>> chair fewer: good morning, e. the meeting will come to order. this is the december 9th, 2020 rescheduled budget and finance committee meeting. i'm sandra lee fewer, chair of the budget and finance committee. i'm joined by supervisors shamann walton and rafael mandelman. our clerk is miss linda wong. i'd like to thank sfgov tv for broadcasting this meeting. madam clerk, do we have any announcements? >> clerk: yes, madam chair. the board of supervisors, legislative chamber and committee room are closed. however, members will be participating in the meeting remotely. committee members will attend the meeting through video

conferencing and participate in the meeting to the same extent as if physically present. public comment will be available on each item on this agenda. both channel 26 and sfgovtv.org are streaming the number across the screen. each speaker will be allowed two minutes to speak. comments are opportunity to speak during public comment period are available via phone call by calling (415)655-0001. again, meeting i.d. 146 414 8528. again 146 414 8528. then press pound twice. when permitted, you'll hear the meeting discussion, but you will be muted. when your item of interest comes up, dial star 3 to be added to the speaker line. best practices are to call from a quiet location, speak clearly and slowly and turn down your television or radio. alternatively, you may submit public comment in either of the following way, to myself, the

budget and finance committee clerk. if you submit public comment via email, it will be forwarded to the supervisors and will be included as part of the official file. spanish and chinese interpretations are those who need translation services. on items 18, 19 and 20 under the 2:30 p.m. special order. finally, items acted upon today are expected to appear on the board of supervisors' agenda of december 15th, unless otherwise stated. >> chair fewer: thank you very much, madam clerk. can you please call item number 1. >> clerk: yes. item number 1, resolution rerow actively approving the first to the second amended restated operating agreement between the city and county of san francisco, establishing the terms and conditions for scheduling of the city's electrical transmission for a term of ten years, beginning on march 2nd, 2018, and ending ten years after the effective

date of the resolution. not to exceed the amount of $100,000. members of the public comment who wish to provide public comment should call (415)655-0001, meeting i.d. 146 414 8528. and press pound twice. if you have not already done so, please dial star 3 to line up to speak. a system prompt will indicate you have raised your hand. >> chair fewer: thank you very much, madam clerk. today we have with us mark from the p.u.c. margaret, the floor is yours. >> thank you. googood morning, chair fewer, supervisor mandelman and supervisor walton. i'm the division manager of hetch hetchy water. the sf3uccertain is is requesting approval of a resolution, retroactively approving a first amendment to the second amended and receded operating agreement between the city and county of san francisco and the california independent

system operator or ciso. the term of the amendment would begin on march 2nd, 2018 and end ten years after the effective date of this resolution. not to exceed amount of $100,000. a little bit about the agreement. ciso manages the grid in california, subject to the federal energy regulatory commission. the city uses the grid to buy and sell electricity, so we must have arrangements with ciso to government the connection, transaction, on the transmission grid. the operating agreement, with the ciso is one of those. i know that we are requesting retroactive approval on this agreement. i want to give you a little background on that.

the agreement expired in 2018. the agreement was approved and continues to remain in place until there's a request to terminate the agreement. i agree that this is still not acceptable. and for some reason we missed md this agreement and hetch hetchy water maintains the list of agreements and termination dates. and we have updated -- for some reason this was not on there. we have updated the list to include this agreement. the city will not incur any costs under the amended second, unless the city requests that ciso provide services to the agreement allowed to the city to procure from the ciso, consisting of assisting the city to transition to a different balancing authority. stpuc says the transition services during the ten-year term will not exceed $100,000.

the sfpuc respectfully requests the second amended and restated operating agreement, that the california system operator to begin on march 2nd, 2018, and extend for ten years from the effective date of the resolution. the sfpuc has shared the clerk and the committee members -- the non-substantive amendments. would you like me to read through the amendments? >> chair fewer: yes, please. >> in 2008, the board of supervisors or board approved ordinance number 31-08, a settlement of proceedings initial created by the california independent system operator at the federal energy regulatory commission against the city and county of san francisco to establish the terms and conditions for the scheduling of the city's

electrical transmission facilities, that interconnect with the balancing authority of northern california and the turloc balancing authority. in addition to approving the settlement, the board authorized the general manager of the sfpuc to enter into the operating agreement between the city and the ciso. the first operating agreement expired on july 1st, 2015. the first operating agreement established the terms and conditions for the scheduling of the city's electrical transmission, that interconnect with the balancing authority of northern california and the turlock irrigation district balancing authority areas. and after the first operating agreement expired, the city and the ciso enter into a second amended and restated operating

agreement. the second operating agreement has an effective date of july 1, 2015, and expired on march 1s march 1st, 2018. the board was not asked to approve the second amended operating agreement, because the extended term of the agreement did not exceed ten years. the parties have continued to operate under the second operating agreement since march 1st, 2018, because ciso did not file request with ferk to terminate it. the city and the ciso have negotiated a first amendment to the second amended and restated operating agreement, which is on file with the clerk and the board of supervisors in file number 200969. in addition to extending the term of the second operating agreement for ten years, on the effective date of the

resolution. the amended operating agreement allows the city to continue, one, be compensated for energy put into the grid that is used by other utilities. two, coordinated outages with the ciso. three, specify real-time operating limits for certain of its connections. the term of the agreement amendment would begin on march 2nd, 2018, and ten years after the effective date of this resolution, not to exceed amount of $100,000. that is the end of my presentation. thank you. do you have any questions for me? >> chair fewer: let me ask. colleagues, any comments or questions from ms. hanford. seeing none, let's open this up for public comment, please. >> clerk: yes, madam clerk. operation is checking to see if there are any callers in the queue. operations, please let us know if > callers are ready. for those already on hold, please continue to wait until

the system indicates you have been unmuted. mr. coup, are there any callers who wish to comment on item number 1. >> madam clerk, we have no callers in the queue. >> chair fewer: thank you very much. public comment on item number 1 closed. i'd like to make a motion to move this to the board with a positive recommendation. could i have auto roll call, vote. >> clerk: would i like to accept the amendment presented by the p.u.c.? >> chair fewer: yes, please. i'd like to make a motion to accept the amendments. >> clerk: yes. on the motion, supervisor walton. >> supervisor walton: aye. >> clerk: supervisor mandelman. >> supervisor mandelman: aye. >> clerk: chair fewer. >> chair fewer: aye. >> clerk: there are three ayes. >> chair fewer: yes. i'd like to move this to the board with a positive recommendation. >> clerk: absolutely. >> chair fewer: as amended. >> clerk: on the motion, supervisor walton. >> supervisor walton: aye. >> clerk: supervisor mandelman. >> supervisor mandelman: aye. >> clerk: chair fewer. >> chair fewer: aye. >> clerk: there are three ayes. >> chair fewer: thank you very

much. can you please read item 2 and 3 together. >> clerk: item number 2, a. >> commissioner ronen: retroactively executing an amendment to an agreement with calpine energy services so increase the cost by $27 million for a total of $30.2 million and extend the term by seven years for a term ending december 31st, 2029, approving an amendment to an agreement with calpine for renewable energy to increase the cost by $193.2 million for a total of $242.9 million and to extend the term by sevenning for a term ending december 31st, to 29 pop for a total of $220.2 million, not to exceed in purchases and approving an agreement with calpine energy services l.p. for electricity-related products for $59.4 million with a term of january 1st, 2024.

item number 3. for a total of not to exceed $1.2 million for a one-year term of january 1st, 2020, through december 31 of the, 2021, under an agreement requiring binding arbitration. members of the public comment who wish to provide public comment should call (415)655-0001. a system prompt will indicate you have raised your hand. please wait until the system indicates you have been unmuted and you may begin your comments. >> chair fewer: thank you, madam clerk. today we have michael himes with us, who is going to present on thames 2 -- items 2 and 3. the floor is yours. >> thank you, chair fewer. good morning, supervisor fewer, mandelman and walton. thank you for having me today. i do have a few slides to

accompany a short presentation for you on these items. and i'm going to bring that up. are you able to see the presentation? >> chair fewer: yes, we are. >> then i'll move to slide show format. okay. >> chair fewer: perfect. >> okay. great. thank you. so good morning again. my name is michael himes. i'm the director of the cleanpowersf program for the power enterprise. you have before you a resolution to approve a package of cleanpowersf contracts, with calpine energy services. for renewable energy and resource adequacy capacity. as a reminder, cleanpowersf is

san francisco's community choice energy program, authorized by assembly bill 117, adopted by the board of supervisors and the mayor and operated by the sfpuc. they've been serving since may 2016 with affordable, renewable and clean sources of electricity. today in total here, with item number 2, there are three contracts of calpine energy services that we're bringing to you for approval. first, we're seeking retroactive approval of an amendment to an existing contract to provide resource adequacy capacity from the geyser's geothermal power plant, located in sonoma county. i want to say immediately that the p.u.c. does not take retroactive approval from the board lightly. we try to only do this if there is an immediate or serious business need for the city, such as regulatory compliance, which expect be met on the standard approval process timeline.

we will continue to be diligent about ensuring that our contracts follow that timeline, and to limit the retroactive approvals, only to actions that are designed to protect the city from financial or reputational harm, if action is not taken immediately. as i mentioned a moment ago, the first contract is a retroactive approval of an amendment to an existing contract for -- [indiscernible] capacity. resource advocacy is a regulatory requirement, applicable to all entities that provide retail electric service to customers, including cleanpowersf. the requirement is intended to ensure that there are enough power plants available to meet peak levels of customer demand on the california grid. the purchase of resource adequacy capacity is not a purchase of energy from the plant. it's a commitment by the plant to standby for the grids to help keep the lights on. this amendment extends the term of the existing agreement, from

calpine's geothermal facility seven years to december 31st, 2029. the agreement also increases the capacity to be purchased by cleanpowersf by 25 megawatts for a total of 50 megawatts starting in january 2022. the amended contract costs will be $3.6 million per year for a total not to exceed amount of $30,240,000 over the new contract term. the contract is the result of a bid submitted by calpine in response to a competitive solicitation, conducted to support cleanpowersf's resource adequacy coronavirus effort -- compliance efforts. to support cleanpowersf's resource adequacy compliance filing, due to the california public utilities commission on november 2nd. the second calpine contract

before you is a companion amendment to the existing agreement to purchase the renewable energy produced by the geysers. i do want to be clear this one is not retroactive. only the first one was. like the renewable -- like the resource adequacy contract amendment, this amendment would extend the term of the existing agreement seven years to the end of 2029. the amendment will also increase the amount of base load renewable energy to be purchased from the geysers. a bay area local renewable energy facility from 25 megawatts to 50 megawatts. the renewable energy provided would be supplied to cleanpowersf 4 hours per day, seven days a week and will help cleanpowersf achieve a 100% renewable energy supply. the proposed contract will cost approximately $25.8 million per year. for a total not to exceed amount of approximately $243 million

for the full term. the amendment also extends and increases the community benefits commitment, that calpine made in the original contract, which is managed by our very capable p.u.c. community benefits team. under the new agreement, calpine will be making financial contributions directly to the hunter's point family foundation, to support stem education for the girls' 2,000 program each year for seven years from 2017 to 2025. so the amendment extends that commitment from 2022 to 2025. the girls' 2,000 program provides girls ages 8-16 with mentorship, financial support, and leadership opportunities. the stem education for girls 2,000 will focus on the impact of climate change, on communities like hunter's point, and actions that youth and their families can take to combat

climate change. under the existing agreement, calpine brought a group to the geyser's geothermal facility to show them an example of how renewable energy is produced. we hope that programs like this will spark an interest in utility service and clean energy. finally, we're seeking your approval of a new contract to purchase additional resource adequacy capacity from other calpine facilities, located in california. the term of the proposed contract is six years, from 2024 through 2029. the purchase under the contract of 150 megawatts of system and flexible resource adequacy capacity will support cleanpowersf's compliance with state regulatory requirements. the total not to exceed amount is $59,400,000 or about $9.9 million per year. the contract will help cleanpowersf maintain regulatory compliance in the future. it will also help cleanpowersf

reduce its risk and exposure to the volatile market prices and uncertain resource adequacy supply availability, that we have observed in the power market over the past couple of years. in closing for item number 2, in addition to helping cleanpowersf secure a reliable source of renewable energy and meet state regulatory requirements, these three contracts before you are projected to reduce cleanpowersf's supply costs by approximately $27 million over the fiscal year '22 to '29 timeframe. that's relative to cleanpowersf's ten-year financial plan. as a result, these contracts will help cleanpowersf continue to deliver clean, reliable power, that is also competitively and affordably priced for the rate payers. okay. i'm now going to shift to item number 3.

and for item number 3, we are also seeking your retroactive approval of a contract for cleanpowersf to sell resource adequacy products to southern california edison company, in an amount not to exceed approximately $1.3 million. as part of our effort to achieve compliance with state regulatory requirements, on september 23rd, cleanpowersf submitted bids into southern california edison company's solicitation to purchase system, local and flexible resource adequacy products and to sell system resource adequacy capacity for the years 2021 and 2022. the purchase and sell bid as we committed, into the solicitation, were designed to help cleanpowersf balance its resource adequacy supply by acquiring product types it needed for compliance, and then

selling product types it did not need. a portion of the cleanpowersf's buy sell bids were accepted by southern california edison. southern california required the sfpuc to execute a contract no later than october 28th, to ensure timely filing of resource adequacy compliance reports which as i mentioned a moment ago, were due on november 2nd. cleanpowersf executed the contract on october 27th. executing the sale prior to november 2nd, the november 2nd compliance deadline, enabled cleanpowersf to receive the highest price for the sale of the excess r.a. products, thereby maximizing the benefit to cleanpowersf rate payers. the revenue received by cleanpowersf for the sale will help offset the cost of resource adequacy purchases cleanpowersf made from southern california edison under the contract. and with that i'm happy to take any questions you may have.

>> chair fewer: thank you very much. colleagues, any comments or questions for mr. hyaams? if not, i'm going to hear from the b.l.a. on items number 2 and 3. >> good morning, chair fewer, members of the committee. item number 2 approves three contracts, amendments to two existing contracts and a new contract between cleanpowersf and calpine energy for resource adequacy through 2029. mr. hyams summarized the contracts and we also talked about it in our report. and on page 4 of our report, you'll see actual expenditures under the terms of these contracts. the expenditures would increase from $14.2 million in 2021 to $39.3 million in 2029. funding for these contracts would come from cleanpowersf

revenues and in accordance with mr. hyams said, these are assumed within the cleanpower ten-year financial plan. i did want to point out the resolution, as we originally saw, for $289.6 million. my understanding -- my understanding is that an amended resolution was submitted to this committee for that agreement, that would be $24.9 million, which is consistent with the table in our report. item number 3, as mr. hyams pointed out, by cleanpowersf to southern california edison. we do have an amendment to file number 2 regarding the second calpine agreement to reduce the not to exceed amount by $600,000 from the amount in the amended resolution of $242.9 million to $242.4 million.

and we recommend approval of both of item 2, as amended, as of item 3 and available for questions. >> chair fewer: thank you very much. colleagues, any comments or questions for the b.l.a. or mr. hyams? yes, supervisor mandelman. >> supervisor mandelman: yeah. thank you, madam chair. yesterday at the board, supervisor mar announced he sent a letter to the p.u.c. asking for more information about the community benefits program and how that works. and i'm wondering if mr. hyams can talk a little bit generally and in the case of the specific the contracts before us, how the community benefits being provided factored into the selection of the contractor and how the benefiting organizations would have been selected to receive benefits and a how that all works. >> yeah.

let me address this preliminarily. i'm joined today by tracy zoo, our community benefits manager at the p.u.c. i'll just speak specifically to this particular contract and the original solicitation. when we've issued renewable energy solicitations in the past, and the calpine contract, the initial calpine contract, which was executed pursuant to the solicitations, we have invited bidders for renewable energy projects to include voluntarily a community benefits proposal, for which they do receive points in the scoring process. the proposers do -- they submit a proposal that is independently scored and includes their proposed partners in that process.

is tracy available and online? i wanted to hand it off to her to elaborate on any of those points. >> >> chair fewer: i'd like to interject. it's my understanding that the community benefits program does not direct benefits through any organization in particular, that it is a proposal that the people who come -- who go into contract with actually they choose an organization or look at an organization that they would like to donate to or direct benefits towards. but i'm going to allow tracy to actually answer. ms. zoo. >> thank you, supervisor fewer. thank you for the question, supervisor mandelman. that is correct, supervisor mandelman, that the firm decides the nonprofit partners they decide to work with. as part of this amendment, the firms -- calpine has decided to continue working with hunter's point family, who they've been

working with as part of the original contract. it's also of note that we currently don't have a policy in which firms, who get amendments to their contract, are required to continue their community benefits. in this case, calpine approached us and voluntarily agreed to continue -- continue providing benefits to community organizations like hunter's point family, as part of this amendment. so it was completely of calpine's discretion to voluntarily agree to continue those commitments, as well as they were the ones who chose that organization. >> supervisor mandelman: okay. >> chair fewer: supervisor, is that fine? okay. seeing no other comments or questions from my colleagues, i have been briefed on this -- these items extensively. i don't have any more questions. let's open this up for public comment, please. madam clerk, items 2 and 3. thank you.

>> clerk: yes, madam clerk. operations, please let us know if there are callers that are ready. if you have not already done so, please press star 3 t to be addd to the queue. for those on hold, continue to wait until the system indicated you have been unmuted. mr. coup, are there any callers that want to comment on items 2 and 3. >> yes, we have one caller in the queue. >> chair fewer: okay. let's hear from the caller, please. >> caller: so, supervisors -- supervisors, i want you to pay careful attention to this letter. so we had the same situation before the commission. and harlan kelly - and tracy. and what is happening here,

sfpuc does not care to represent property. if you want to go ahead, choose somebody that -- to do this program, it's on you. if you ordered that nonprofit and you audit sfpuc, and how they have conducted themselves with the community benefits, it doesn't matter if you brought this to the board of supervisors. the board of supervisors really haven't represented the corruption. the corruption has reached its -- because the federal bureau of investigation came in. we're talking about calpine energy services and you're telling the public that, you

know, they have the prerogative of choosing whoever they want to. is this how we do business? we have many organizations in san francisco that provide amenities to our youth and children. but it has to be done in the right way. and who do you think payings attention to this -- the virtual meetings that you have. very few. i just turned on the tv and i said, wow, what is happening over here. right now the most corrupt department in san francisco is sfpuc. and tracy and -- i don't know who is going to take that place, they're all on notice. to do the right thing.

so i don't know if calpine knows anything about what is happening. >> your time has concluded. >> clerk: thank you for your comments. mr. coup, are there any other speakers? >> chair, that completes the queue. >> chair fewer: thank you very much. so, colleagues, i think that before us we also have an amendment that the b.l.a. has proposed, is that correct, madam clerk. let's take the amendment first. i'd like to move a positive recommendation for the amendment, please, to approve the amendment. >> clerk: yes. on the motion to approve the amendment, proposed by the b.l.a. on item number 2, supervisor walton. >> supervisor walton: aye. >> clerk: supervisor mandelman. >> supervisor mandelman: aye. >> clerk: chair fewer. >> chair fewer: aye. >> clerk: there are three ayes. >> chair fewer: thank you very much. and i'd like to maying a motion to move items 2 and 3 to the board, with a positive recommendation as amended.

>> clerk: supervisor walton. >> supervisor walton: aye. >> clerk: supervisor mandelman. >> supervisor mandelman: aye. >> clerk: chair fewer. >> chair fewer: aye. >> clerk: there are three ayes. >> chair fewer: thank you. please call items 4 and 5 together. [reading agenda items 4 and 5]

>> clerk: members of the public who wish to comment should call (415)655-0001. meeting i.d. 146 414 8528. then press pound twice. if you have not already done so, please dial star 3 to line up to speak. a system prompt will indicate you have raised your hand. please wait until the system indicates you have been unmuted and may begin your comments. >> chair fewer: thank you very much. we have with us claudia gorham from the real estate department. hi, claudia. the floor is yours. >> good morning, chair fewer, supervisors. we do have a powerpoint presentation, that was prepared. there we go. the resolutions before you regard two existing city and tenant leases, for permanent supportive housing. each are ten-year lease option to extend. one at the windsor hotel, 104

single-room occupancy units, located at 234238 eddy street. and the other for the, the le nain s.f. with 92s.r.o. units located at 730 eddy. commencing january 1st and february 1st, 2021, respectively. both hotels provide supportive s.r.o. housing for formerly homeless residents, with complex medical, mental health, and/or substance-use diagnosis. and the windsor additionally offers a clinic. we can go to slide 2. this is the first of two options both leases provide. and the options are on the same terms and continues except rent. if we could go to slide 3. both leases provide a new

monthly base represent, which is based upon the greater higher of the fair-market rent and there's a very complex definition of fair-market rent used here, involved using the government resident index and mohcd keeps that and publishes. so the greater of the fair-market rent or about 103% of the current monthly rent. the real estate transaction agent on this particular lease has negotiated with both property owners and we were able to negotiate using a single-room occupancy, under the government rent index, rather than the higher efficiency unit rent allowance. basically lowering the monthly base rent approximately 25% to come to the numbers presented to

you, which is for the windsor, $84,492 a month. and for the le nain $74,000.743. thereafter the rent for the windsor will be annually adjusted for nine years, between 3% and 6%, based upon the then current consumers' price index. and between 3.5% and 6% for le nain. there is an amendment that needs to be made on 234-239 eddy street, that can be the end of the preparation. that the b.l.a. pointed out on page 1, line 20 of the resolution to change the units dated from 92 to 104. dylan schneider from h.s.h. is here to answer any programming

questions. i can certainly answer any transaction questions you may have. and we ask for your support and approval. thank you. >> chair fewer: thanks. any comments or questions from my colleagues? i have a question. how long have we then be using these two pieces of property for supportive housing? >> i believe windsor has been since 1999. i didn't see the exact date, but similarly since they were both created basically about the -- drafted at the same time and went before the board at the same time back then. so i'm going to assume that le nain is about the same. >> so have we ever thought about buying these pieces of property for our own portfolio? >> more of an mohcd question than mine. but, yes, i know that years and

years ago, when we did this lease, even though i wasn't with the city at the time. there are notes in the file that talked about it. to negotiate something and i don't see that it went anywhere at that time, which was in 2011 or so. >> chair fewer: because these leases are really -- they're really expensive i think. also if we've gone into contract with them since 1999, we know that this is something that's pretty permanent. this is something that we see, i'm hoping that we're using measures to measure efficacy and also need. and i don't think our need has been reduced at all. but i actually think that actually our needs to perhaps own some of these properties ourselves instead of continually paying represent on them, maybe -- in the long run, could be

more cost effective. the one lease goes until 2031. and so is there a timeline on this at all? >> a timeline? >> chair fewer: like time constraint on this? i think my main question is that half -- okay. let's -- we know that san francisco has right now over at a point that we have not been at in a very long time. so we are seeing that there are more vacancies. we're seeing buildings like these that are older buildings, we didn't naturally say that it could be challenging to actually rent these out. i guess at the time of need. i'm just sort of wondering if it's time whether or not to go back and if we have the funding. i know that we packed prop a that gives us some funds to

acquire buildings. i'm wondering is it worth it financially to actually look at acquiring these buildings instead of paying these massive leases for 25, 30 years. what do you think, gloria? >> sorry. i think that -- just as background -- a little bit of background information. since my tenure here with the city, which is now going on six years, it's been the policy and the practice of the transaction and the real estate division to always ask if someone would like to sell and attempt to get that done, if that's what the department or the city or the board has a desire to do. and then secondly, when we're redrafting for a new lease or if we have to do an amendment to a lease, we always want to include that the city has the right of first refusal, if they're going to put it up for sale. that we have either negotiated or a price or negotiated perhaps

the terms or at least have the right to sit there and be the first one to negotiate with them. so those are the two things that we do now. i don't believe that was being done back in 1999. and i don't know whether or not that was being done in 2011. i know it's been happening since about 2014. i also think that it is usually much more economical to purchase a building that we're going to own for a substantial period of time, 50 to 100 years. we would want to own the building more than rent it. i will say that it's up to the mayor's -- mohcd and the budget office to bring to us which ones they want to buy and which ones they don't. we tend to let them figure out their own programming and what they want to do. i can throw that over to mohcd to see which ones they want to buy within the city. >> chair fewer: sure. you're just the transaction people. like i think that the policy is

a different thing. okay. supervisor mandelman, i see you in the queue. >> supervisor mandelman: yeah. i want to echo kind of what you're saying. because i have kind of the same question. it would be great to know how the city think thinks about thes as they come up for renewal and evaluates whether or not to try and make an offer and try to acquire the property. and to know if we have worked into these leases any of those rights of first refusal or, you know, right of first offer or anything or at the end of the ten years. yeah. >> chair fewer: yes. because it seems as though we are -- we are paying for the services ourselves. we're just basically -- it's just a building. but we have the buildings, i mean, we've been master leasing them for so long.

why would they want to sell if your city is master leasing at this rate. i mean, it just seems like money coming out, who really cares. like i -- i'm sorry. >> supervisor mandelman: these are the only two buildings. there's many, many buildings. but how is the city thinking about this portfolio over time. because if we're just going to keep extending these leases for decade after decade, it doesn't -- it doesn't seem like the best use of our funds. >> chair fewer: yeah. i don't think the need is diminishing. i think we'll still have the need. and so maybe -- >> the department of supportive housing, chair fewer. >> chair fewer: i know, h.s.h. i don't know why i have h.o.m. here. okay. yes. so, please, dylan, what do you think? >> yes.

thank you, chair fewer and members of budget and finance committee. i think this is an interesting question. and we are certainly looking at acquiring new properties, as you all know. we just acquired two new properties under the homekey grant fund. winking we do want to continue to look at possibilities and potential to acquire, we do need to continue, you know, some of these master lease, especially these two leases. i believe one expires the end of december. and the other the end of january. and so i would suggest that, you know, we do extend these leases and work closely with our partners at mohcd and the mayor's office to be looking at the entire portfolio. with especially permanent supportive housing, knowing our policy is, you know, it's always preferred to acquire as clients said. but we're looking to expand. [ please stand by ]