individuals are resilient and economically self-sufficient, and we work to maintain communities and ensure that they have healthy physical, social and business infrastructure, we are resolute in trying to limit displacement and in all our work, we're trying to eliminate causes of racial disparities. so with that, i want to turn it over to benjamin, who will lead us through the remaining slides. thank you. good afternoon, supervisors benjamin mccluskey, deputy director of mcrd, i'd like to start by setting the context of our budget using a reference point from last fiscal year. actually, approximately 60% of what we spend every year does not go through the board's annual aau process and is appropriated at other times. so to give you a context of what those fund sources are, we're looking back to last fiscal year based on our expenditures, in

fiscal 22, 23, about 24% of our expenditures were from geo bonds, about 14% of our expenditures were federal and state grants appropriated by the board through the accept and expend processes. about 12% of our expenditures were development impact fees, like the inclusionary housing fee, and then about 2% from loan repayments and 1% from other sources. so with that context, talking about the other 40% of our budget in the current fiscal year, 2324, all our total budget is approximately $190 million, and i'll walk through some of those key components, $57.5 million of general fund grants to community based organizations. that includes capital grants that are one time and of that, $57.5 million, 11.4

was assumed in last year's two year approved budget to just be one time, 44.5 million for the housing trust fund and $31 million for the local operating subsidy program, or losp. that's a work order from hsh to mchd to support permanent supportive housing units, about $16 million in renter and homebuyer assistance, and also about $16 million from the market rate housing developers as one time contributions, about $8 million in housing impact fees and former redevelopment agency housing asset revenue, about $6 million for debt service, $5 million in payments to other city departments, including department of real estate and city attorney, and about $3 million for cultural districts, which, as you may recall, is funded by hotel tax. so that was

a summary of our current year budget. looking ahead to fiscal 2425 for the mayor's proposed budget, we see a total budget of approximately $192 million, which is a net increase of 1.7 million from the current year. and we get to that total with some key pluses and some key minuses that i'm going to summarize as the first plus is, is $20 million assumption of revenue from the residential vacancy tax. that's a new tax approved by the voters on the ballot. that revenue and spending of that revenue is just an estimate at this time. the tax will not be collected until the beginning of calendar 2025. and that revenue is also going to be on controller reserve, pending resolution of some litigation and some further verification of how much revenue

is actually collected. but that's a placeholder for that new program in the first year of the budget, $3.5 million net increase in debt service. and that is primarily due to the debt service on the relatively new affordable housing and community facilities. cops, which were approved by the board in the fiscal 2122 budget, we see a 3.4 million increase in the lost work order, and that's attributable to 163 new units of perm supportive housing coming online, and a $2.4 million increase in the housing trust fund as per the charter. so all of those increases in the first year, offset by some decreases at the beginning of the presentation. you may recall, i mentioned that last year's two year budget assumed $11.4 million in cbo grants. were just going to be one time, many of that is one time capital projects, but that is a decrease

when you look year over year, we also have a $6 million decrease in first time home buyer assistance. that was part of the mayor's fiscal 23, 24 mid-year rebalancing. and it continues into the next two fiscal years. a net $2.4 million reduction in grants to cbos to help meet our budget target. and about $700,000 in attrition savings from not filling for vacant positions. moving on to the second year of the proposed budget, approximately $223 million, an increase of $31 million from the first year of the budget, again, i'll go through the increases and decreases to how we get there. a $10 million increase. so a total of $30 million assumption on residential vacancy tax collections, again, still on reserve, pending resolution of litigation and verification of revenue, about $8.5 million in

grants to cbos, which currently are administered by the department on the status of women. and our proposed to move over to mchd for administration. $7.7 million increase in the lost work order associated with 581 new units of perm supportive housing coming online, $5.8 million net increase in developer contributions and a 1.5 million increase in debt service. those increases are offset by a $5.8 million net additional reduction in grants to cbos and $700,000 in attrition savings. so i want to take the next couple of slides to address the steps that we went through to try to minimize our impact to the cbo community in our grant making, our discretionary general fund

budget primarily funds grants to cbos and 26 fte. five of those, 26 fte are at the san francisco housing authority. we don't pay for materials or supplies or professional services from the general fund. we cover all of those things with mostly grants, so to minimize the impact to our cbo services grants, we've taken a few key steps. you may recall earlier in the deck that i said that the housing trust fund had about a $2.5 million increase per the charter in the first year of the budget. we're deploying all of that to backfill the general fund cuts to cbo grants, we're also assuming not filling for vacant general fund fte, in addition to four vacant fte that were not filled as part of the current year budget. so eight fte of

attrition savings and we are eliminating one time capital grants for community facilities improvement. and in full transparency to the board. we want to make you aware that even after those mitigation steps, the proposed budget in the second year, fiscal 2526, still includes a reduction of $11.6 million in grants to cbos, compared to what we're able to deploy in the year before. and that reduction will align with our five year rfp process, which will start this fall. and that process will determine how those general fund grant reductions will impact specific program areas and just to summarize how we got to that $11.6 million reduction, $3.4 million of that is from current year fiscal 2324 budget, which we were able to

solve with one time solutions for two fiscal years. but the one time solutions run out in the second year of this budget, a $1 million reduction from exhausting $5 million in one time. eraf funding that was spread out over five years, $850, $850,000, from an expiration of one time federal funding that we're using in the current year to backfill some of the general fund grant reductions, reduction in a work order from dcf and then an additional $5.8 million reduction to help the overall balancing of the city budget. and with that, i'm going to turn the deck over to anna dunning from the mayor's budget office. the mayor's budget director, to talk through a couple of slides about the mayor's office, administration. all right. good afternoon, supervisors. so the department of the mayor

encompasses both the mayor's office of housing and community development, as well as the mayor's office, the administration of the mayor, so for the mayor's office budget, it's about $11 million. it is almost all people, and a few other line items. if you want to go to the next slide, so you can see our budget breakdown is staffing. there is a bit of non personnel which includes a couple contracts and then citywide work orders. and the only changes proposed the mayor's office budget for next year are citywide cola increases related to negotiations with our unions, there's a modest increase in one contract which was renewed for our federal lobbyist and then other citywide work order changes, but there are no further proposed changes. with that, supervisors, we are here to take your questions. thank you. thank you. i do, i'm

trying to understand. so how much do you have as you are opening up for your, an rfp for the next five fiscal years, i'm going to let brian chu, our director of community development, answer all the questions about next year's community development rfp. so how much are you anticipating? how much do you have in the for the rfp, we have approximately 35 million in our general fund cpo pool. we anticipate another let's say, maybe 25 million or so, depending on an ongoing work order from, hsh, which supports our erap program. and our right to counsel and some of our other tenant counseling programs, we have, i want to say, about 5.7 million or so that we use from our community development block

grant programs, and then the, the overall housing trust fund portion is about 10 to 12 million from the housing trust fund. if you look at it in the reverse order, in terms of the dollars that we know that we don't have, which might be another way of looking at it, is that we anticipate, probably $12 million less. so that includes both the 5.8 million reduction, in this round of, of budget reductions that, mr. mccloskey mentioned, along with about the same amount of $5.8 million of one time solutions that we had for this year, which will be, expiring in that next year. so so the total amount of change is about 12 million, i would say, in terms of the amount less that

we that we would have, for that upcoming rfp. and so basically it's roughly about $75 million for the next five fiscal years total. that's assuming that the revenues come in from hsh oko and housing trust fund. yes. and this federal dollars have been pretty flat so far. yeah, yeah. so we're projecting that is all 75. so because so it's all $75 million that we're projecting our general fund. no, no. so that, i mean, the housing trust fund is general fund dollars, but it's reserved in that sense. and then the other portion, the community development block grants are federal dollars, which do not show up here. and the oko dollars are similarly general fund, but set aside by that legislation. so the $35 million is what i would say is sort of the base general fund,

which was reduced from about 41 million in fy 25 to about 35 million in fy 26. so what we're anticipating at best, we will have roughly about $75 million for the next five fiscal years for rfp for the community development piece of the of this team. without anticipating any other revenue shifts. yes, i hope, but yeah, i agree. thank you. thank you i, i see that supervisor walton is also on the roster. supervisor walton, thank you so much. chair chan, thank you for the presentation. a few questions. first is in regards to hope sf. i mean, we know this is a project worth hundreds of millions of dollars replacing housing, adding additional units. really focused on affordable housing and achieving affordable housing numbers. we've been without a director

for a few years now. how soon is that going to be addressed? thank you supervisor. fantastic question. i'm very pleased to announce that we are actively we're on the cusp of actively recruiting for that position. we're just refining the job description now. i'm really motivated and very excited to bring someone, someone on board as soon as possible. so we are expediting that work. i think it's essential that we have that leadership in place, men, in terms of resources for new home ownership and actually, achieving numbers. can we get a breakdown by race in terms of what that looks like? yes, we can follow up with that information for sure. and then i notice that you said there were mid-year reductions for the first time buyers program. and then this budget includes further, decreases for first time home buyers, supervisor walton, there are no additional reductions for first time home buyers. the $6 million reduction

in fiscal 2324 continues in each of the next two proposed budget years, but beyond that $6 million per year, there's nothing additional reduced. so but it compounds on top of each other. yes. yes, sir. so it is additional, it six plus six is 12 and 12 plus six. yes. that's correct. all right. thank you, and then do we have programs in place to identify, folks who qualify for our, our first time home buyer programs and, home ownership assistance programs. we do. excuse me. we do have we work with a number of housing counseling agencies to promote our homeownership programs and do have a number of folks who are out, getting folks oriented and, and providing the kind of technical assistance needed to bring folks into our application

process. so, yes, that's an ongoing. and those organizations will receive reductions in year two. so the homeownership programs, both the pre purchase and post purchase programs, will be put out for procurement in this fall rfp, so that all of those organizations, along with the entire portfolio would be re procured for july 1st, 2025. so, we don't necessarily think that all of the program areas would be receiving the same amount of reductions. i think that we know that we would be prioritizing certain programs such as homeownership, right to counsel, are, emergency rental assistance programs. and our, ongoing permanent rental subsidy programs, which then means we have to make some other hard choices, like, we had previously

eliminated our community building program, which is the nondirect services portions. we plan to, perhaps not be able to fund that in the upcoming year. the capital program is going to be defunded. the capacity building program, has had much of its monies reduced, and we'll have to look at our other services programs to see which of those are going to have to take that overall reduction, so i won't say that the homeownership programs would necessarily be reduced because it will not be a each program gets a prorated reduction based on the overall amount. we're going to be prioritizing those programs. and because the, pre-purchase programs obviously are the gateway into all of our bmr and d'alpe programs, it's likely that we will do our best to maintain that same existing level. when will we get a picture of priorities, we, we

anticipate that the overall rfp will be released in beginning of september, and at that time, i think we'll have a better sense of where are the where the priorities will lie. but again, the final i think decisions will be, preliminarily announced, as we usually do in february of. so yeah, february of 2025. yeah. in terms of your answer to the question, we don't know proportionally what's going to receive what amount of a cut. no, we would have to look at the proposals that we prioritize going into how we develop the rfp process. right? i mean, we will have the overall priorities, but, and you'll know the amounts that you want to put in each bucket as well. right? right. by win by win again, we will be, prepping it for the bidders conference, probably beginning of september. so that's when that's when that would be put out, then again,

we'd have to look at the proposals to make the final decisions and then, the preliminary results would be announced. we now think in february of 2025. thank you. i'm my question was just really specific about when we will know the priorities, how much money is going into each bucket, not the timeline itself. okay thanks . thank you. and supervisor melgar, okay. i have a few questions on both presentations. so to start with, mr. chu, so, the portion of cdbg that you get for this is only a portion of the total amount of cdbg that the city gets, right, our department, receives the initial allocation of cdbg, and then we,

through practice, have given a portion of the cdbg dollars to the office of economic and workforce development, i want to say maybe 1.2 million for economic development and maybe another 1.2 for workforce development. and then our department retains the rest. and who decides that the split between our department and cdd, it was to my recollection, it was based on a historical discussion. i would say back in 2008 or 2009, when the, you know, initially did not have a separate workforce development division. right. so yeah, i don't need to understand the details, but just. okay. so it was in 2000. that's a long time ago. yes. we decided yeah. right. so every five years we're required to go through this process right by hud to,

identify my priorities, so to my colleague, you know, supervisor walton's question, what is the relationship between that five year planning process that we go through? and, you know, we try to go to, neighbors all over the city and do this whole process. what's the relationship between that and the rfp that you're putting out with priorities? so the, the community engagement and the strategies connected with that, which are done in conjunction with cdd, do serve as a guide for the priorities in our overall rfp. so, yes, those is those areas which we have traditionally covered, are going to be examined in light of the feedback that we got. we did about 13 different, neighborhood meetings, along with about 40

different, focus groups, so that will be used to, to drive the overall priorities. i'm familiar with the process. i'm just bringing this up because, you know, when something happens like a pandemic that changes so many of our needs, people are being evicted. you know, the bottom falls out from real estate market in certain parts of town. and you have, you know, like sort of just are going through the motions of a system that we've had since 2009, in terms of the split with iwrg, and or to have, you know, like a process where you go and you have like 40 different neighborhoods. so like at what point do you say, hey, you know, perhaps there is a bunch of set of new needs or perhaps for the first time there is housing stock available in these neighborhoods. we should perhaps be investing in homeownership so that people, for the first time in a long time, can have access

to these opportunities or any number of things, like at what point do we kind of say, hey, perhaps you know, given that we've gone through something that is unusual, and has changed a lot of things, do we redirect our, policy priorities and, you know, fund other things instead of cut them? oh, no, i understand, i think that's a good point. we have not, reexamined the relative allocation since i would say about 2009. it's been that same percentage division, so we're happy to look at that question and talk with the leadership of cdd to see whether that, deserves a reexamination. okay. thank you, so i have a few questions for director adams, so , so, as you know, you know, at the land use transportation committee, we have approved a housing element that commits us

to the production of 82,000 units, most of them on my side of town, over the next ten years, in about half of that should be affordable, so i also know that you and, you know, folks in this room have been involved in the regional housing bond that will hopefully pass, but i'm wondering, given what, you know, benjamin took us through, if that does pass and we need more than that, we need much more than that. does your department have the capacity to sort of handle the production that will come with that? that's first, second is that, you know, most of the development because of the eastern neighborhoods plan that was passed, has been concentrated on the eastern side of town. most of our nonprofit capacity is in the east side of

town. some of the more the larger developers, like the mercys and the bridges that does, you know, development throughout the region can go everywhere but don't have that deep community connection that i would argue one needs to do development where there hasn't been development before. so i'm wondering on both, you know, counts, like in your terms of your staff capacity and in the nonprofit capacity out, you know, in the richmond in sunset in, you know, district seven, what are what are the plans for that reflected in this budget? because as it seems like if we're committing to it, we should put our money where our mouth is. thank you. supervisor. great question. i do think the if what a what a wonderful problem to have to solve to if the regional bond passes it would be, depending on the level of the bond. and i hear it's going to be a $20 billion bond that's going to go on the ballot, that would be over $2 billion of funding for san francisco to deploy across a

range of programs, and so it would be a scale shift for us in terms of channeling those funds. they wouldn't all come at one time. the region would do a series of bond issuances. so they would be calibrated over a period of time. i think, there will be a capacity challenge both within our office and within our, our larger affordable housing development community. i think we can anticipate that. but i would say a couple of things. first is, parallel with that challenge will be the challenge of leveraging limited state resources. so while the jurisdictions within the region will have this preponderance and this this abundance of funding, the state leverage sources that we go for mhp, asic, all the other acronyms that we manage, those are not receiving a commensurate increase, nor are the tax credit programs. so, i, i don't imagine our kind of traditional affordable housing

pipeline, which leverages those key state funding sources, is going to be able to double or triple, because we're just not going to have those matching sources, and it's going to be very expensive for us just to sole fund those, those types of developments. so i do think we'll be looking for opportunities outside of our traditional affordable housing pipeline acquisitions being one of them, home ownership for sure, and expansion of that. those programs, i think, will be critical for our for mobilizing and channeling these funds, but but but it it will put strain on our capacity. we, we do have some newer projects in on the west side and developers who are beginning to develop those relationships, teacher housing, senior housing in district one, we've got a groundbreaking, for 2550 irving that's coming up. and so we're, we're we're developing more of those, that capacity and those relationships

recently. and we'd want to build on those and expand on those, and you had another question. i was so long winded in responding. yeah. no that's fine. okay that was both my questions. i just, you know, given your answers, i don't i don't see how we're going to get it done. right. and it seems like your department should be like at the forefront of that planning, of, of, you know, sort of putting out how much is it going to cost, what is it going to take? because part of it is the dollars, as you said, part of it is hopefully we'll have the, you know, the problem of having all of that money and, you know, starting in november. but it's also that we need to sort of call it out and say, exactly how much is it going to take, not just in terms of subsidies, but also staff capacity, nonprofit capacity, because all of these things require a very specific technical skill set, as you know. well, you know, and we are in competition with others to get it, you know, and, you know, we could be talking about, you

know, market rate housing, affordable housing. but if we don't have the infrastructure to get it done, it's not going to get done. that's that's a great point. i mean, i, i, of all the anxieties i manage currently, this is one of the lower ones, to be honest. just because i actually do feel like we have a very strong team and we and although our capacity in our broader nonprofit community is, is stretched, we have some really strong nonprofits and a tradition of building with great technical capacity in this city. and so i think we have all of the cards on the table that we know. we know how to play like i, i think the pieces are all there. they're all going to be put to the test and with with greater resources. but i don't feel like the fundamental question is that complicated. we know how to do bmr, we know how to do acquisitions. we know how to do preservation work. we know how to do homeownership, and we can build 100% affordable. so i i'm really excited to engage in this challenge. we will be doing an expenditure plan, working with the board of supervisors.

it will be submitted. the earliest it can go in is february of 2025. so toward the end of the summer and early fall, we'll start ramping up that, expenditure planning process and that will prime us then for ultimately the deployment of those funds. thank you, director adams. thank you. thank you, supervisor preston. thank you, chair chan, i have have some questions. first off, on the right to counsel, i wanted to just get some clarification there. so thrilled to see in the budget book and have communicated to us that the, as it says that the city will continue to provide guaranteed full scope legal representation for all individuals facing unlawful detainer notices. so i want to, thank the mayor's office for that commitment. and, and most for that. i think it's extremely important at a time when i think we know we're seeing rise because of the expiration of our

eviction bans and some of the latitude we had locally to control evictions during the pandemic, which have expired, we're seeing a rise in those evictions. so i want to thank you for that commitment and for all the work we've already celebrated the program in other hearings, so no need to go over that. and thank you to, mr. chu and the team for all their work. i did want to get some clarity on the year two, of the programing. my understanding is full funding in year one in this program, as i mentioned, rising evictions. and as we covered in the hearing on this, a 92% success rate in people avoiding homelessness through this program. this is one of our best investments in the city, but but can we get confirmation that there will not be cuts to the tenant right to counsel program in year two so that our providers can fill the vacancies

and be able to really take the existing budget and maximize its impact without the uncertainty of year two. yeah, supervisor, thanks for the question. i, i guess i'll, i'll give the same response, which is, perhaps only, only partially satisfactory, that we, we do understand the importance of that program. and so we think that the right to counsel program, along with the emergency rental assistance program, the permanent rental subsidy program, the homeownership program, are going to be highly prioritized, i would like to say that for 100, none of those programs would be touched. the only reason i hesitate to say that about any program is because there is a $12 million deficit in a in an overall program that, let's say is 97, let's say 75. i think we talked about. so, you know, so

87 to 75 million and the other programs that we've not yet talked about here, include, for example, a, probably close to $10 million for specific immigrant legal defense collaboratives, which are also highly, highly prioritized, all of those programs are valuable. well, i would say that the programs that i've listed today are at the top of the list. but i just wouldn't want to say that it's 100% that no dollars would be touched because it is such a significant amount, i appreciate supervisor melgar's suggestion. and so, you know, if we are able to make some of those shifts, we may have access to some dollars that will offset some of that, but those are some of the trade offs we're saying. but i would say that we're going to be doing our best to minimize those cuts to those programs. okay. and i'm not looking to preempt your process. and obviously colleagues have asked about that prioritization process. but is

it safe to say no intention to cut that program? maybe that's a more comfortable place that you could be understanding. obviously, there's pending grant decisions and so forth, and you have a process you're going through. i just you know, we have some things that come before, chair chan's committee where it's a clear intent to either reduce phase out and, and, and my sense from the conversations with the budget office, with is that that the right to counsel program is not one of those. yes. i would say that it's a fair statement to say that there is no intent to reduce the amount for right to counsel the pre-purchase programs, rental assistance or the rental subsidy programs. yes. thank you, on the rental assistance while you're at the mic, the current balance of the rental assistance funds, the anticipated amounts that we have for 24, 25 is, is, primarily the work order that we have from

hsh, which i think came in at about 12.16 million, and then we're spending down, the rest of the enhancement and the, the, the 30 million and the 10 million. so by the end of june, you know, our best estimate is that we may have about about, let's say, about 3 million that we intend to roll over so that 3 million plus the $12 million work order that we've already received from hsh. thank you. and that's and the 12 million you're referring to going forward, that's that's we're into exclusively oko funding for the that's explicitly for erap. yes. that's thank you. appreciate that, on on, on on a positive note, this is not a question, but i do want to say it's great to see a new revenue source in the vacancy tax. so thank you, colleagues who were on board for the vacancy tax. and to voters because it's, you know, in a in a very difficult

budget environment, it's good to see that $20 million estimate. and may we all hope that the lawsuit against it is unsuccessful so that we can rely on those funds funding, rental subsidies for seniors and funding acquisition of empty homes. and with the uncertainty, i think we know that in some ways, if that tax is successful, we won't be collecting that much because all these empty homes will be filled. so you win either way with with prop-m, but but i did want on a on that's on the positive note, i do want to ask you and i, i can't tell you how much i hope i, in the future, do not have to come each year to budget committee for this conversation. but we are here and it is, that time of year where we talk about proposition an i and the revenues, i will say this year i sent my annual prop i letter to the mayor, to mo, cdd director, and to many others, and did not

receive a reply. so here i am, prop i 2020 ballot measure tax on $10 million sales of property on the ultra wealthy. unanimous board resolution and intention to use those funds in the first two years. split 50% between rent relief and, affordable housing, and then supposed to be in perpetuity, going to affordable housing. so, that tax is raised over $300 million. i'm very proud of the work this board has done to each year when $0 are allocated in the mayor's budget to have these conversations, do the various appropriations and negotiations, we need to try to claw back those funds. i look forward to the day where we all join hands and simply use affordable housing money for affordable housing, and do not have to go through this dance. but i, i want to say, when director adams

is talking about the limits on some of our challenges on available state tax credits. in answer to supervisor melgar's questions about like, how are we achieving these goals? it's just, very hard to think about those restrictions. and then the ongoing reluctance to even engage in a conversation around using prop i revenue. and i want to note that our housing element, that supervisor melgar reference, is an explicit reference to utilizing new revenue streams that says, quote and this is unanimous. mayor board of supervisors all have agreed to this. the city should utilize the two new sources of, of funding gross receipts tax and real estate transfer tax to partially meet our funding gap, and consider new funding sources such as new affordable housing bonds and other sources to meet the gap. so it's like we've all agreed we've i don't know how much more we can do. unanimous resolution housing element, to use these funds from the real

estate transfer tax, that tax as many have noted, is volatile. right. so some years we have, you know, a huge 180 some odd million dollars. other years it's lower, this year, the estimate and the recommendations from the housing stability fund oversight board, were were based on a lower number. we've gotten a new update from the comptroller of $57.1 million of prop i revenue projected for the upcoming year, 71.3 million for the second year of the budget cycle after baseline. obviously, about 20% of those funds, get used for transit parks, open space and so forth. but what's left is $45.7 million after baselining in year one, $57 million in base after baselining for year two. so let me just start, since i didn't get a response to this, and i brought this up when i met with mayor's budget office. and mayor's office representatives over a week ago, i want to leave open the possibility that i'm missing

something each year, i want to start from a place of assuming the best. so is there anything you would point to in terms of expenditures on the various things? rec recommended by the housing stability oversight board for this year? their recommended expenditures for prop i presented to the board and the mayor's office. are there any things we're missing that whether or not it says in there prop i is consistent with those recommendations that you would want to note in the budget. so again, i was i was hoping to do this outside these chambers. but but here we are. so maybe through the chair to either director adams or or miss duncan. thank you. supervisor while i appreciate the that this prop ii conversation has been going on for some years, i will admit that i am new to the prop ii conversation, so i, i, i, i don't believe there's anything

missing, to your to answer your specific question, so i'll, i'll just respond in that in that manner and just to give as an opportunity since we discussed it and i know you were going to go back and look and see supervisor perez, if you wouldn't mind repeating or clarifying the question you're asking, if any of the priorities for programmatic expenditures that, are recommended in your letter are funded in most city. is that the question? correct. these are the these are the recommendations of the housing stability fund oversight board that we receive annually that recommend and in this case, funds for site acquisition, funds for development costs for new social housing funds for acquisition and rehab at risk rental housing and operating subsidies for seniors. this is not to supplant other funds. these are intended to be new investments from the prop i revenue. is that in there somewhere? i want to leave open the possibility that there are some things already funded, as opposed to things that need to

be just questions for the board to act on. so, sorry to put you on the spot, dan, but i'd refer you back to mchd to talk about the things that are funded, either in what we call the aau budget or the budget that most cdd appropriates throughout the year through multiple sources to advance affordable housing priorities. some of which are in that letter, i believe there there is funding to do some of those things. is there net new funding that is tagged to prop i in this budget? i'm not asking about tagged to prop i. we know there's nothing tagged to prop i. we know the position of the mayor's office is because even though everyone has agreed these are affordable housing funds because they're literally not a appropriated into a fund that says prop i, that the mayor is free to do with those funds what she wants. i understand that legal position regardless of that, i'm leaving open the possibility that there is some net new investment that is

consistent with these recommendations. however, it is labeled a new fund for site acquisitions that didn't exist before, but based upon these recommendations has now been created or something of that nature. i mean, so i've sent this by letter. you have the recommendations. and again, if the answer is no, that's fine. i'm just want to leave open the possibility that you're funding this by a different name. thank you for that clarification. the in terms of net new funds, per our conversation earlier, the real net new funds that we are going to look forward to is the regional bond and so that would have, a, a an abundance of resources to fund a number of priorities, including the ones that are listed in your letter. i should, i should say that, you know, we do have an ongoing senior operating subsidy program, and we've been able to access state resources to support those that program, those are not net new within a kind of the context of your question, the acquisitions, i you know, i've done a lot of

acquisition work over the years. i would love to do more more. and we were very successful in acquiring new sites across the city in our last nofa do we have net new funds as part of this budget cycle to dedicate to that activity? no, we do not. okay thank you for that clarification. and yes, we are very pleased that although delayed that nofa occurred and that occurred because we went through this exact same process and the board and thank you, former chair ronen and chair chan for helping to negotiate that kind of agreement. i just want to say the amount of time and energy spent on these creative ways to get these funds, that we should be united to, to spend these revenues on their their intended purpose. and it's disappointing yet again , that we have another budget presented to this board that now we're we are have confirmation that none of it is spent on the

recommendations of prop i unless the board figures out a way to fund those things. and i will just say we have lots of opportunities in all of our districts for things like acquisition of sites to develop affordable housing, small sites, acquisitions that i know. chair chan has been leading on. and just wanted to before before turning it back over to the committee, i do want to ask you on the small sites, just what the, current balances for small sites, acquisitions. supervisor preston, so last year at this time, we talked about small sites, balances and, and what we've done and what you'll see. i believe in the blass report

when it's issued, i guess at the beginning of next week, they, they will include a specific table that shows all of the projects that we talked about last year at this time, all the small sites, projects, as well as some additional ones that we have been able to fund and all of the various small sites, funding sources and balances. so how we're funding each of those projects, but at the end of fiscal 24, 25, we are currently projecting that we would carry over into the next fiscal year $5 million, that sorry, at the end of 23, 24. sorry, at the end of so we have a list of known projects that we know are going forward in this in the next few months and or sorry, in the next few weeks before the end of this fiscal year. and then we have a list of projects that we already know that we're planning to fund in 24, 25. and so once we

account for all of those known projects we're anticipating at the end of next fiscal year, carrying forward a balance of about $5.3 million, and that will depend a little bit based on, fluctuations, we have some contingency built in because the numbers sometimes change up until the last week or so before the transaction. but but that's that's what we would carry forward into the next fiscal year. and then in 25, 26, as far as new revenue sources that we would have for small sites, we always include a portion of the housing trust fund for small sites, when we receive any inclusionary housing impact fees , a certain percentage of that is set aside to small sites, whether a certain percentage of jobs, housing linkage fees and central soma, and then, any, any

impact fees in eastern neighborhoods. but beyond that, those would only be the new fund sources other than a regional bond. those would be the new fund sources. in addition to the 5 million in the second year of the budget and prop a revenue as well. sorry, which prop a the most recent, so the we're anticipating that the 2024 geo bond for affordable housing, proposition a we're anticipating and projecting we have projects that will use up the $30 million that is allocated from that bond, in fiscal 24, 25. so that's include that will be included in the in the bla report those details. but so that's those are committed funds. that's correct okay. i, i want to just i want to just note and give the context when we're here having this discussion in,

in the budget committee last year when the board had previouslypp llion and then another 10 million, 74 million into this fund, and we had over $100 million of outstanding requests for small sites, deals that at that time in the budget for these and the funding for that was reduced by $20 million by the mayor. and at that time, the presentation in budget committee was that there was $40 million, that that it was okay, and we didn't need to worry about because there was $40 million plus anticipated future, bond revenue, a mere three months after that, when in my district, there was an 18 unit building, almost all african american and african immigrant tenants being purchased, about to be purchased by a literally. i'm not making this up by a convicted arsonist,

a landlord who had literally burnt his tenants out of a place in the east bay, and we raised this with former director. we were told at that time, october last year, just a couple months after hearing there was $40 million. we didn't need to worry about the $20 million cut that there were no funds for. literally a $3 million acquisition of 18 units of housing that could have been preserved through that program, and then we were told at that time that maybe these kind of acquisitions could be done if the next bond passed. so i will just say, i think it was a big mistake to cut these funds last year. and we are desperately in need of transparency on how the decisions are made. i will say that my understanding is on that one 800 divisadero that the person who bought it. fortunately, we have not had a fire there and understand he's looking to speculate and maybe flip it again. so maybe we'll have a second bite at that apple this time, i'm sure, for 5 or $6

million. but, but regardless of that, i just want to say really looking forward to the, the bla presentation and supervisor chan chair chan, your your advocacy around trying to have more clarity and transparency on this strategy. i think we all agree is an essential part of the mix on affordable housing and the cut last year, and the lack of transparency on how projects are selected has really been devastating. we're missing really great opportunities like this. 800 divisadero and looking forward to ramping up that strategy as part of meeting our housing element goals. thank you very much for the time, chair chan. thank you, supervisor preston. so i think, just kind of add to that. so last year when you come when you came before us, you know, it was roughly around about $64 million that set aside really, or dedicated to small sites, program. and at that time was identified that roughly, it's not really a reduction to the

small sites program, but really the overall to your, spending. and by 20 million and at that time, though, there was a commitment which i think, you know, mr. murkowski, you you spouted out for us and say, here's roughly about $42 million different, different funding sources that could be dedicated to small sites, which then i think from during our briefing, and, and i think that's what you articulated here is so for the fiscal year 2425, with that, roughly $42 million, you have new projects that now have encumbered which remaining balance about roughly $5 million for 24, 25. can you tell me? and maybe i missed this part. can you tell me what is the then allocation for small sites specifically for 25, 26? supervisor chan, there's, for

25, 26. we're currently projecting about $5 million from a variety of funding sources that would carry over into 25, 26, and then as far as new funding sources, approximately $3 million from housing trust fund, and then assumed it all goes as planned. the any additional revenue would need to come from impact fees, whether that's inclusionary housing, jobs, housing linkage, eastern neighborhoods. so those would be the only new funds that we would anticipate in 25, 26. so what you're saying is i don't want to use the word zeroing it out, but basically is there's really no no dedicated additional funding that currently allocates for the year of 25, 26, not beyond what i just mentioned as a balance of the 5 million. and the only thing that appears in the budget

is the housing trust fund portion, and the other is impact fees. thank you. and then out of which though, because you just mentioned about like, you know, i think that there is roughly about 30 million if, if i maybe i am inaccurate. so please correct me if i'm wrong for the proposition a that we just did. the voter just passed this march of 24 and which is 360 million, out of which how much was it for preservation? 30 million. 30 million. and but then this 30 million is not going to small sites when we talk about preservation. so that 30 million from the march ballot measure is currently allocated to three different supporting three different small sites projects in fiscal 2425. so we've already identified those projects and penciled in anticipated amounts to spend almost the entire $30 million, and that $30 million is on top of the 42. that's

correct, so roughly, for the fiscal year 2025, we're investing $42 million plus $30 million, mostly encumbered. and then with that, we're leaving a $5 million of, balance and i'd help me understand this, too, though, because it's a mix, really, of general fund, which is housing, housing stability fund, eraf as well as bonds and others. and so which means that it's really a mix of general fund as well as other capital type of bond dollars is. what you're saying, though, is that they all went to small sites acquisition and none of which that actually went to any type of operation or rental subsidies, because rental subsidies will be a separate category. that's correct. so in your example, as you were kind of building up the math for fiscal 24, 25, we are anticipating spending approximately $72 million on

small sites, acquisition and rehab only, not not operating subsidies. or what is the plan for potentially need once you acquire these small sites, what is the plan to sort of sustain knowing that potentially probably a good portion of them will require operation and rental subsidies? as i'm going to let director adams answer that. thank you for that question, chair chan, in general, the way we manage our acquisition program, the small site program is to identify properties, that obviously are critical to sustain affordability in neighborhoods, and we underwrite them with enough capital subsidy to cover rehab, lower the amount of debt that would be needed to support that acquisition and any rehab, and then structure the financing such that the rents themselves are sufficient to stabilize the

property. so they, the program design is really intended to provide the upfront subsidy needed, reduce the debt requirements and allow for below market rents to sustain the operations. so that's the that is the design of the program. it's intended not to necessitate an ongoing operating subsidy. and how long do we intend to do that? typically for per project like ten years, 30 years, five years like that actually can sustain itself with the subsidies, well, if i'm understanding your question correctly, the intention is that those buildings are set up to be successful, fiscally solvent for the long term. so we also include reserve deposits in our operating budget. so the property should be dedicating a portion of its revenue to support reserves so that when those capital expenditures are needed over time, there are reserves to take care of those. a new roof, the boiler goes out, those kinds of, capital needs

that will come up periodically should be able to be covered through the reserves of the property itself. what happened in the events that those maintenance which is, as we know, regrettably and unfortunately time and time again, and we see in the last few years that, you know, construction costs and supplies and everything has really gone up and easily increased by 30% or more. what do we do then generally, i mean, and, you know, we always want to do more than, than we can do, but we issue a nofa a notice of funding availability for existing nonprofit owned housing. and so we've i am approving a loan next week for that kind of capital expenditure, so that we generally see those in our broader affordable housing portfolio. you know, it includes a lot of older buildings that have been in our portfolio for many years. that need recapitalization, the tax credit program in years past was a major source for those

recapitalization funds. those funds have gotten much more competitive over the years. so there is a reliance on local dollars to address those capital repairs when they come up. and we do it through a nofa process. and then when you say local dollars, you really mean general fund because bond dollars cannot accommodate that bond dollars, i believe i believe you're correct. so those would generally be either cdbg. so federal dollars could be used for repair work, our housing trust fund can be used for that. and i believe i believe, yes. correct. those two sources i think those are the challenges that i am trying to understand and that as we continue to acquire for these small sites, which is a good thing, i'm glad to see a dedicated $30 million. and on top of that, 42, in this one fiscal year, i, i am wary about the balance between acquiring