place for several years now to provide 50,000 for homeowners who have become delinquent or need additional financial supfort from the city to get through and retain housing and keep their home. Iin response to covid, the city has laxed some requirements and created a special loan for people experiencing financial hard ship due to covid19. This is Available Online at the Mayors Office of housing to apply. A housing counselor can help you apply for it. That can be an amount of money between 12 to 25,000. That is to help with either current or or future hoa dues, back mortgage payments, and also that can be applied to special assessments if that is something somebody has a condo with a special assessment situation. We are seeing the help loans focusing on the mortgage, needing assistance with the mortgage. Of course, to prioritize this money for the people who need it the most the city is going to want to see that if you have a mortgage forbearanc forbear fore possible they want you to use that first before reaching out for the possible funding. Next question is for me. This is a question that came in from participants who asked about generally property taxes. We understand that in addition to typically for many people if you are still servicing alone your mortgage payments typically are a large expense in terms of maintaining your home. On top of that there are property taxes that are a portion of what you are paying. The question here is will this years property taxes be delayed or reduced . Are there tax savings for seniors . One thing is important for people to know. In San Francisco we have to follow the same rules that every other county, all 58 counties in the state of california follows with properties taxes. It is a county function basically governed by state law and state constitution. Probably many, many people know part of the property tax laws are governed by proposition 13 as well. Some of these things are not changeable even by the state legislature. There are some elements that could be changed by the state. That is to say that we have had a lot of questions from people about whether we can in San Francisco just simply not collect property taxes or do something different. We are tied to state law. If the entire state is doing something, we can do it. We cannot have a different outcome in San Francisco that way. There are things important to know. There is a senior through the controller, state controller, there is something called a tax Postponement Program for seniors. This is for seniors and individuals who are disabled. The Interest Rate is Something Like 6 or so. More information on the state controllers website. That means that if you qualify for the programming, you meet the income threshold for senior you could have your property taxes postponed and not pay them and you would pay them back with interest when you sell them or when you sell that property or if the time comes you pass away and your home is basically transferred to a new owner. There is an Interest Rate associated with it. Not probably the right program for everybody. It exists at the state level. We will share that link with you. This is for seniors. There is an income threshold in terms of people who qualify. I want to go to our slide, if holly can put up the slide to show the considerations for how it is to think about whether or not covid19 impacts property taxes. The first thing to make sure that you understand is just the timeline for how property taxes are created. You are going to see that there on the very left of the slide you will see january 1 is an important date every year in the. [ a brief recess wain theassess. It is the day when we decide what your values are at that point in time. We look at the value of your property at that time and compare to your protected value. Whichever value is lower is what we use in terms of value to calculate your property taxes for that upcoming tax year. Why we show you the property tax timeline. From january 1 when you receive the bill and make the payment. There is a lag. We are looking as of january 1 every year for what that market value comparison is you wont receive the bill for that payment until october of that year. For january 1, you receive the property tax bills in october. They dont become due until december 2020 in this case and april 2021. There is a full year plus lag when you make the property tax payment for the january 1 date. Under the covid19 scenario it is unlikely in general we will see a big Market Impact to january 1, 2020. Why . Everybody can recall in San Francisco we did not have a state of an emergency declared until february. Past that day. Shelterinplace didnt happen until march, much later than the january 1 date. The shelterinplace and covid19 didnt Impact Market values january 1, 2020 which is used for your up coming tax bill. We know there is an impact in terms of market and what we can see going forward. If we continue to see the shelterinplace scenario for a long time, if we continue to see significant drops in terms of Business Activity and economy and market values of property going to january 2021. What we expect to see it could have an impact on your value at that point in time and we would see an impact in that out year. In terms of property taxes for this upcoming year, we dont think there is a huge impact related to covid19. The out year we might see that impact. There is another slide we want to share with you. This is something that is important to understand for prop 13. Remember when i mentioned that we take a look as of january 1 about what your market value is and compare to the prop 13 value. People ask what is my drop 13 value . This chart helps to understand that. If you take a look at the lower line on the graph and it is a solid line, this is something that illustrates what the prop 13 value would be. What happens in this scenario. You purchase the property in 2019. You bought for 700,000. Under prop 13, the way we have to tax you is we would essentially have that value 700,000. That was the market value when you bought it. We would increase assessment or taxable value by no more than 2 or the california cpi, whichever is lower. We have seen the cpi has been roughly 2 . It is a cap how we can increase it. It has rarely fallen below 2 . That is the inflation factor. As you can see in 2019, it was 700,000. In 2020 we would generally be taxing at 700,000 plus 2 increase. Every year there after. Now take a look at that line, the dotted line above. This might reflect and actually this number here in terms of the in my example that 1 million should be connected to that 700,000 there. The way that works we would say what is your market value as of eachtieach particular year . In 2 2020 it is 700,000. Perhaps at that time the market value if you tried to sell the home or buy a like property is 1,100,000. We would take the 700,000 value and use that number to tax. It is the lower of the market value or prop 13 value. If we go forward to 2021 value, i think this is an example where in 2021 we see a drop or reduction in market value of your home. In this case you still wouldnt see a property tax reduction because take a look. Your prop 13 value is still lower than that reduced market value. I think this is why we want to be illustrating how we would take a okay, call the next line item. Line item 10, disclose any or all discussion on item 9 held in closed session, San Francisco administrative closed session 67. 12a, action. Motion to not disclose. Second. Okay. The motion not to disclose. Commissioner dejesus, how do you vote . Yes. Commissioner elias, how do you vote . Yes. Commissioner, how do you vote . Yes. Commissioner cohen, how do you vote . Yes. How do you vote . Yes. President taylor yes, you have five yeses. All right. Public comment on for members of the public that would like to make Public Comment on line item 10, please call in. For those who are already logged on, please press star 3 now. No Public Comment . No Public Comment. Okay. All right. So do you want to go to line item 11 . [indiscernible]. Line item 11, adjournment, action item. Can i have a motion . Motion. Second. All right, on the motion to adjourn, commissioner dejesus, how do you vote . Yes. Commissioner elias, how do you vote . Yes. Commissioner rukter, how do you vote . Yes. Commissioner brukter, yes. Commissioner cohen . Aye. Taylor how do you vote . Yes. Vicepresident taylor is yes. You have five yeses. All right. Have a good night, everybody. Thank you. You. When i first moved here people come to San Francisco to be the person you want to be can be anyone you want. The community is so rich and diverse that im learning every single day San Francisco is an amazing photoy town historically been base on evolution and that applies to every single professional field including philanthropic arts today what i do is photo based art manifests traditional forest and some colonel lodge and other frames of Digital Forest is a meeting that has been changing like super rapid and the quality is not extended by the medium if you took forest in school or you get a job in a newspaper theyll give give you a list of how to create a philanthropic story my goal to break down that model and from a to b that is unique and allows the ability to incorporate different types of i believey about propels someone through the rise and a fall of their own experiences one of the main things im trying to contribute it unconditional narrative form the narrative art of photograph the in between of photos how does a group of photos come together as how to use the space between photos to alight emotional responses from the audience and bring innovation and create bodies of work that narratively function the way that photos do San Francisco as the commission came out and you visited me and one of their prerestricts was to find an art with enough work to fill a large says that a quad down the hallway downstairs and we hung that quad to feel like a train station that constant sensation from all Different Directions some of the major characteristic of the landscape festivities the blur of the train their 70 Miles Per Hour and theyre not perfect as opposed to to what landscape will look like it creates a dichotomy for people insides the train not just the story of the subject it is not just the visual design the composition juxtapositioning, etc. Not just all autobiography boohoo it creates pictures with meaning within them and then some of the portraits feel awkward some of them feel welcoming and the person that mime making the picture is really comfortable and other ones feel awkward and weigh i didnt and tense that sensation is counter to what we feel like makes a successful portrait that sensation makes that work it is hard to be an artist in a city is 100 percent focused an business the cost of living is expensive and to value your success not scribble on financial return creates a conflict between the paramount egos in San Francisco today. You see a lot of artists leaving for that reason because you need space to make work my ultimate goal to make work that firms people firms this gift and just the experience of life and of their worst and of the amazement the wonderment of everything around us good morning, everyone, this is november 4th, 2020 budget and finance committee. Im chairman fewer. And im joined by supervisor mandelman. I would like to thank sfgov for staffing this. The board of supervisors and the Committee Room are closed. However, members will be participating in this meeting remotely. [inaudible] Public Comments will be available on each item on this agenda, and we are streaming the number across the stream. Each speaker will be allowed two minutes to speak. Comments or opportunities to speak during the Public Comments are available by phone. Meeting i. D. 146291707. Then press pound twice. When connected, you will hear the meeting discussions, but you will be muted. When youre item of interest comes up, dial star 3 to be added to the speaker line. Best practices are to call from a quiet location, and turn down your television or radio. Alternatively, you may submit Public Comment in the following way, email to myself or the budget committee. Icommittee. It will be forwarded to the supervisors and will included as part of the official items. Items acted on today are expected to appear on the board of supervisors agenda on november 10th, unless otherwise stated. Chairwoman can you call number one . Authorizin [inaudible] members of the public who wish to provide Public Comment on this item shall call 415455, 0091. And then press pound twice. If you have not already done so, dial star 3. And please wait until the system indicates you have been unmuted and you may begin your comments. Chairwoman today we have karea zee, and also available, rebecca benisini. The floor is yours. Thank you so much, chair fewer. Im elaine forbes, and thank you supervisor mandelman and supervisor walton. I just wanted to share a couple of words in perspective of how important it is for the porto consider our tenants during this period. And our team has done a lot of work with our variety of diverse tenants during this time. We have been in front of our commission four times on the tenant situation, and it started with rent deferral, and now rent forgiveness, which is in front of you today. Our program is really designed to keep a commitment to our tenants, to provide a real maximum opportunity for our tenants to weather the storm. While we were encouraging a safe reopening, but the opportunities for our Retail Stores and restaurants are not there during the pandemic. And well be stronger if we can recover today. The port has also supported rent relief for our maritime tenants and for our Small Business tenants. Several of whom reside in district 10, for policy reasons, to keep us stronger and more resilient and equitable as a Port Organization and for mission purposes. I wanted to thank you again for looking at this ordinance, and understanding some of these old leases, this is the practical solution to provide rent forgiveness. I want to thank you for all of your work. She has been on the ground with all of the details. And rebecca and boris are also here to also answer questions, and they have provided a considerable support on this effort. I wanted to say how important this item is for the port. With that, ill turn it over to kazia. Thank you, director forbes. Good morning chair fewer and supervisors walton and chairwoman cues me onexcuse meone second. It seems as though were having a problem displaying the power point. Madam clerk, would you mind assisting. And supervisor walton is in the cue, and so if you dont mind, i would like to hear from him first. Supervisor . Im actually waiting to speak when they were done with their presentation. I have a question when theyre finished. Chairwoman all right. Are we able to assist with the power point. Point . Yes, good morning, madam chair. I do not have a problem viewing the power points. Chairwoman im sorry. I see on my screen the content there was a problem displaying the content. Am i the only one that cannot access the power point . I can see it. Chairwoman you can . I can. Chairwoman all right. I guess i might be the only one that cant see it, and i dont know why. Is that going to be an issue, or do you think you can just walk me through this . Director forbes, we had previous conversations before about your rent relief, and im familiar a little bit about the program that through your rent release program before. Im okay not seeing the power point if youre okay with me not seeing the power point . Im okay with that. I think well be sure to get it to kelsey and your team, and if kazia can walk through the details for the public and other members, i think that would be very beneficial. Chairwoman kazia, my apologies. I dont know what is wrong with my screen. Were living in a new technical age. We can send a p. D. F. Version of the power point after the presentation, so if you have any followup questions, we can answer that. Okay. I will begin. My name is kazia tonalium, and im the manager of Business Strategy at the port of San Francisco. As director forbes shared, im joined by my colleague rebecca benisini. And weve been working very tirelessly on the proposed ordinance that is in front of you today. And i apologize, i dont know why it says november 11th, but today is obviously not that date. So i will move on with the presentation. The proposed ordinance in front of you today authorizes the Port Division to amend certain leases that are subject to charter section 9118. In addition to that, the ordinance also waives Administration Codes and environmental codes that are typical requirements that have been enacted after most of our most recent modifications of each of the leases. Many of the leases that are subject to this are retail leases that have that are primarily up in our fishmans wharf area. 10 of which date back as far as may 1st, 1970, so you can imagine there have been many code changes since then if we had to in corporate them would pose certain buena burdens on many of the businesses that are severely impacted by the covid19 pandemic. We have been working on the ground with many of our tenants to understand their financial circumstances, and so we believe we are presenting a very thoughtful rent forgiveness package to you all today. So as an overview to our rent Forgiveness Program, we propose a sectorbased approach to rent forgiveness at this time. We are focusing on our percentage rent tenants, those that are retail tenants, most of them restaurants, and other commercial operators throughout our portfolio. The second bucket of our tenants are maritime tenants, that as can imagine are fishers, our crabbers, our fish processors, and our other Maritime Operations along the waterfront. And the third bucket are local Business Enterprise tenants, and we have about 27 of those in our portfolio, which typically are very, very small operators, and need our assistance at this time. As an overview, we propose, for the percentage rent tenants, to forgive all base rents and require the payment of percentage rent as defined in their current lease agreement. The relief area would be from march 1st, 2020, through april 30th of 2021, next year. Our maritime tenants in this particular case we will be forgiving all of their base rents for a period of march 1st to august 13st, and for our l. B. E. Tenants, forgive their rents from march 1st to may 31st. For percentage rent tenants, it would give forgiveness for up to 14 months, and affects approximately 48 tenants, but for this particular ordinance, we are focusing in on about 32 leases. The estimated rent to be forgiven in this bucket is about 11. 8 million, but this will be offset by percentage rents that are collected throughout this period of time. For maritime tenants, the rent Forgiveness Program is going to impact roughly 121 maritime tenants, and provide forgiveness of up to 1. 5 million, and for our l. B. E. Tenants, for the period, it will affect up to 27 tenants, and forgive about 150,000 dollars of rent. In total, this will approximately forgive 13. 5 million and is a pretty significant package in light of all of the economic Recovery Efforts the port is deploying at this time. So for a rent forgiveness, or proposed conditions, generally, all of our tenants will have to supply all of their other responsibilities under the lease. They will have to maintain agreed upon hours of operation during this period of time. They will have to submit an online application with key data points to help us execute their lease amendments. And anyone who has outstanding balances will have to rectify that balance prior to march any balances prior to march 1st will have to be rectified to take advantage of the program. And they will have to pay their percentage rent due according to their lease agreement. For local Business Enterprise tenants, they will have had to maintain l. B. E. Status during the forgiveness period. In addition to rent forgiveness, we are also proposing rent credits to apply. The two rent credits we are proposing are rent credits for anyone who has paid rent during the forgiveness period, and a startup rent credit for tenants who may have made physical investments in order to open up operations. When shelter in place orders have allowed them to reopen. In terms of our Program Administration on the rent paid, any tenant who had paid rent during that period of time shall be able to take a rent credit in fiscal year 2021 through 2022. That rent will be equally divided over that period of the year, and can be taken against their rent, but not against any other fees or charges under their lease. If a tenant has a lease that has expired prior to that, we would allow for a lease extension to occur to cover that period of time. If a tenant were to terminate in advance of that extension, any forgive me rent credits would be extinguished at that time. For the startup rent credit, many of our tenants in this particular sector have had to make investments in signage, other physical structures to separate and safely socially distance. And so our tenants we are requiring that our tenants provide proof of such expenditures. That rent credit can be taken immediately against any balance that they have. They will be required to rectify any outstanding balances that had occurred prior to march 1st. And the rent credit will expire if it is not exhausted prior to june 30th, 2021. Again, any early termination in advance of the lease term, those rent credits would be extinguished. So i know the budget analyst will touch on this a little bit more, but our total base rent that were going to be forgiving is about 13. 5 million. Our percentage rent at this time is very uncertain. We dont know how the market will react as reopening continues to improve, but our projections show either a range of 6. 6 million up to 13 million of percentage rent that could be collected in the coming months. At this time, i just want to reiterate that our rent forgiveness package, and the ordinance in front of you, will really allow for port staff to streamline the rent forgiveness to our tenants. I know many of them are very much hurting in this time, and we want to do our best to get that relief to them as soon as possible. Rebecca and i are here to answer any questions that you may have. Thank you so much. Chairwoman thank you very much. Supervisor walton, i am going on the recommendation of the clerks office, to reboot my laptop because we have another presentation further along in our agenda. Would you mind chairing this meeting while i am doing that . And i see youre in the cue also to speak. Thank you very much. Thank you so much, chair fewer. Thank you so much for the presentation, director forbes. I do have one question, and my question is i know that this is necessary, but as i look at some of our port tenants, i have concern and would like to know will we be forgiving rents for tenants like indescernable . No. A subtenant like jewel will not be forgiven. Many of those Office Tenants are subleases to our master tenants. So our master tenants at this time arent covered by this particular ordinance that is in front of you today. Thank you so much. And supervisor mandelman, i dont see that you have any questions. I think this will be time for us to take Public Comments on item number one. Can you check to see if there are any callers in the cue. Operations, please let us know if there are callers that are ready. If you have not already done so, please press star 3 to be added into the cue. If therare there any callers who wish to comment on item number one . Mr. Chair, there are no callers in the cue. Chairman thank you so much. And i do not see any comments from supervisor mandelman. I am to a point where i do kind of want to at least see what is going on with chair fewer. So im going to ask that we recess for two minutes, just so that we can give chair fewer a chance to get back because i dont know if she has anything she wants to ask. Lets recess for, lets say five minutes, and come back chairwoman thank you, supervisor walton, for assisting me during this technical clich, and my apologies that i wasnt able to access it, but i did receive the emails, and i did see your power point, and thank you very much. I understand that Public Comment has been taken on this item. Is that correct, madam clerk . Thats correct, ma madam chair. Chairwoman so the Public Comment is now closed. This is nick bernard from the budget analyst committee. This would waive the lease modifications related to the ports rent Forgiveness Program, and also raise the administrative code and environmental code requirements enacted after the most recent requirement. This lease approval applies to 38 leases. At shown on page five of the report, the cost of the rent Forgiveness Program is approximately 13. 5 million, which may be processed by ongoing payment for certain tenants. Because this proposed ordinance needs the board of supervisors approval, we consider approval to be a policy matter for the board. Chairwoman thank you very much, mr. Bernard. Colleagues, any comments or questions . Supervisor walton, did you want to comment on this . Thank you so much. [inaudible] chairwoman thank you very much. Actually, i just want to say that i wish that all landlords were as generous and thoughtful as our San Francisco port. Im assuming the San Francisco port is actually in this rent forgiveness this rent Forgiveness Program has enough funds to actually do this. It is pretty costly. I mean, it is 13 million, but you can absorb the cost into the loss in your budget, is that correct, director . Yes, it is. Thank you for that question. We did put it in the budget that we are operating under now assumed reduction, and were balanced and managing, yes. Chairwoman so we hope that well be up and running soon, and that all of our tenants can once again, you know, be profitable. And so i think that this is timely, and i think this is completely generous. And i think it is the right thing to do as a city and county of San Francisco. With that, i would like to make a motion to move this to the board with a positive recommendation. May i have a roll call vote, please. Yes. On the motion, supervisor walton . Yea. Supervisor mandelman . Yea. Chair fewer . Yea. There are three yeas. Chairwoman my apologies for the technical clich. Madam clerk, cu clerk can you pe call item number two. Call to suspend imposition of th the cannabis indescernable to increase the exemption of gross from cannabis activities from the fires 500,000 to the first one million, and beginning january 1st, 2022, to increase the upper range of gross receipts attributable to the cities from cannabis business activities, subject to the 2. 5 tax rates on gross receipts from retail service, and the 1 tax rate on gross receipt from other venues. It goes from 1 million to 1. 5 million. Member of the public who wish to provide Public Comment, call 4156550051. And then press pound twice. If you have not already done so, please dial star 3to speak. A system prompt will indicate you have raised your hand. Please wait until it indicates you have been admitted and you may begin your comments. Chairwoman thank you very much. Supervisor mandelman . Thank you, chair fewer and supervisor walton for considering this ordinance. A little bit of background, on the number 2618, the San Francisco voters approved the cannabis business tax, proposition d, which imposes a tax for cannabis business activities. It is currently to go into effect on january 2021, for the retail sale of cannabis products, 2. 5 including 1 million, and 5 of gross receipts for over a 5 million. 1 up to and including a million, and 1. 5 of gross receipts over a million. The first 500,000 dollars of gross receipts are exempt from the tax under the 2018 ballot measure. Please stay with us. [please stand by] while approvals happening more clear over the last year than previously, many of the businesses have been paying rent under empty locations for years. Proposition 6 2, legalizing cannabis in california, established a 15 excise tax on Retail Cannabis sales at the state level. The California State Legislative Analysts Office completed that reducing the tax rates would expand the legal market and reduce the size of the illicit market. In addition, i. R. S. Code section 280 e disallows the business incomes for cannabis businesses. Businesses cannot write off payroll, marketing rent, utilities, et cetera, which results in a higher federal tax burden than for other industries. Now god willing, over the next year, changes may come at the state and federal level that would reduce the tax burden on cannabis businesses, allowing for a local tax to be less impactful on the businesses. This relief may allow local tax to be assessed without the need to increase retail priceses and continue to drive the illicit market. As i mentioned, in addition to spending the cannabis business tax, through december 31st, 2021, the ordinance helping reliever the ongoing tax burden on smaller cannabis businesses, by increasing the exemptions for gross receipts from the first 500,000 to the first 1 million. And the the upper range of the gross receipts that are subject to the tax of 2. 5 sales for nonretail sales from 1 million to 1. 5 million as i said. The shifting of the tax burden upward is similar to what were doing for all Small Businesses, as part of our larger Business Tax Reform efforts. Over the last month, correctly, San Francisco has deferred a number of taxes and fees for Small Businesses, struggling to stay afloat during the pandemic. And in this climate, i believe it is now an appropriate i believe now is not an appropriate time to impose an entirely new tax on the cannabis industry. Rather than assessing the tax on a newly informed and stilldeveloping industry, we can allow these businesses and particular equity operators to recoup the significant startup costs associated with cannabis businesses and continue to invest in their workforce and create good jobs for San Francisco residents in need of work. I will say that we had put off hearing this item in this committee until after the election. Last night we got the good news, which i think will stick, that propositions f, i and l all look like they have passed. So there is going to be new revenue coming into the city. And i think in light of that, in light of our efforts to support Small Businesses, you know, this is not a time to be imposing, as i said, a new tax on Small Businesses. So i hope this is something that we can were all comfortable moving to the full board today, as the tax is set to occur in just a couple of months. I can endev tore answer any questions. Tom i do want to thank tom, my staff, who has been working on this and can also ask questions and answer questions. And we also have ray law from the office of cannabis as well. Chair fewer okay. Colleagues, any comments or questions . I had a few. Supervisor mandelman, whats the projected revenue loss for this change . Supervisor mandelman so that is in the b. L. A. Report. Chair fewer okay. Lets hear the b. L. A. Report first. Would that be okay, supervisor, thank you . Can we have the b. L. A. Report, please. Yes. Nick menard from the budget legislative office. Supervisor mandelman states this amends the tax recreation codes to dispense the business tax for calendar year 2021 for cannabis. The ordinance would also increase the gross receipts exemption by 500,000 and modify the tax structure. As we show on page 10 of our report, the estimated tax loss over this year and including next fiscal year, we estimate to be 7point 1 million. We do this consider this a policy matter for the board, because of decreased revenues. Chair fewer okay. Thank you very much, mr. Menard. That answers my question. And then, you know, supervisor mandelman, because in 2018 this is a voter mandate, i am wondering so were able to legally do this and not go back to the voters . We are. 2018 measure contemplated allowed the board of supervisors to reduce the rates. Chair fewer thank you very much. And then has this issue been brought before the Cannabis Oversight Committee . Im going to ask my staff to answer that. I do know that it has been before the Small Business commission. And im not sure if tom is on the line . I am. Im here. Is my camera on. Chair fewer hello. Good morning. Thank you, chair fewer for the question. As supervisor mandelman said, its been before the Small Business commission and received recommendation there. But it was not assigned to the cannabis oversight
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