Supervisors may have approved a “no drama” budget for the next two fiscal years at Tuesday’s meeting, but its submission of some charter amendments planned for the November Ballot included some low drama and high showmanship—at least by the board’s standards. 

They also approved a leg up in an affordable housing lottery for veterans, as well as a deal with meal delivery services to drop the companies’ lawsuit against the city. 

Additionally, a hearing on one ominous economic indicator the city is facing appears to be forthcoming. 

Budget to Bed

Supervisors and Mayor London Breed’s office hashed out the budget agreement at a late-night committee meeting last month. Both sides emerged pleased: It was described by budget chair and District 9 Supervisor Hillary Ronen as being less contentious than past years, but it still featured some minor fireworks and a whole lot of “add-backs.”

• Supervisors cut Mayor London Breed’s proposal by about $88 million, with cuts to police overtime and some street ambassador programs. That said, a spokesperson for the mayor described her budget priorities as “largely intact.”

• Supervisors replaced the cuts with add-backs based on requests from constituent groups, which initially totaled around $1.5 billion. Representatives of these groups camped out in corridors at City Hall during negotiations, and some even participated in discussions. 

• Approved add-backs included $58 million in general fund monies, mainly reflecting a desire to balance the economic needs of downtown with those of the neighborhoods, and continuing covid aid to at-risk groups. They also got the mayor to agree to issue $140 million in debt financing to fund new affordable housing and improve existing properties. 

• Covid and other issues made the process a rollercoaster. Pandemic-related inflation drove up labor costs, evaporating an expected surplus made possible by emergency federal and state aid. 

• The Budget Committee and other supervisors spent much of the Tuesday vote congratulating themselves on a process Budget Chair and District 9 Supervisor Hillary Ronen deemed “more enjoyable than expected,” with “minimum drama.” 

• Despite praising most aspects of the budget, District 5 Supervisor Dean Preston cast the sole vote against it, based on concerns over increased law enforcement funding that “leaves the board with too few tools to push police toward transformative reform.” Preston also voted against last year’s interim budgets for the same reasons.

Struggle Toward the Ballot

Meanwhile, discussion over planned charter amendments to be approved by voters in November produced more drama as well as a possible threat of litigation. 

• Five measures, including one calling for a Homelessness Oversight Commission, another that would abolish the newly created Sanitation and Streets Department, and another shifting regular elections to even-numbered years were successfully submitted for the ballot—but some had opposition. 

• The SAS department measure continued to be opposed by labor groups, including the Laborers Local 261, which sent a letter to the supervisors this week stating its opposition.

• Sponsor and District 3 Supervisor Aaron Peskin, who said he believed he had responded to labor concerns, described himself as “dumbfounded” by the letter. Other members felt that the new department should be given a chance to prove itself before backtracking, despite continuing concerns over costs. In the end, the measure was submitted by an 8-3 vote, with members Ahsha Safai and Gordon Mar, along with board President Shamann Walton against. 

• The elections measure was given a hard sell by sponsor Preston who even brought along some graphics to make his point about how shifting elections to even numbered years would increase voter turnout, especially among people of color and younger voters. Despite that, submittal was approved with 7-4 vote, with members Matt Dorsey and Rafael Mandelman along with Walton and Mar in the dissent, most citing practical concerns about planned campaigns for bond measures and other issues. 

• Other measures, including establishing a “student success fund” to help public schools improve pupil achievement and wellness, and requiring rent control for certain new housing projects, were continued until July 26.

• Also continued after a hearing was member Connie Chan’s Affordable Housing Production Act, which had its own hearing including a statement during public comment by a representative of the Housing Action Coalition voicing concerns over the lack of environmental review. 

• Peskin noted the irony of the group, which advocates for less bureaucratic obstacles to housing, “weaponizing CEQA” (the California Environmental Quality Act, often used to stymie housing). HAC is a co-sponsor of the competing “Affordable Homes Now” also favored by Mayor Breed measure and sees the supervisors’ entry as a poison pill.

• In their letter to the supervisors, HAC deemed the supervisors’ measure “a transparently fraudulent attempt to confuse and divide voters … rushed to the ballot for political reasons. … So rushed, in fact, that it has not gone through the normal steps required for a measure … including review under CEQA.”

Housing for Veterans

A proposal from District 4 Supervisor Gordon Mar to extend Certificate of Preference eligibility to veterans also passed. The legislation would entitle veterans of the armed forces to higher priority in the application process for Below Market Rate (BMR) housing. 

• Mar originally mentioned veterans’ preference as a policy goal during a roll call last year. He then proffered legislation calling for a disparate-impact study to see if the policy would end up delaying other applications, and then introduced the actual legislation this May. 

• Under the policy, veterans would join a number of other cohorts eligible for a bump in the housing lottery process. Those include tenants evicted due to use of the Ellis Act, and former city residents who were displaced during the “urban renewal” era of the 1960s. 

Hungry for Compromise

The board also approved another Peskin-sponsored item amending rules approved during the height of the pandemic targeting certain sharp practices by online meal delivery services such as GrubHub and DoorDash, which sued the city over the rules.

• The amendments are part of a compromise reached between the city and Grubhub and DoorDash, which are now dropping their lawsuit against the city over the original legislation. The deal was first reported by the San Francisco Chronicle last week. 

• The compromise allows for an exemption from the 15% cap on delivery charges for services that also provide additional advertising for the contracted restaurant. Peskin and co-sponsor Safai noted the role of Uber in the negotiations with the city and the Golden Gate Restaurant Association, and deemed it a “victory for small business.”

Fiscal Foreshadowing

At Roll Call District 2 member Catherine Stefani introduced a letter of inquiry to the Assessor-Recorder, Controller and other departments asking for information on the impact of reduced demand for commercial space, especially downtown, on city tax revenues. 

• In her introduction, Stefani noted San Francisco’s special vulnerabilities to the impacts of remote work, due to the preponderance of technology employers, as well as continuing office vacancy rates, transit use and other indicators still significantly behind other leading cities. 

• The inquiry will likely result in a hearing on the matter this fall.