>> good afternoon this is the meeting of the san francisco port commission. tuesday april 27, 2021. item number one is roll call. [roll call] commissioner woo ho having audio problems.

item number two is approval of minutes for the april 13, 2021 port commission meeting. >> i so move. >> second. >> we have a motion and a second. >> president brandon: roll call vote please. [roll call vote] can you hear me commissioner woo ho? we might have to come back to her for that. >> president brandon: motion

passes. minutes of the april 13, 2021 meeting are adopted. >> item number 3 is pledge of allegiance. [pledge of allegiance] item number 4 is announcements. please be advised that a member of the public has up to three minutes to make comments on each agenda item. please note that during the public comment period the moderator will instruct the dial-in participant to use the touch tone phone. audio prompts will signal to dial-in participants when their audio is enabled for commenting. please note if you're watching this meeting streaming on sfgov

tv, there's a short broadcasting delay. when the item you want to comment on is announced, dial 415-655-0001. enter access code 187 466 7366-pound. please mute the volume on your division or computer. when public item is announced, dial star 3 and listen for an audio prompt to signal when it's your turn to comment. please mute your microphones and turn off your cameras when you're not presenting. that brings to you item number five, public comment on items not listed on the agenda. >> president brandon: thank you. we'll open the phone lines to take public comment of items not listed on the agenda. members of the public who are joining us on the phone. there will be an operator to

provide instructions now. >> clerk: thank you. at this time, we will open the queue for anyone on the phone who would like to make public comment on items not listed. on the agenda. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. president brandon, at this time there are no callers on the line wishing to make public comment. >> president brandon: thank you. public comment is closed. next item please. >> executive director's report.

>> good afternoon president brandon, vice president adams commissioners, members of the public i'm elaine forbes executive director of port of san francisco. we're aware of the derek chauvin outcome. the guilty verdict held chauvin accountable. the national reckoning for racial and social justice that mr. floyd murder inspired through the early days of pandemic is having a lasting effect and gaining traction. sadly, the verdict will not bring back mr. floyd or fill a deep wound in communities of color have endured for industries. since mr. floyd's murder last year, more murders have taken place. i am hopeful last week verdict

will have a lasting impact on the movement of justice. i believe it signal things to come as we continue to do the hard work and demand change. we must all do our part. the port is striving to become an anti-racist organization to support this change in the ways we can. in my report today, i will provide an update on economic recovery and equity. san francisco's new covid cases and hospitalizations remain low vaccination efforts continue to reach more people and we're seeing more and more san franciscans get a shot. 67% of san franciscans received their first dose of the vaccine. the city continues to making significant progress for vaccinating people who live and work in san francisco. allport staff has access to

vaccines. last week we were able to secure 50 slots for any staff who has not received their first dose. all staff who wanted to get a shot were able to get one. the pandemic is not over. we must continue to be visible lent and adhere to public health guidelines. all members of the public are urged to continue to wear mask, social distancing and hand washing. we're on a long road to economic recovery and look forward to welcoming people back to our water front. the port is facing some very serious financial challenges as a result of the virus. port revenues have fallen by nearly 50% with economic forecasters mating total loss of $100 million over the next five years. the port is working aggressively to write our financial ship through the recently announced economic recovery initiative. i'm happy to note that our first

action that we're taking in this initiative is pursuing a $20 million fund loan from the city and we received initial support from it mayor. this concept is subject to further review from the mayor's office and the board of supervisors. if approved the loan will be paid back in full overtime. the fund will help fill the revenue shortfall and allow us to avoid layoffs in the upcoming fiscal year. it will allow us to care for aging and de-- deteriorating infrastructure. our port service remain open for business and provide economic relief and support for our tenants. maintaining fund balance is important to sustain the port's strong debt and bond rating and hedge against future

emergencies. the port is an economic engine for the city and city leadership understands the value of our organization and will work with us. as you know, the pandemic has also brought unprecedented financial woes for our tenants. in december 2020, the commission authorized the rent forgiveness program for nonprofits to 7 up to three months rent of forgiveness. the program has a maximum forgiveness of $200,000.

i like to inform the commission that we have allowed one applicant to enter the program even though it has revenues exceeding $3 million maximum annual revenue threshold. we made this decision for our port tenants to enter the program, this tenant meets the criteria to enter the program and total rent forgiveness requested by all applicants is less than the maximum amount authorized by the port commission of $200,000. rent forgiveness program sums to approximately $111,000. we're happy to welcome young community builders into the program. equity. i'm pleased to report that the port continues to make progress on our racial equity action plan goals. the port leadership team identified key staff to serve on the racial equity change team for their respective division.

each member is commit to ensuring actions reflect and embody the racial equity action plan goals and principles at the division level. a key and immediate responsibility for the racial equity change team is to monitor and report on their divisions progress implementing one or more of the 30 short-term actions by the end of the year. the port race equity team to celebrate diversity and working to finalize diversity calendar programs to celebrate aapi heritage month in may. the purpose of the diversity calendar is secrecy staff. awareness, provide opportunities to engage and invite staff to experience a variety of cultures at the port through history, art, music and food and collaboration. to conclude my remarks i like to acknowledge the hard work and excellent collaboration of port staff on crane coe park.

in northern california chapter represents more than 650 landscape architects. the national professional organization represents 17,000 landscape architects. i'm delighted to report that the energy observer is scheduled to call the port the vessel runs on hydrogen using sea water has been on a 6-year voyage to test the ship and to promote and educate about the clean technology. the observer started its voyage in 2017 from france. she is colonelly in long leach and head to hawaii after leaving san francisco. that concludes my director's report. thank you. >> president brandon: thank you,

director forbes. we'll open the phone lines to take public comment on the director's report. >> clerk: thank you. at this time, we will open the queue for anyone on the phone who would like to make public comment on the executive director's report. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: do we have anyone on the phone? >> clerk: at this time, there are no members of the public on the phone wishing to make public comment. >> president brandon: seeing no callers on the phone, public comment is closed.

>> commissioner gilman: director forbes thank you so much for that report and your opening remarks. it's really important to recognize the events that are happening it nationwide and they affect the efforts of the port from an equity perspective and continuing to become an anti-racist organization. i really appreciate those remarks. i want to -- i know we have coming up as an item, how excited i am about loans to help us sustain this economic crises. i want to thank you and the team for all your work. i have no other additional comments. thank you. >> president brandon: thank you. >> commissioner woo ho: i echo what commissioner gilman said. i had one question about the funding. i was going to ask since it's

also part of the later finance presentation. can you tell us what -- i know it was identified in the staff report, what are the possible sources which department is the one able to give us this $20 million. what are the candidates? >> you have a knack for guessing. we're in discussions with the san francisco airport and also with the city's general fund. of course, the loan would have to comply with all regulatory restrictions. there's a precedent for airport loaning funds to the city actually under the jordan administration when the city faced financial challenges. there's a precedent and there's a nexus between airports and ports. they've been very gracious to us. the city is looking internally at the city's general fund sources and accounts in the general fund.

>> commissioner gilman: i would think that the general fund is stressed at this point given all the demands being made. rest of the city is trying to go to economic recovery. i will reserve my other remarks when we get to that part of the financial presentation. thank you very much for the report. >> commissioner burton: no comment. >> president brandon: vice president adams? >> vice president adams: directo r forbes, i appreciate your strong message. i think commissioner gilman will answer my question. maybe we can get the money from the airport. just really concerned about the attacks on our governor and a possible recall. this seems like this year it's going to be like last year.

we'll get through it. we're taking couple of steps back. i'm hopeful because i know we were hoping to get money from the state. thank you. i appreciate the effort of you and your team. thank you. >> president brandon: thank you. elaine, thank you so much for your opening comments and your compassion. it's a sad time. four days ago on my birthday, another young black man was killed. it just continues to happen. i know we have a long way to go. i'm so happy with the work we're doing here at the port under your leadership. thank you very much. it does not go unnoticed. i think we are so lucky to have an executive director that is a

finance -- [indiscernible] >> clerk: [agenda item read]

>> so moved. >> second. >> president brandon: now lopes- let's open up for public comment. we'll take public comment on the consent calendar. anyone on the phone like to provide public comment? >> clerk: at this time, we'll open the queue for anyone on the phone who like to make public comment on the consent calendar. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limit to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment.

>> president brandon: do we have anyone on the phone? >> clerk: at this time, there are no callers on the phone wishing to make public comment. >> president brandon: thank you. seeing no callers on the phone. public comment is closed. we have a motion and a second. please call for roll call vote. [roll call vote] >> president brandon: motion passes unanimously. resolution between-19 is adopted. >> clerk: request approval of port fiscal year 2021 through 2022 operating and capital budget supplemental eappropriation. this is resolution 21-20.

>> good afternoon my is nate cruz. i'm here to request approval for the supplemental appropriation. just to remind you, the historic context under which we're submitting this request. this is the revenue history of the port until we hit covid. it tells a pretty blunt picture about our situation over the 5-year recovery that we're forecasting before we return to normal revenue levels. we're forecasting over $100 million shortfalls. that requires a very significant adjustment to the way the port does business. here's a little bit more revenue detail that we provided in the information a month ago.

the table on the top provides details on revenues both before and after the pandemic by different types of business lines. you can see commercial rents, that includes fixed rate and percentage rate tenants is down about 15 e%. 15%.from july to february 2020. parking is down 60%. cruises is nonexistent. cargo has been stable. fish and harbor services have been down 15%. the table below that on the bottom takes that revenue numbers that slices it in different ways. it slices it by division. you can see real estate versus maritime. what it shows is the portion of the total revenue picture.

before the pandemic, 77.6% total revenues maritime 22.4. that remains relatively stable during the pandemic, real estate revenues were about 80% and maritime about 20. the supplemental that we're proposing for you today for approval are number of components. the first is the operating budget changes. the changes to the salary and benefits line, we identified over $2 million of savings by moving quite a bit of port labor off of harbor fund and on to capital projects and outside funding sources. that is largely offset by the cost of living increases to city labor rates. the net adjustments is savings of $400,000. in other current expenses we're

requesting $3 billion to ongoing rent negotiation for lodges in tier one. programmatic projects, we identified roughly $600,000 of savings across various projects in the port. we also increased very important project that we think we hope no not need, we may. that's the project we used to prepare vacant facilities for new tenants. hope all tenants can weather the storm. we want to ensure we have the resources to populate those

vacancies as soon as possible. the s.b.h. operating budget, that's also seeing an increase, that's due to the city labor rates going up by the cost of living. this is the next component of the supplemental. this is capital appropriation. this is pretty unusual. because we've been spending so deeply in our fund balance this year, we need to replenish that. what we're proposing is to go back to unspent funds that were appropriated in previous budget years and take the unspent money and replenish it to fund balance. those defunded projects were identified in the late fall through a ranking process that the deputy directors had. we identified $17.7 million of savings. on top of that $17.7 million of

defunded projects, the finance and accounting and the deputy director staff members at the port identified technical adjustments little over $9 million. that's closing out old projects that's right sizing projects that maybe have more funds that we currently anticipate needing. we're able to identify quite a bit of funds there. finally, we're also appropriating $11.5 million. that's just paying the port's fund balance back from an advance we provided to the resilience program. we seen litigation that would tie up the seawall bond issuance. rather than let the program stall, we advanced $11.5 million. those bonds have been issued to pay ourselves back. the total replenishment to fund balance is ref -- roughly $38.3 million. that's how we -- that affected

capital appropriations from prior years. this provides an overview what we're doing with the fy '21, '2.

we hope to cover most of this

money, we identify the source of the league. i think it's the fuel operator. we expect to recover most of the this $1 million. we want to make sure that funding was available to clean up in a rapid manner. in the southern waterfront, there's no changes to the budget that you approved. it's about year and a half ago. unchanged $2 million in the project to update fenderring. this table is unusual table. we will introduce this during the covid budget presentations. it provides the full snapshot of the port finances through the pandemic and also what hope is the recovery window. what you're seeing is a forecast of the fund balance, revenues and expenses through recovery.

in the current year, we're expecting to see the starting fund balance roughly $69 million, revenues flow in, expenses flow out. we're expecting to lose or withdraw from fund balance almost $50 million this year with end in fund balance of $20 million. in 21-22, that's the subject of proposed appropriation, we start the year with not very much fund balance. the revenues come in. in that blue box, you see in the first row, now you can see the effects of this capital defunding. we're bringing in $38.3 million in to replenish fund balance.

in 22-23 revenue come in. there's this other line. the bottom of that blue box, e.r.i., that's really to ongoing saving that are going to be necessary to keep the port on a secure financial footing. the existing savings we've identified are certainly difficult. they are fairly simple to operationalize. these e.r.i. saving will require lot of work. this is the financial picture that we're forecasting with what we know with covid recovery. which has quite a bit of uncertainty. one of the big things that's

changes is staff made significant progress to secure inner fund loan. i want to give lot of credit to director forbes here who had unprecedented event and provided lot of leadership and paved the way for us to make that ask. what we included permission and authority to into a $20 million loan that would be repaid in full within 20 years. these are all draft terms. we're still working to define the fine points. currently we're envisioning that payments will be interest only for the first five years to allow for the recovery and revenues to rebound. we would pay it off within the next 15 years. if things recover more quickly or if something changes in the stimulus landscape, we can always repay it early.

we're envisioning the interest rate to be equal to the cost of funds that the lender would have earned on that money. it all sits in an account that the treasure controls. it's roughly 2%. what's really critical about this loan is in the last presentation, we mentioned there might be a hand full of layoffs. if we're able to secure this loan, it eliminates need for any layoffs. this slide is very similar to the one we just saw but now you can see in green, the effects of the interfund loan. not only it mitigate need for layoffs, it does two key things. first you see the fund balance numbers on the bottom. the fund balance numbers there are much better than in the previous slide. they all stay above $30 million,

which is a number that in coordination with the financial advisors have come up with a minimum level that we need to have through the pandemic. we certainly need to build that number back up to roughly $60 million. 30 is kind of a threshold for us. we want to have -- to maintain. the other thing that does if you look at bottom of that blue box, future e.r.i. saving in '22, '23. now that number is $5 million. without the interfund loan, the target net savings needed there was closer to $8 million. the work that deputies are doing, if we're able to secure the interfund loan, will be less severe to the port. the way to think what the interfund loan does, it really lessens the intensity of the revenue shortfall shock. it allows us to stretch the

effects out overtime and soften the effects. we want to secure that loan. we're working diligently with the mayor's office and controller's office regularly. if we're able to secure that loan, it will be entered into the budget. that is submitted to the board of supervisors on june 1st. as far as the future e.r.i. work, that work has begun. really, there's a lot of work ahead of us to understand how to implement them. real implementation -- we'll be back to update you with our progress on e.r.i. that concludes my presentation. i'm happy to answer any questions you have. >> president brandon: thank you,

nate. can we have a motion? >> so moved. >> second. >> president brandon: let's open up to public comment. we'll open the phone lines to take public comments on items 8a. members of the public joining us on the phone. >> clerk: at this time, we'll open the queue for anyone on the phone who like to make public comment on item 8a. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limit to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. at this time, there are no callers on the phone wishing to make public comment on this

item. >> president brandon: thank you. seeing no callers on the phone. public comment is closed. >> thank you for that report. i appreciate the progress you have made in terms of looking at the difficult decisions as far as how we're going to move forward on the financial side. with director forbes report, very good to hear about the interfund loan. only one thing. this is something to be -- you all are very conservative. i personally think that the recovery in this country, economically is going to come sooner than perhaps what the city is projecting. that will be good news. the revenues to climb faster in the latter part of 2022, 2023. we're feeling that the economy

has recovered to much greater extent. it is not affecting some of our tenants as much, as far as hospitality or travel. if you look at some of what's happening with the corporate earnings that is coming out for the 2nd quarter and other indicators it's very clear that the economy is on a fast pace at the moment. there will be some good news. i hope that people want to travel. we hope to see some of this impact us. we are limited to restrictions like the cruises. we're going to hear more about that later. i hope that your forecast further out is going to be more positive in what you have now. i understand that you -- at this point in time, it's in throbbing -- lock step what the controller office is saying. it's really on the revenue side,

which is the most important side. turning to the expense side. i did hear what you said. in the presentation that you put out earlier, the savings was only about $400,000 that we're getting about $20 million. i guess some of it is reflected in what you're calling e.r.i. savings. that's a big differentiation. i need more explanation on where the $20 million will be applied beyond layoffs? >> the application of the $20 million in proceeds would go and sit in our fund balance.

it do allow us to offset the lay layoffs. we will be lowering those e.r.i. targets. does that answer your question? >> if i can add couple of comments. the decision about where the funds would go, whether to fund balance, that's the technical place that the funds would go. whether in future budgets we would allocate your funds to capital investments to keep our facilities open and not shuttered or to avoid layoffs into expenditures or into fund

balance is describing is subject to future decision from the port commission and the future budget progress. it is subject to future port commission decision-making and sum to what the economic recovery initiative yield. those are assumptions what is possible. we don't know what we can safely assume and savingses and revenue enhancements. how successful that is will depend very much on the $20 million loan fund are appropriated. i hope that helps. nate please jump in if i misstated anything. >> i appreciate that explanation. your layoffs will not equal

$20 million. we all would have been shocked if that's the case. i guess couple of things just from a finance point of view, if you're putting in that you will use it in the future, the balance sheet is shored up, i would suggest that you also think about a concept that -- if you will take an actual $20 million cash from whatever agency and the city will give it to you, i'm not sure what accounting industries you're making, my suggestion would be, if you're putting it there to give yourself a reserve, you wouldn't want to draw down when you don't need the money yet. what i'm saying, probably is -- from my point of view as a banker, it would be good know if you had a line that you can draw upon. if you're not using the money in

expenses up front or on capital projects, don't borrow more than you need. if you can set up some sort of structure that would be more of a line versus strictly takedown of 100% in financial terms. that's something you might want to take down a portion of it. do you have some things that you need to mitigate. when i hear we're going to cushion the layoffs an that's only $400,000, it's lot less in between. your explanation just now, elaine, did not give me the sense that you identified it specifically. i would suggest you work on a hybrid structure, which is more based on a drawdown as you need versus drawing everything and pay interest on it. does that make sense? >> absolutely.

that's a point of discussion currently. i didn't include it in the slides. drawdown model is something we've been considering. >> don't pay interest on anything that you don't have to. the other agency will still eearn that money in the marketplace. the city would be better off too. other than that, i think i understand what you trying to do. this is sort of a way to cushion a bit more of of soft landing for us. i'm hoping that your projections will be actually better than what you're showing here.

>> i want to applaud staff for creative idea to help the port move forward. thank you. >> president brandon: thank you.

>> vice president adams: thank you. commissioner woo ho, i appreciated your comment. incident to say to director forbes, i like this. we're not sitting back playing victim. we're playing chess instead of checkers. i like that. i really like it that we made a decision. we're going for it. i support it. i appreciate commissioner woo ho, she comes from that world of finance. i don't. so do you director forbes. that's how i think. we are playing chess instead of checkers. we're thinking out the box. we never had to go here. i'm on board. i want to say thank you and commissioner woo ho thank you for your comments. president brandon, you all understand finances. i think staff will be happy.

we got some wiggle room now to give us some time. i'm hoping as you say commissioner woo ho that it economy will get better. unfortunately we don't have a crystal ball. i'm hoping that it will be faster than later. thank you. >> president brandon: nate, thank you so much for this report. very comprehensive. i want to tell you how much i appreciate the team coming up with this innovative concept. this puts in a better position than we were earlier this year.

[roll call vote] i think you're on mute commissioner woo ho if you're there. >> president brandon: motion passes unanimously. resolution 21-20 and 21-22 are adopted. call the next item please. >> clerk: 8b is information presentation on on the port's contracting activity and local

business enterprise strategic initiatives for the first and second quarters of fiscal year 20 between-2021. >> good afternoon commissioners. i'm from the contracts procurement team. i'm here to present the local business enterprise activity and report back on our l.b.e. engagement strategy. we have two part agenda. we're going to be looking at the rundown l.b.e. contracting activity. the awards, payments and outreach. the second part will be to look at the l.b.e. engagement strategy including looking at the citywide context for the l.b.e. program reporting on the deliverables to be presented. the l.b.e. program is governed by administrative code chapter

14b and administered by the contract monitoring division. the minority businesses enterprise in the blue section, the women business enterprise in the red section and the other business enterprise in the yellow section, the pie chart on the right is a pull out of the m.b.e. slice shows you the breakdown of ethnicity of m.b.e.s in that piece. larger segment is for asian owned firms followed by latinx owned firms and african-american firms. as a city there was a decline in the number of certified micro and small firms by 14%. when you compare the two time periods, there was a small increase in l.b.e. and m.b.e.

remained steady. in the reporting period, the report awarding five contracts for a total of $3.2 million. four of the five contractors were awarded to l.b.e.s including an african-american owned firm and latinx firm and nonprofit. 55% of contract dollars were awarded to l.b.e.s and please note that one contract was not awarded to an l.b.e. it was a federal contract. if we exclude that contract, the port awarded 100% of our contracts subject to the l.b.e. program. the port contract payments was $3.0 million or 14% of payments. the percentage as needed and professional services contract remains strong with over 30% of payments. when you look at construction, you might be wondering why is it

only 4%? port staff had to consider this. the tradeoff was eliminating the scope of work, we're able to dispose the material and more environmentally beneficial way and it's safer. we were contributing to the wetlands restoration project. we saved $355,000. at the last port commission meeting, there was a request for port and l.b.e. performance retirement budget. there were no construction project closed out during this reporting period. that will be presented in the future reports. let's turn to performance overtime. the contract awards remain very

strong. the dollar awards remain within trend. chapter 14b is required for contracts that i mentioned. the l.b.e. program and how it's applied is negotiated. in total, $83 million in these projects has been awarded to l.b.e.s. $5 million has been awarded to black owned businesses. i'm delighted to share this

outcome with the commission today. the port has widened the lens how we think about the economic activity an organization and stimulating impact of our development deals in san francisco. in addition to our contracts, how we engage with our community is also a core function. the port launched the l.b.e. emergency relief program where we have currently approved 16 loans and reaching about $700,000 in funds approved.

we hosted a workshop on over water work to hear from l.b.e. firms about bidding at the port and dispel the myth that all our projects are over water. this is the point of the presentation. we will move from our strategic thinking and outcome in future work. the slide is the same slide you saw in october. it's our basic approach. internal practices, the importance of partnership, the technical assistance and really merging our efforts with the racial equity action plan. for period looking at the last two fiscal years, we looked at the data reported on l.b.e.

participation. the l.b.e.s are the ones in blue. the non-l.b.e.s are in yellow. other departments are bars one and three and port is bars two and four. i'm delight to announce in when we compare the port's results to similar departments, they awarded 38% of contracts l.b.e.s and the port awarded 62% of contract awards to l.b.e.s. these are pretty great results. i like to thank my predecessor and all the project managers who work to create opportunities to encourage professional services and help many l.b.e. bidders. we maybe a small department in the overall city picture, there's been a continuing instances to l.b.e. engagement as these results speak for themselves. when it comes to the contract awards by dollar, we're doing

better than the city departments. other departments are awarding 32% of dollars and the port is at 39% of dollars. these are impressive results. we're going to do some more analysis to understand why we went from astronomically better to nearly excellent. when we look at the l.b.e. awards, by dividing the bities into l.b.e. type we see that the port has the same exceptional results for o.b.e. and w.b.e. how do we think about this? when i take a step back and i look at these results, i think we are certainly well beyond what we expected and areas of growth should be strategies for m.b.e. engagement. the path forward for equity and contracting is with working and making sure that we implement

the racial equity action plan. next, tiffany is going to share how we have completed all our deliverables and share what's coming up next. >> thank you, stephanie. good afternoon president brandon, vice president adams and commissioners. as previously introduced, my name is tiffany tatum. i'm the senior community development specialist. i'm here before you again to underline what stephanie already said and to highlight our continued efforts for fiscal year 2022. on slide 8, stephanie highlighted the community engagement efforts that was completed between july 2020 and december 2020. we have had the opportunity to reach out to communities and engagement will be a core value. we are commit to meeting our deliverables. let's be clear, that completing bullet points does not mean we're finished. these activities are things we will continue to work and rework

and track overtime so that the value of the l.b.e. program continues to deepen into the contracting process at the port. our july 1 activities are underway. by july 1, we will have built on our previous efforts with new activities that includes developing phase one of an l.b.e. tool kit. we intend for this to be collection of resources that give staff the foundation for doing l.b.e. equity work. understanding the requirements but also best practices and how to implement this program in a meaningful way. additionally, we will also be working to develop a conceptual framework for a l.b.e. loan program. by the end of the calendar year, we intend to roll out and implement a fully vetted and final version of the phase one

l.b.e. engagement tool kit, enhance l.b.e. payment data which will be an internal process improvement to ensure that we have the systems in place to monitor l.b.e. utilization.

>> president brandon: we will open phone lines to take public comment on 8b. jennifer will be our operator. she will provide instructions now for anyone on the phone who like to provide public comment. thank you. at this time, we will open the queue for anyone on the phone who would like to make public comment on item 8b. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: thank you. do we have anyone on the phone? >> clerk: there are no callers on the phone wishing to make public comment on this item. >> president brandon: thank you. public comment is closed.

>> commissioner gilman: thank you so much for the report. i want to thank you for the report. as always, we continue to align

this with our racial equity report and recommendation. i have faith in tiffany and stephanie and director forbes and president brandon leadership we'll get there. we're doing better than other city departments. thank you. >> president brandon: thank you. commissioner burton? >> commissioner burton: wonderfu l comments. we have to keep our fingers crossed. semigood news. i talked to the deputy director of finance today. they are very encouraging to send that money to us. she can't guarantee anything. she's very optimistic. i've known her for quite a while. she knows what she's doing. she and her boss, they are all

very supportive. i know we got the commission support today. i think we're going to get that money. it looks better than we might think. >> president brandon: thank you so much. we really appreciate your support in all the work you're doing. thank you. vice president adams? >> vice president adams: stephan ie and tiffany, it goes without saying, once again, just another great presentation. very flawless, right to the point. very well thought out. you answered all my questions. i want to thank you both for the work that you're doing. appreciate it. >> president brandon: thank you. stephanie and tiffany, thank you so much for this report. this is one ever the comprehensive reports we've seen on this subject in a long time.

even the staff report was much more detailed than your presentation. you goys put a -- you guys put a lot of thought and focus in this report. i want to tell you how much i appreciate it. i have one question. that's regarding the -- [indiscernible] can you explain where we're not meeting the numbers there? >> i may need rod's help. let me explain my understanding of it. there was going to be a scope of work for how the material was going to be disposed. that was scope done by the o.b.e. after the contract had been executed, it turns out that there was actually another way that was approved to dispose of the materials which hadn't been approved earlier. as a result of this new change,

there were many benefits. it was going to be disposed in a deep ocean site which involves moving the materials much further distance. it's leaving it in the ocean. whereas the new site is both safer as well as more environmentally friendly as well as cheaper way of doing it. it is not a scope of work that this l.b.e. could do as well as was interested in doing. i'm not sure they were capable of doing it for not. there are many conversations around this specific l.b.e. gauged in this. there are other l.b.e.s that are on this contract. their utilization is higher than what the initial goal had been. while the l.b.e. utilization for the one l.b.e. is down, it is better for the other l.b.e.s. >> president brandon: i know that a huge project. i want to make sure that going forward, that we are honoring

our l.b.e. commitment. you guys are doing an incredible job on l.b.e. outreach and on contracting with l.b.e. we still as noted have work to do when it comes to m.b.e. i really appreciate all that you put in place to expand the opportunity going forward. this was a great report. i really appreciate all the work you and tiffany put in it. >> commissioner woo ho: i wanted to echo what previous speakers said. this is a tremendous report and wow, to improve what we have. i want to commend all of you on

the staff side and executive director forbes and also -- this has been the passion of our president here. president brandon. she has been pounding the pavement ever since i been on this commission. one of the things that strikes me with l.b.e. and m.b.e.s as you just mentioned on the mission rock project, sometimes people don't have the qualifications. i'm wondering, we make our big scale developers in the city put aside funds for affordable housing, etcetera. i'm wondering whether there's going to be a day we not just men date -- mandate we will have

l.b.e.s. it's giving them a leg up to get qualified to have the skills and the capability to do the work. we sort of ask the developers to put aside funds for affordable housing. if there's something we can be more -- you can mandate saying you should put aside x percent of the project. if you don't have enough people qualified to do it, we want to make sure that the outcome of the projects are quality standards than we expect so we don't have to rework and spend more money. there's got to be a way to teach them how to do work. that burden isn't on the port. it's on everything that is doing this work. i will give that as an idea to think about. i don't know if other people in the city thought about it.

i know that the city made lot progress on affordable housing in that regard. we pushed the idea. we're pushing l.b.e. is there anything more we can get other people to share in technical assistance? >> i do believe there's a way in which the developers contribute. which is one of the main training arms. i don't have lot of details here. it's something we can come back to you with as it relates to that fund. >> commissioner woo ho: that would be helpful. if there's anything we can do,

maybe to compliment or maybe in part of the program, let's see how walk make one plus one equal three. >> president brandon: i give my apologies. that's a great point. quarterly, we do meet with your development partners. we meet with the resilience team to make sure that our development partners, we're all working together to make sure that we are increasing our l.b.e. opportunities and input. we do that. we started this about two years ago. it's working extremely well and

stephanie and tiffany are doing great job on following up with them and working with them and being part of the team. thank you so much. that's definitely something we would like to continue to do. >> clerk: 9a, request approval for resolution for authorizing the executive director to execute a first amendment to the transit shelter advertising agreement with the san francisco municipal transportation agency and clear channel outdoor. this is resolution 21-22. >> good afternoon commissioners. good afternoon president brandon and the rest of the

commissioners here. i need the next slide please. talk about the clear channel agreement and the resolution in front of you. i was presenting at our last commission meeting earlier in april. very briefly, what this contract covers in 2007, the port entered into an agreement with the sfmta of san francisco, municipal transportation agency to maintain transit shelters. clear channel as the right to display advertising panels. sfmta and the port share revenue from the advertising with clear channel. clear channel is in compliance with the agreement. the term is for 15 years with a city option to extend five years. about 20 months remaining within this 15-year contract.

regarding the covid-19 pandemic and its impact on transit, transit ridership is down 60% to 70%, ad revenues 60% to 80%. creating a significant hardship for clear channel and also impacting the revenues to the city and the port. port revenue under the agreement -- of the advertising panel's, 44 of the 1706 are on port property. that's about 2.58%, about one in 40 of the panels that are spread throughout the city. the revenues have increased annually over the past 12 years. pre-covid they were about 440,000 annually. the port received by $3.6 million in total.

there was some questions about the revenue how it's being dispersed and when it's being dispersed. under the proposed amendment. it affects the -- the propose amendments affects the payments to the city and port from january 2020 to december 2022. in different periods it affects it differently. prior to the pandemic in this period the port expected to receive about $1.34 million total. with the amendment, the port would receive $702,000 total, decrease of $638,000. payments would be guaranteed. the period from january to april of 2020, we have received back payment. $146,000. that is the full amount under the existing agreement.

the proposed amendment states that for the last two months of that first six months from may to june of 2020, there would be no payment made. from july 2020 to june 2021, that's a 12-month period instead of receiving the approximately $440,000, we will be receiving $152,000. from july 2021 to june 2022, another 12-month period instead of 440, we'll be getting $162,000. in the last six months of this three-year period, we will be anticipate receiving the full payment which comes to at that time about $240,000. there are some changes to the agreement that don't impact the port but they do m.t.a. such as the management pieces.

there are some givebacks from clear channel to allow public messaging and some of the advertising panels. regarding the amendment approval process, the agreement requires all parties to approve any amendment and three parties on the agreement are clear channel, sfmta and the port commission. the sfmta approved it on march 2nd. it's the resolution is in front of you today. the next stop will be the board of supervisors and the agreement is also acceptable to clear channel. gale stein of sfmta is here to assist if there are questions. thank you for your attention. >> president brandon: thank you very much for your presentation. commissionerrings, -- commissioners may i have a motion? >> so moved.

>> second. >> i have a question. >> president brandon: let's open up to public comment. we'll open the fine lines to take public comment on item 9a for members of the public to join in on the phone. >> clerk: at this time, we will open the queue for anyone on the phone who would like to make public comment on item 9a. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: do we have anyone on the phone? >> clerk: at this time, there are no callers on the phone wishing to make public comment. >> president brandon: seeing no callers on the phone.

public comment is closed. commissioner burton? >> commissioner burton: clear channel, they also have television right? >> they have many different business lines. our agreement is solely with the transit shelters. >> commissioner burton: that wasn't my question. they also have television right? >> i'm not much expert on television. >> commissioner burton: that either have television or they don't. i think they do. all of the money when it's all over, goes into the same pot.

>> our agreement -- >> commissioner burton: i understand that. thank you. i appreciate it. our agreement is solely dealing with the billboards or the shelters on portland which the revenue that comes from that, then goes into clear channel and clear channel i don't believe that the money is divided necessarily. i guess do we have in case things bounce back, do we have any kind of meaningful -- [indiscernible]. is it just statutory limited to what contract you people have agreed to?

>> if i may address that. what i just displayed is a minimum annual guarantee that the port will be receiving. it is not subject to the condition of the economy. the economy and the advertising revenue decrease. the port will still receive that. if it increase, it will still receive that. >> commissioner burton: if they increase we will not get more than that. >> if a revenue -- there's a revenue sharing clause in the agreement if it exceeds a certain threshold and the port and the city will benefit from the revenue sharing. i would have to refer to gale stein with sfmta if she's available to answer that. i don't have that number. >> commissioner burton: okay. the

>> revenue sharing existed throughout the first 12 years of the agreement. >> commissioner burton: unfortun ately, the only thing i have some knowledge on is the transit advertising in the city having been involved in it 30 years ago. i kind of understand it. the question i have is simple. is there a code built into it that would provide more money to the city and the port if revenues to clear channel exceed the guarantee? >> yes, there is through a revenue sharing agreement and gale stein, just popped up here. i like her to address that threshold for you. >> hi commissioners. this is gale stein from the

m.t.a. thank you for hearing and considering this item. the contract does have a revenue share of 50%. that means that if clear channel during the fiscal year that ends june 30th earns more than $11.8 million in revenue, then the m.t.a. would receive more than the $5 million. the port would receive a higher percentage through its part, which is 2.58%. yes, there's way for they're to be more. >> commissioner burton: [indisce rnible] what will be the percentage of the increase in a certain level? how is it determined by the

revenue by clear channel on port property which i assume is a just a percentage of revenue that clear channel gets throughout the whole city, right? >> it's the whole city. for example, if m.t.a. receive $200,000 over the $5.9 million from the first year, the port would then receive 2.58% of that extra $200,000. >> commissioner burton: how about the next year? >> same thing. >> commissioner burton: it's ongoing? >> yes. there's revenue sharing for the entire contract. that's not going away as a result of this amendment. >> commissioner burton: so the contract, if the city has with clear channel -- it's an ongoing -- it's a flat fee with an

ongoing cola through the term of the contract? >> yes. >> commissioner burton: thank you very much. i appreciate it. >> president brandon: commission er woo ho? >> commissioner woo ho: i have no further questions. >> president brandon: commission er gilman? >> commissioner gilman: i have no further questions. i support the item. >> vice president adams: i have no questions. i support the item. >> president brandon: thank you so much. great report. thank you very much. we have a motion and a second. can i have a roll call vote. [roll call vote].

>> president brandon: motion passes unanimously. resolution 21-22 is adopted. call the next item please. >> clerk: request approval for the extension of the terminal management agreement between the port of san francisco and pacific cruise trip terminal l.l.c. for one month. this is resolution 21-23. >> good afternoon president brandon, vice president adams, commissioners my name is andre coleman, dent director of maritime. is at the port meeting on april 13th, staff provided the port commission with the state of the cruise. staff lightly touched on the impact the pause in cruises had on the port's cruise terminal

operator, terminals are commonly referred to as metro cruise. today's presentation will focus on the impacts to metro cruise and metro's request for extension of management agreement. this timeline was presented during the april 13th meeting. in short in march 2020, the industry announced a pause in operation of its members in order to assess and address the risk posed by the pandemic. in that same month, the c.d.c. director issued no sail order. there was recent update that occurred on april 2nd. however, at this time, it is unknown when cruise will resume from u.s. ports.

impacts through the port of san francisco, the port was scheduled to host cruise calls which only 12 calls materialized. to quantify revenue impacts, the combined calendar year for 2020 and 2021 to date direct impacts to the port of san francisco include 198 canceled cruise calls. equating to approximately $15 million in loss of passenger revenues alone. extending it in the local economy, it is estimated -- generates approximately $500,000 in direct spending by passengers and crew. i'll touch on the last two budget points little later in the presentation. with regards to the -- our impacts to the cruise terminal

operator, they are experience significant economic stepbacks. similarly to the port inability to generate passenger tariff revenue, the inactivity cruise have effectively ham strung metro's ability to generate revenue from ground operations and management all of which is required under management agreement. despite having no idea of the timing for the return of cruise, metro has continue to keep the terminal for the past year plus at a cost of approximately $90,000 per month. in august of 2020, the port commission approved the resolution 20-41. given the uniqueness of the port's terminal management agreements the relief program excluded the port's terminal operators. however, as noted at the time,

it could be negotiated on a as needed basis. metro has approached the port and requested relief in the form of extending the terminal management agreement. just a little bit of background on the current terminal management agreement. it's been in place since september 2014. with the opening of pier 27. jimmy hermann cruz terminal. it's a term one 5-year option.

included in the pier 29 license agreement that the port has with metro, metro is required to host four events per year at free of charge to the public. an example of that, the facility has been activated during fleet week which includes metro live music, games and entertainment for family. additionally, there's a discounted rate for nonprofit events. since 2015, there have been 35 nonprofit events have occurred at the cruise terminals. the proposed amendment is metro terminal management agreement is to extend the initial term by one month for each month with no

cruise activity beginning in march 2020 for maximum of 24 months. basically, once everything is put on pause in 2020 for each month that we have not had a cruise operation that month would count. the first cruise call would activate the additional month and lock in the new expiration date. the extension would be added to their 10-year term. the 5-year option will be remain and will be added on from the new expiration date. benefits to the port, an extension of the terminal management agreement will provide considerable value to both parties and improve the financial feasibility of the terminal management agreement and preserve metro's ability don't operations at the port.

metro has continued to pay the monthly fee without the pause in operations. in the proposed amendment will continue to do so for each month of extension. as we rebound from the pause in cruise, this amendment will provide stability in our cruise operations as we continue to work with our trusted partner, metro to adapt and enhance our terminal for the safe resumption of cruise and events and the amendment provides confidence to the various cruise lines and industry stakeholders. for an outlook, again, regards to port of san francisco for 2020, forecast for cruise at the port is extremely bright. we are projecting -- request for 118 cruise calls.

that number -- for passenger counts we're estimating around 300,000. that number does factor in sailing at reduced capacity. driving increase in calls is the interest of the carnival cruiseline into san francisco. as mentioned in the previous presentation, we have carnival miracle that will be home ported in san francisco 2022. there's still lot of questions on the table. industry wide collaboration is crucial for the state resumption of cruise. staff continues to engage in dialogue with the american association of port authorities. the california association of port authority and the american sea port cruise committees towards safe resumption of cruise. in conclusion, staff recommends that you approve metro's request for an extension to the terminal

management agreement. that concludes my presentation and i'm happy to answer any questions that you may have. >> president brandon: thank you for your presentation. now i like to open up to public comment. we'll open the phone lines to take public comment on item 10a. >> clerk: at this time, we will open the queue for anyone on the phone who would like to make public comment on item 10a. please dial star 3 if you wish to make public comment. others will wait on mute until their line is open. comments will be limit to three minutes per person. the queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: do we have anyone on the line?

>> clerk: there are no members of the public on the phone wishing to make public comment on this item. >> president brandon: thank you. seeing no callers on the phone, public comment is closed. commissioner woo ho? >> commissioner woo ho: thank you for this presentation. i appreciate what you gave us in terms of the background. we do have a good sense of what the background going on in the cruise industry. i guess my understanding, let me make sure that i understand this report correctly, we're extending the terminal management agreement for the period of time that the cruise ship terminal has been inactive from the standpoint of cruising. you did mention the benefit at the end. there is no financial -- we're not giving up any financial terms as result of that, which is extending the terminal management agreement. is that my understanding that

correctly? >> that is correct. just extending the management agreement and doing so for each month of extension, metro will continue to pay the management fee to the port. >> commissioner woo ho: they are just trying to sort of make up for the period of time that they didn't have -- we didn't have the cruise ship terminal either for cruising or special events. they thought this is a good time to execute this agreement? it sounds like they also obviously positive about the future in terms of when we do see the cruise industry come back. i think from i can read, once c.c.d. goes, the industry can take off quickly. everybody wants to go somewhere. at least that's what hear. younger people and older people.

cruise industry made a great point to say they are safe as airplanes. i want to be sure there's no financial negotiation that we're making, which is extending and that's really to help us, which is good. that we have a partner for the longer term as well. that gives us the stability. i want to make sure my understanding was correct. >> that is correct. >> commissioner woo ho: i'm supportive of the item. i hope the c.d.c. will move forward to release the cruise ships to do that. we have the issue that canada does not accept cruises, and mexico does. that's one the things cruise lines are thinking since they have to comply with the jones act.

>> yes. canada prohibition on cruises is still in effect through februar. i know there are ongoing discussions potentially address many technical stops. >> commissioner woo ho: i think there are some longer around the world cruises that started in los angeles. i'm hoping that one day that we can also pitch -- we can be the starting point for some longer cruises. i have friend who are going on these cruises. they're getting on in los angeles. why not san francisco? hopefully we can keep that on as we keep talking to our partners

in the cruise industry. will be great to have as commissioner adams said, he wants to see million cruise passengers. we have to come up with the routes to increase the traffic more than the traditional ones that we have. alaska, or hawaii will not create million cruise ship passengers. you have to have more exciting itineraries to attract that many people. thank you. >> thank you for your comments. >> president brandon: thank you. commissioner burton? >> commissioner burton: no comment. >> president brandon: vice president adams? >> vice president adams: great work. my only problem is that the port

-- nobody from the union got on board say they supported this. it's labor that does this. i know it's a business thing. sometimes business forget about their partner labor. you guys left labor out. you and metro both. i will rind the union of that. you guys left them out. w that being said, i'm going to support that because it's good. when we talk about partnerships, sometimes we forget about those that make it happen. besides those economically that make it happen. i will leave it at that. thank you. >> thank you for your comments commissioner adams. i'll note that in the april 13th presentation, i did highlight that our growth in cruise is attributed to the work that iowe performed throughout

the years. they had significant jump from 85 vessels on average for their prior five years to now being roughly 117 is a testament to the turnout of the workforce. i think i noted that in the april 13th presentation as well. there has been significant amount of lost workers. we're both aware of that. i think as we move forward towards resumption, we appreciate the reminder. we will have to engage labor ahead of resumption to ensure that the work environment is adequate and it's safe for the workforce. we have everything in place to get back to the level of productivity that we worked

pre-pandemic. >> president brandon: thank you. commissioner gilman had to leave early. she wanted to me to thank you for addressing the community. andre, thank you so much for this report. i'm in full support of it. i think it's fair and maritime -- [indiscernible]. thank you again for working up this agreement. commissioners, can i have a motion to approve the item? >> so moved. >> second. >> president brandon: roll call vote? [roll call vote] >> president brandon: motion passes, resolution 21-23 is

adopted. next item. >> clerk: item 10b is an informational presentation on pier 45 shed c post-fire interim improvements and a long-term replacement strategy to benefit the fishing industry. >> good afternoon commissioners. mike martin, assistant port director. i'm going to make few remarks and hand over presentation to dominic of the maritime division. i wanted to frame this item today by looking back over the little over 11 months we've had since the fire ripped through shed c of pier 45 last may. the fire, i think, put the port in position of having a number of sort of urgent short and long-term tasks ahead of it in order to get back on to its footing. there were the immediate needs to sort of make the site safe to

allow -- salvage to sort of reactivating the site in support of the fishing industry and operations of pier 45. we had to initiate a claim with our insurer. we had to start alongside all of these sort of tasks to put the building blocks together what it mean to do that in a smart way that will enhance what is there and hopefully this will put us in better fogs deal with the resilience challenges faced by port property. the backdrop to all of us, we were about two months into shelter-in-place and the pandemic and all of the destabilizing aspects of working remotely, having to sort of coordinate among different people who are on site versus the home and all the things that made it hard to develop a strategy. we put together a working group

that was exemplary and stepping to up that challenge. because the interest in the divisions at the port really had to have representation and sort of one place we can have a single discussion about all of these different things from the experience we had with the fire. today a s an opportunity to share our status and look at preview the next step we're seeing in rebuild of shed c. one thing about that conversation something i said a number of meetings which is, typically, when facilities are being built or rehabilitated on port property, we're looking to harness the skills and opportunities of private developers who are able to step in and sort of bring their

expertise to the task. in this instance, the port is the developer. we'll be putting together the strategy and the thinking behind what it is to be built there. we need to have a really thoughtful effort at putting together what it is we think the facility needs to be and sort of how we can get there with the resources we have available in our current challenge situation, budget wise. i want to give a thank you to the rest of the working group as well that includes planning and environment division, real estate development and nate cruz

from finance administration. >> thank you, mike. i'm with the maritime division. we'll be providing informational presentation on the pier 45 shed c post-fire interim improvements and long-term replacement strategy to benefit the fishing industry. our informational presentation will show the post-fire cleanup efforts. our tenant and license see relocation strategy eases, improvements and our study to identify long-term improvements and shed c replacement strategy. on saturday morning may 23, 2020 a four alarm fire started on pier 45 in shed c lighting up the early morning sky.

pier 45 at the port of san francisco, suffered losses and operations were disrupted. the loss of shed c and contents must appear without fish processors and destroyed personal property for many fishers. since the fire, the port has removed the remains of the shed and coordinated cleanup. huge thank you to the san francisco fire department for the response. the port immediately began multidivision, all hands on deck for hazardous material removal, demolition, tenant communications and salvage management. the port contract with the fire restoration company to remove debris from impacted facilities in sheds a, b and d.

restoration work, the port granted reentry of tenants to sheds a, b and d within two weeks. port staff worked with 35 licensees to relocate to shed a and pier 35. port staff focused on demolition of the shed c structure and removal of debris from the footprint. the port conducted two-week salvage period including implementation that allowed tenants licensees to access the site.

i like to highlight engineering and maintenances effort and dedication to this project all done within the height of the global covid-19 pandemic. i like to thank our demolition contractor for their safe and efficient operations to clear this site. by late june, the plan to provide temporary space to pier 45 stakeholders was coming together. by july through the incredible resourcefulness of the real estate team, relocation plan for those directly affected by the fire was ready for implementation. the primary groups that needed space included the fishing community. the fishers and processors, and maintenance area and the jeremiah o'brien. staff identified the fleet would need to remain approximately 20,000 square feet including

space for crab pots. the port initially provided open storage space to 15 dislocated from shed c. red and white fleet in san francisco icon relocated their headquarters and administration to the boats. the red and white fleets maritime maintenance was relocated to approximately 1500 square feet in shed a. the historic liberty ship which survived the may 23rd fire was relocated within days on may 26, 2020 to pier 35 for emergency labor. jeremiah o'brien returned from 10 months from the day of the fire. she sits at pier 45 urgently.

simultaneous with relocation efforts, port staff prepared three-phase interim improvement plan to address the needs of the fishing industry and generate revenue at the site. phase one improvements identified here in the blue box were completed in april 2021 and include adding surface treatments to facilitate the area. establishing 8700 square foot maritime storage area, secure with 4 and 8-foot high -- high fences and laying out 32 space parking area. i'm happy to report that beginning may 1st, the first

of these parking permits will be issued. phase 2 improvements, identified here in the yellow box, scheduled to be completed june 30, 2021 and will include installing additional light holes and electrical service connection to the jeremiah o'brien, installing 1200 feet of additional fences and provide physical security and relocating ports maintenance department, operations and maintenance trailer from shed a to the shed c site. phase 3 a.m.i.s remainder of the pier shown here in the green box are scheduled to be completed july 31, 2021. it will include the footprint of approximately 40,000 square feet for general storage to support future construction projects

including the upcoming san francisco police department dock installation, jefferson street projects and potential additional storage area for commercial fishing. i like to hand it over to my colleague to discuss additional work of this ongoing project >> again, president brandon and members of the commission. it's my pleasure to be here and jump in and talk about the insurance recovery on the pier and then go through the pier 45 long-term improvements and shed c replacement strategy. regarding the insurance recovery, the port and the city risk manager have engaged with the insurer and the port was advanced $25 million to stabilize the site and made interim improvements on it. the work being done now is to prepare basis of design which

will help us understand how much it will cost to rebuild what was there including with the required code upgrades. it does not include a study to evaluate other rebuild options. completion of the bases of design is expected by the end of this summer. on to the long-term improvements for the pier and the shed c replacement strategy this was put together by an interdivision team. dominique and i -- [indiscernible] i'm beginning to cover the survey of the fishing industry. which was completed in december of last year. talk about our facilitate summary, next steps going forward. highlight one in particular which will be a resilient

charette planned for next month. the survey conduct the by port staff reached the industry businesses that operate on pier 45 which bring in and process great variety of fish. of the fish processors most have been pier 45 for 25 years. things that came out of the survey was desire for storage space and improved support services include ice making and bake sales, additional office space for fishing industry and more parking for the fishing industry and the findings.

the industry of desire for maintaining shed c for those industry uses. the continued use of pier 45 for the commercial fishing industry. the economic value of the fishing industry, the port's role on pier 45 is one of being the facilitator of the industry allowing pier 45 businesses to interact and bring fish to market. the fishing industry is the primary source of pier 45 revenue where the port participates and receives revenue each step in the process. as fish move from the boat to processors, then distributors and restaurant and market, the product increases in value with each step as does the value of the port participation. the arrangement of uses on the pier aids in this exchange and efficiency of the operation. part of our current role is to

work with the industry to identify improvements to make the industry more efficient and profitable. this diagram illustrates the fishers and the processors and distributors and restaurants point out that the fishers are buying grocery and bait and ice. there's a variety of other businesses and uses associated on the pier. the port prepared a facility summary that looked at the history of the pier, how it's being used and the condition. looked at what we feel coming -- what can come up. i will give you a few take

aways. as part of -- i won't go into great detail, few findings, the shed buildings are in good useable condition with a few exceptions. fishing industry occupies most of the pier and generates most of the revenue on pier 45. shed a and c are not fully used generate less revenue that sheds b and d. public access area are not arranged in a united way that is understandable to the public and not well used. sea level rise is going to play a role. on this diagram at the bottom, the blue line indicates depicting anticipated sea level

rise and the shed title b is wrong. ignore that or insert sheds a and c. if you look on the right side of the draw, the blue line extends, just below that blue line outside of a shed is the elevation of the central valley of pier 45 which is where vehicle circulation occurs. it sits below because it's being built to allow truck dock access into the pier sheds. the central valley little also impactedly by -- impacted early

by rising seas. this condition depicted probably less dramatic way, could occur in extreme conditions today. it's anticipated to occur with greater regularity. to look at the resilience and sea level rise, we will be conducting a resilience charette with port staff and waterfront -- water team consultants. the purpose of that is to look at short an long-term options for this. what we will be doing in coming

years and how this will affect pier 45 long-term uses. the intent of the charette is to add in decision-making. we look forward to providing update of the findings of that for you. it inform future studies and could feed into other development decisions going forward. we also plan to seek stakeholder engagement, reaching out to the fishing industry to review and get their input on preliminary uses and improvements being developed for pier 45. our finance team would further negotiations with the insurance provider. with that, i and others of the team are here to address any questions you may have. thank you for your time.

>> president brandon: thank you, dan, might and dominic. great presentation. now let's open up for public comment. >> clerk: at this time, we will open the queue for anyone on the phone who would like to make public comment on item 10b. please dial star 3 if you wish to make public comment. the system will let you know when your line is open. others will wait on mute until their line is open. comments will be limited to three minutes per person. it queue is now open. please dial star 3 if you wish to make public comment. >> president brandon: thank you. do we have anyone on the phone? >> clerk: at this time, we have no callers on the line wishing to make public comment on this

item. >> president brandon: thank you. no callers on the phone. public comment is closed. commissioner woo ho? >> commissioner woo ho: thank you dominic and dan for this comprehensive report. i want to say, i think you guys done a tremendous job in terms of speaking about it thoroughly in terms of what needs to be done and sea level rise in the next steps. i'm not sure that i have many more questions to ask. only question that i had is looking at the insurance. i know that some of the fishing tenants obviously had problems when the fire destroyed all their equipment. are we insuring that the insurance coverage they're looking at what we're looking at, we don't repeat any lessons

that we should have learned from that incident. is there anything -- i know we're looking at -- discussing it. is there anything that was learned about the fire that we should do differently about insurance coverage for the port and for other partners and stakeholders? >> the good thing about this team, we have experts on every topic. i'm going to highlight nate cruz to address this question. >> thank you, nate cruz from the finance division. it's still pretty early in the process. i think we will keep an eye out for lessons learn the and reshape our coverage and be prepared for a claim in the future. i can't think of any particular lessons that we could apply to any future disasters or coverage

applications. from the finance side, i invite anyone from the real estate team about interim uses or moving tenants around to add to that. hearing none, we'll be keeping our eyes open and learning along the way. right now it seems too early to say anything definitive. >> commissioner woo ho: thank you. >> president brandon: commission er burton? >> commissioner burton: no comment. >> president brandon: thank you. vice president adams? >> vice president adams: thank you dominic and dan. thank you. >> president brandon: thank you so much for the report.

lot of good information. really happy that we're bringing so many different stakeholders together to assess the long-term uses for this property. we haved -- we received $25 million from the insurance. that was to stabilize it. has those funds been used? >> no, that total has not been used. if you need a general amount on that, i will highlight nate for that one. some of it was used for cleanup and demolition and relocation efforts that have occurred. >> president brandon: thank you. >> commissioner nate cruz men. we can get you a more specific number. we only used a portion of that. i'll follow-up with a more precise answer. >> president brandon: as far as

the long-term strategy with our insurance agency, what are we with that? >> that's a timely question. we're in the middle of renegotiating our coverage for the next fiscal year. the city and county along with the port. we renew our coverage on an annual basis. the property insurance market is under quite bit of turmoil because of covid and climate change issues like wildfires. we've seen substantial increases in costs, reductions in coverage. we're exhausting all the possibilities to maintain adequate coverage and economical level. we're working with the city manager on a weekly basis. >> president brandon: thank you. danker thank you so much for this report. really appreciate it. call the next item please. >> clerk: that would be item 11,

new business. >> president brandon: commission ers, is there any new business? i don't think i heard anything. >> no. >> i don't have anything. >> president brandon: next item please. >> clerk: item 12 adjournment. >> president brandon: may i have a motion to adjourn? >> so moved. >> second. >> president brandon: roll call vote please. [roll call vote] >> president brandon: meeting is adjourned at 5:25 p.m. thank you everyone. great meeting.

>> chairman: good morning. this meeting will come to order. welcome to the may 6th, 2021, regular meeting of the government audits and oversight committee. i am supervisor dean preston ton, chair of the

committee. i'm joined is by vice chair supervisor connie chan and committee member supervisor raphael mandelman. the committee clerk is john carroll, and i want to thank sfgov tv for staffing this meeting. >> clerk: in order to protect the public and board members and city employees during the covid-19 emergency, the board of supervisors legislative chamber and committee room are closed. committee members will attend the meeting through video conference and participate in meeting to the same extent as if they were physically present. public comment will available for each item on this agenda, both channel 26 and sfgovtv.org. and there is the calling number across the screen at this time. your opportunity to speak and provide your comment will be available to you via phone by dialing

415-655-0001, following that you will be prompted to enter the meeting i.d., i.d., and following that, you will be prompted to press the pound symbol twice. your line will be muted and in listening mode. when your item of interest comes up, dial star, followed by, and it will indicate that you have raised your hand. please wait until the system indicates you have been unmuted and you can begin your comments. call from a quiet location, to speak clearly and slowly, and to turn down your television, radio or streaming device. everyone must account for delay in time. you may e-mail, my name is

john carroll carol. my e-mail is droid is john.c arroll@sfgov. of course, all of this contact information is available on the front page of our agenda for today's meeting. and items acted on today will appear on the board of supervisors agenda may 18th, 2021, unless otherwise stated. >> chairman: thank you, mr. clerk. please call the first item. >> clerk: item 1 is a hearing on the investigation of complaints on the standard living conditions at plaza east and discussions of proposed plans for the property. members of the public who are interested in providing public comment

should call 415-655-0001, then i.d. 1871614177, press the pound symbol twice and then ## and *3. mr. chair? >> chairman: thank you, mr. clerk. and i received petitions from over 30 of my constituents who live in plaza east, and today at their request, we are holding this hearing. and i'm pleased to be moving forward with this informational hearing to address the current conditions at plaza east, and the plans for the property, both in terms of

the immediate repairs and the longer-term plans for plaza east. our purpose in having this hearing is to honor the request of residents that this be heard, and more attention focused on the plight of the residents at plaza east, and to increase transparency, accountability, and to make sure that the residents of plaza east are healthy and safe. it's also essential, in my opinion, that we recognize and note the significance of housing for the african-american community in san francisco at a time when we have seen so much displacement of african-americans san francisco, and in recent history from the filmore district. sadly, up until now, plaza east has too often been a

story of government neglect, of displacement, and now in recent years with the federal government really abandoning its role in many ways in public housing. the risks and concerns that be can raised with privatization -- plaza east was built in 1956, high-rise-tower-style, and we'll hear more detail from presenters, but wanted to give some basic information to get us started. so it was built in '56. and in 2001 it was rebuilt by mccormick, barrick, and seltzer, who will be presenting today under hope 6, and at that time, the number of units, when it was redeveloped in 2001, was decreased significantly. it was reduced to 163

units. with only 67% of the former plaza residents able to move back in after the rebuilding. in my view, a very troubling history of people being displaced through demolition of public housing and rebuilding that did not accommodate everyone moving back in. complaints regarding the condition followed soon after folks moved back in. there is quite a bit of history going back, but i will say fast forward to where we are now, and after years of troubling conditions at the property, the latest plan that we will hear more about involves, again, doing a demolition. this time with replacement of the public housing units, all of them, but also potentially adding in market-rate housing at the site for a much larger development here. we will get into all of this, some of this i will

touch on now, but we will hear from presenters. but before we get into that, i do want to -- and should i started out just to thank the many brave tenants at plaza east who have come forward to speak out, to stand up for their rights, to demand fair treatment. i especially want to thank resident of plaza east, dennis williams, who is also the founder of "no racism, no hate san francisco," who has work really tirelessly particularly in the last year, but before that as well, to bring to light the issues at plaza east. and i want to recognize and thank martha hollins of the residents council who has been working to improve the lives of tenants at plaza east. and several weeks ago, an

article from the san francisco public press took a deep dive into the living conditions at plaza east. the article documented in detail the uninhabitable conditions, and how residents have complained about a series of housing problems, including leaking pipes, rotting floors, electrical problems, inadequate ventilation, causing moisture and mold to build up, and sewage bubbling up on base boards, and issues with front doors not locking properly, and a long list of other serious conditions that were outlined in the article and are well-known to residents. residents shared that the conditions at the complex really have significantly declined over the years. we know that there are some signs of progress, and we will talk about those as well today, more recently. but i want to say part of

the impetus for this hearing is no resident in this city should be forced to live in these conditions. and i think, and i hope, that we can all agree that immediate action is necessary. some of it is now under way to address the uninhabitable living conditions that the residents are experiencing. in addition to the day-to-day living conditions, there are serious issues around what the ultimate disposition of the property will be. on november 19th, just at the end of last year, 2020, the housing authority ready commission authorized its director to submit an inventory removal application to h.u.d. , for plaza east, which is the first step for the demolition process, and by signing off the plan that involved tearing down and

rebuilding at the site. the housing authority submitted a demolition application to u.s. department of housing and urban development, h.u.d. , for review on january 9th of this year. this would have been the first hope 6 project to be torn down in this city, and the demolition would have been the second time in just 20 years that h.u.d. would have given approval for m.b.s. to tear down and rebuild plaza east, this time with a plan to include hundreds of market-rate units as part of the proposal. since we announced this hearing several weeks ago, several significant things have occurred that i want to touch on briefly before we get -- before we turn things over to our presenters. first we learned that the h.u.d. demolition application was withdrawn. on april 22nd, the housing authority voted to pull the section 8

demolition application. we understand the reason for this was that on march 30th, h.u.d. had informed the housing authority of its decision that the application does not meet h.u.d. 's cost of rehabilitation, and h.u.d. was discontinuing its review of the application. second, we learned that the affordable housing loan committee had recommended, and the mayor's office of housing director had signed off on a $2.7 million loan for emergency repairs at plaza east. so we welcome the decision to invest in plaza east and look forward to hearing more about those plans today for these emergency repairs. and, third, since the hearing, we learned that the property management would transition to a new property management company. our understanding is

m.b.s. remains as the managing partner of the property and will be responsible for the development, but in terms of day-to-day work with the tenants, that john stewart company will be taking that over. that was originally scheduled for may. it is our understanding that that is now scheduled for june. i talked with each of the relevant departments, and my office has been in communication with the departments since that time. and we've received assurance about plans and improved communications with the tenants, as well as just getting clarity about who is responsible for what. there are a number of departments involved, and that is part of why we wanted to bring everyone together for this hearing. i have little question that the media coverage, and our hearing requests, and all of the tenants organizing have brought more attention to the plight of the plaza east tenants, but i also want to say we have a long way to go. i view this hearing as

more of a start than an ending point. i am guided by three principles in this discussion that i view as non-negotiable. i think that, first, the urgent repairs and improvements must be made to protect the health and safety of residents. we cannot have one set of standards for people who live in public housing and one set of standards for everyone else. that is not acceptable, and these repairs need to be done urgently. second, there needs to be transparency and communication with residents along the way, both about repairs and about any re-development plans or proposals. i hope we can all work together to figure out how to better move forward and make sure that all residents are informed and involved about decisions impacting their home. and the third is that

decisions about the future of plaza east must be led by the residents. sounds like a simple statement, but i will tell you that my observations since coming to city hall just over a year ago are that generally that is not how it works in san francisco, particularly when it comes to public housing, that decisions are often made by city hall, by developers, and then presented as a pretty much done deal to tenants. and we need to change that dynamic. and it is hard to do, but we need to do it. the residents need to be charting their own future with the help of the city, not being told by the city what their future will be. with that, i'd like to turn it over to our speakers of we've got a number of them. i have asked them to present on very short timelines here. and we will -- the clerk

will be tracking the time and will give a general reminder when time is up. so we are going to start -- the plan was to first start with the housing authority, whose property it is, and then move to mccormick, barren, and seltzer, their managing department. but my understanding from conversations with the housing authority, that their presentation would be intertwined in the way it might make sense to hand the floor to them both simultaneously for a 10-minute presentation. i would like to do that now. i believe we have audie nicrage from m.b.s., and this team, and the head of the housing authority, dr. qich.

whatever order you want to go, i want to turn the floor over to you now. >> good morning. so thank you for inviting us to today to share about this collaborative partners. the office of the housing and workforce development has been assisting with m.b.s. to schedule the scope of repairs, as well as the mayor's office of housing and community development, providing a much-needed loan for immediate repairs and services. plaza east was selected as a hope 6 grantee in the '90s. and the obvious reason was intended to redevelop the most dilapidated public housing developments in the nation. and as chair preston

mentioned, plaza east was built back in 2001, where residents returned to 193 units, versus 253 units. and this site continues to be 100% public housing, and it is actually the only site that we now have in the city that is 100% public housing. and as a result, plaza east has not received any additional funding for rehabilitation or redevelopment. and over the years, plaza east, like all public housing developments, has received independent physical inspections by h.u.d. , that examine all external buildings to ensure that all systems are up to code, working as intended, and are free of fire and safety hazards. and physical inspectioning are conducted inside within individual units to adequately ensure that all appliances, electrical systems, and openings,

such as doors and windows, are working properly. based on independent inspections by h.u.d. , plaza east had an average score of 85% between 2013 and 2017. i'm not sure why, but between 2013 and '17, basically most of all of our sites were receiving the react inspections, and i do believe it is because the housing authority was really experiencing difficulties with its properties. this rating was 24% higher than the passing score of 60% over that period of time. and these scores were a way for h.u.d. and the housing authority to determine that the property met the required h.u.d. standards. i do believe we all agree the reason we're here today is that we do want more for the residents of

plaza east, and we want more for the children who live at plaza east. and we also want, as a partner to m.b.a., and as the land owner of this property, we want to ensure that our residents have more. it is no secret, as supervisor preston has mentioned, there is great need of repair. we have seen that in the newspaper. it is not a secret to me. i've been here 20 months, and under my leadership for this past 20 months, myself, my staff, along with m.b.s., and working with others, we have actively and diligently worked on solutions for the short-term, medium, and long-term for the conditions. we're highly committed to doing so in a very quick

manner. and we are committed to ensuring that plaza east is re-imagined by the community before a package is resubmitted to h.u.d.. that is one of our primary responsibilities in this relationship, as well, is to work alongside m.b.s. and h.u.d. , to develop the right conditions for plaza east as it is re-imagined with the community. we have met with m.b.s. for replacing broken windows, ground support, and providing additional funding above their stated budget, where the authority could do so. we have also actively participated in community engagement meetings to better understand the needs of the residents and how we might assist. it is true, with 20 years of decreased funding for public housing, not just at plaza east, but throughout the nation, we

realized it has been difficult for this site to maintain its integrity as it relates to its structure. so it is time that we engage our residents and identify viable options that will improve the quality of life at plaza east, and we remain diligently committed, along with m.b.s., to do so. i will now turn this part of the presentation back over to audie. >> thank you, director. and good morning, everyone. thank you, supervisor preston for convening us. i'm joined today by the team at m.b.s. it is myself, i'm senior vice president for development for m.b.s., colleen blackwell, and tony seltzer, and you alluded to some of the history 20 years ago, and we invited mr. salzar

because he had some action. and on the management side, lashonda and jeff are joining us. i just wanted to augment what the director said with three over arching points. number one, we have heard from the residents loud and clear that their living conditions at the site are not acceptable. we've heard residents say that management staff turn turnover is not acceptable. response time is not acceptable. we hear you. and we'll explain today how we got here, and, more importantly, what we're doing to address the emergency repair work that has already started, and the transition management company starting june 1st. secondly, we will talk a little more about the 100% housing sites, and the lack of funding they received from the federal

government, and transitions to hope s.f., or rad program, that the city has engaged in to unlock a lot more subsidies. but last thing, i want to recognize that we're all here for the same reason: to ensure that the residents of plaza east have homes where they feel safe and they can thrive. i know we're all here representing different organizations and have different ideas of how to get there, but we all share this common goal. i'll be sharing information today, but i'll be listening, and our team will be listening, to ensure that we meet this common goal as quickly as possible. thank you, supervisor preston for bringing this today because i know you also share this common goal. with that, i'm going to attempt to share my screen.

can you see that? >> yes. >> for orientation, plaza east, 193 units of family housing, situated over three blocks. overview of the history, some of which was captured by the supervisor and the director, this is 100% public housing site, and the property is owned by a partnership of the housing authority and m.b.s. m.b.m. is the property manager, and property

management at the site will transition to john stewart starting on june 1st. existing conditions at this site, as mentioned, like a lot of public housing around the country, they are historically underfunded. operating subsidies at plaza, since 2008, the property has been undersubsidized by about $1.7 million, and that has given rise to certainly the residents concerns about property maintenance, and the property running on a deficit. the rents are fixed as extreme low incomes, and when the subsidies are inefficient to offset the annual expenses, that's where we get our negative deficit. work orders seem to be more expensive. even though we have had this long, hard history,

covid-19 certainly exacerbated the situation where we had an increase of over a half million dollars in annual expenses from all of '20 and the first four months of 2021, which were mostly water, sewer, and trash expenses spiking because our families were at home and not at school or at work. so the impacts on the residents, again, the average income is e.l.i., which is 24% a.l. i., and that translates 20 about $42,000 a year for a family of four. two parents and two kids, and two parents are making, at the most can make $21,000 each in order to live at the property. so when there is not enough cash coming in, this means we have to cut back on security, on workforce, job training, education services, and other resident services that the residents have been requesting.

so in addressing how to -- in evaluating how to address this, we have mindful of two parallel tracks. the more immediate and high priority track is how to address the growing concerns that residents have about deferred maintenance. in 2020, we hired fineline construction, who is experienced. we have specialists and a general contractor in san francisco to walk through 100% of the units that informed an emergency scope of work. last december we applied to a loan committee for emergency repair funds. this year we met with d.d.i. to discuss how to clear notices of violations. on april 16th, we secured emergency repair funding for $2.7 million to address the repair work, and about 200k to

repairs at the site. this month the repair work has begun. on june 1st, john stewart will take over property management, and we're going to -- we have engaged and will continue to engage in ongoing resident dialogue before, during, and after the repair work is complete. concurrently, what we've been hearing from residents is that there are a lot of structural challenges, problems at the site that cannot be addressed and solved by rehab. and so summer of last year we began to have discussions, listening sessions with residents, to talk about re-imagining plaza east to talk about what is missing. with the bottom line principle that one for one replacement housing is guaranteed. what we heard from them over and over was safety concerns about a small alley on one of the blocks

where a lot of the residents feel not safe. ongoing infrastructure problems and a lack of social services both on site, both in the physical spaces, and certainly the funding available to accommodate services. and so as we think about the housing, we think that this is, you know, again, a guarantee of one-for-one replacement housing. and to potentially increase the amount of affordable housing onsite, create new amenities, and a more thriving community integrated into the neighborhood. the goals of the financing, most importantly, will be to increase the annual necessities flowing to the property. we're exploring programs with varying levels of subsidies, and we need to reflect the h.u.d. goals that they have. with that, i'll turn it back over to the director to cover the next two slides, please. >> two minutes remain on the clock.

>> so the housing authority in this city, we had to create that the current funding streams would not be sufficient to maintain the existing plaza structures over a long-term. and so we began having discussions with h.u.d. about how we could best receive 100% financing around a new concept of re-imagining plaza east. and the goal has always been to do that with the residents. in november, we brought that particular process to the housing authority commission, which approved it. and then in january 2021, we submitted the application on behalf of m.b.s. to h.u.d. to move forward.

in march 2021, that particular package was discontinued, and we -- through that process, we had back and forth with h.u.d. and began to correspond and discuss what could we do to potentially secure the future of plaza east in a way that would be revitalizing the community at large. one of the potential avenues we have is the rad blend, which provide us with 80% of our incorporates being funded at 100%, and 20% at a rad mechanism, which is all tremendous by h.u.d.. and one of the great things about the rad blend, at the time we were doing the second 8 application, it was not available.

with the rad blend, there is no screening, and there is absolute right to return for all tenants, which is really important. and it is consistent with the rad program that is here at s.f. today. >> that's the timer, mr. chair. >> chairman: thank you. do you need a couple more minutes to go through -- >> yes, please. as it relates to the tenant council leadership that has been mentioned, the role of the tenant council is to improve the quality of life with residents' satisfaction. and it is to uphold the federal regulations that directly forms this particular council onsite. it is typically -- it typically seats a president, vice president, treasurer, secretary, and sergeant-at-arms. their name must be on the lease, and all voting members of the resident

community must give sufficient notice for nominations and elections. so it really is a formulated body that has a set of regulated rules by h.u.d., and it requires a third party. and the tenant association or council really is a way to ensure that residents have a right to organize and select a council that represents their interests free of s.f. h.a., if you will, and this is at all public housing sites. >> thank you for the extra time, supervisor. we know that the residents are not a monolith, but we acknowledge them as leaders of the community, and are proud of our relationship with them.

here is just a list of meetings were had since last summer with resident council and with residents, and we can speak more to these meetings and the content shared during the q and a session. here is a list of the tenant council leadership, martha hollins as the president, tray walker, sergeant-at-arms, and chris mccoy as well. just two more slides, supervisor, if that is okay. a quick summary of the timeline. in november, fineline began to work through units in preparation. they initially walked through a portion of the apartments and the mayor's office of housing suggested, and i think appropriately so, that they take the time to go back and walk through all of the units, or as many as possible, in order to inform the appropriate scope of work. and, again, in november, they approved the section

18 application. on december 28th, we submitted our application to the loan committee for $2.5 million, based on this fineline 20% walk. in january, we submitted our section application to h.u.d. in march, we had conversations with h.u.d. to discontinue our section 18 application, and then soon after had early discussions with them on the rad blend program, which is very new. it launched in january of this year. also in april, we received loan committee approval and had a community kickoff meeting last week with the residents to inform them. and other repair funds, the property repair and social services, also. this month we're meeting with residents on the repair work, which has already begun. social services has begun,

as well, onsite, which we can speak to more later. and we'll begin resident meetings for the revitalized plaza east. june 1st, john stewart will take over for property management. and we'll have discussions with h.u.d. on how to increase resources. starting in july onward, more ongoing meetings with the residents and the new manager, and continued input on the future of plaza east. so that concludes our presentation. >> chairman: thank you very much. and i'm going to hold questions at this time until all the presentations are done. we have a number of departments and individuals we're hearing from. so please stay on. and we'll have some questions for you. next i wanted to -- and i do want to note we -- i did speak with

ms. hollins. the residents' council invited her to speak. her preference was to call in during comments. next up, i want to turn it over to filon highland, and she has worked with public housing residents around the city, and many of the residents at plaza east. mr. hyatt? >> thank you for this, by the way. this is a quick introduction for me. so i work with tenant associations and tenants under h.u.d. all across san francisco, and i've also been trained nationally on the east coast with tenant associations and other h.u.d. buildings. just to kind of move into

this real quick, i have an extensive knowledge of working with tenant associations and tenants under h.u.d. one of the things i commonly see are a list of questions i'll pose to you all, which centers around who makes the decision on behalf of whom? what happens when the key people are left out of that decision-making process? and what happens when decisions that directly affect tenants, are made on behalf of tenants, but without those tenants included in the decision-making process? i want to make this next part very clear when i say that. having to -- to put it bluntly, having a minority of tenants on a property, who are literally assembling for the first time to communicate with you does not qualify as tenants actively making informed decisions and consentual decisions to their future. in addition, you know, putting tenant associations, which usually -- usually -- have very little contact with

the majority of the tenants in a place to represent all tenants for major decision-making processes is also, in my opinion, and usually what i usually see with other tenants, to put it bluntly, rather problematic. i just want to also say on this right here, to try to smooth this a little bit, yes, we do have the common goal, and i appreciate you all naming that, and the goal is being met under very strained conditions. yes, there has been decades of defunding with h.u.d. this is, by no stretch of the imagination, an easy process. i'm only here to push the narrative that time and time again, we often site -- or management often sites that there has been, quote, unquote, outreach, meaning that fliers have ended up on

doors. and there is a, quote, unquote, listening session of some sort. but that is not tenants' participation and negotiating and determining their future. and i'm saying that simply because i've seen this time and time again, in which there has been some arrangement that has been made by members of a tenant association, and two years down the road, when development really starts to kick off, to make sure everything pencils in, those arrangements shift. and it is usually at the detriment or loss or the utter confusion to the tenant association or the tenants. i really want to try to communicate that when community -- when tenants, as community, are censored, which is the utmost property of city and government agencies doing this work -- when communities are censored, the decision-making looks

different. as of right now, i can safely say there is to infrastructure in place for tenants to actively, collectively produce their needs, or collective needs, and enter into proper negotiations with property managers or city or h.u.d. at this time. tenant associations don't qualify for that. even though they're the first people, the first line of tenants that are thought out to get approval of, like, major projects. for me, there is a need for real organizing, for tenants to collectively advocate for themselves. what i mean by that is, even as you put forward, you know, the meetings that took place, i always, like, push back against

property managers. how many tenants were paid to be there, for example? there is a power dynamic that is at play, which it is the responsibility of the property manager to undo that power dynamic at play. but to end the relationship between property manager and tenant -- oftentimes the property managers will put the onus and brunt on tenants to simply show up with due diligence, week after week, to put that type of work in, even though they're not resourced to understand the full breadth of what is about to happen. they don't have access to architects and engineers. in your view, can you speak on this issue and do you like this or not. [buzzer] >> how much time is left? >> chairman: that's five minutes. if you need a minute to wrap up, go ahead. >> just a minute to wrap up. i honestly want to say to avoid displacement, sto

tohave a smooth transition in which tenants can live, and to avoid displacement, there needs to be reinvestment in community-building and community infrastructure. and time and time again, as they have happened across the nation, if there is no focus on community, then over time the community suffers. i'll end with that right there. >> chairman: thank you for sharing your perspective, mr. hyatt. and i think we will go next to the department of building inspection. i understand we have mr. brahona. i'll turn it over to you for five minutes. >> good morning, supervisors. my name is luis brahona. i'm with the department of building inspections. derrick mar is the housing

inspector that has been assigned to the western addition, pacific heights and the arena. and i'm his senior inspector. the san francisco housing code establishes and maintains a minimum standard for over 400,000 san francisco tenants. we verify and write up complaints. the owner is responsible for conditions on the property. we as housing inspectors do not make repairs. in 2007, d.b.i. entered into an m.l.u. with the housing authority, in which we agreed to supplement the san francisco housing authority's inspection offices at san francisco public housing sites. per the m.o.u., d.b.i. inspectors respond to complaints at plaza east, an issue notices of violations when verified. generally speaking, most of the complaints we have received from residents have ranged from

significant water damage to items like broken appliances and damaged flooring. according to our complaint tracking system, there have been about 35 housing complaints from tenants at the plaza east in the last 15 years. there are 19 recent complaints regarding plaza east that are still open or have been closed in the last year. of these, seven we had initial contact with someone at plaza east, and then for whatever reason we have not been able to gain access to conduct an inspection. and usually that entails calls or we tried to get in touch with them and haven't gotten a call back to set up an inspection to schedule an inspection to go in. four of these have resulted in orders of abatement. two which we have scheduled re-inspections, so those could be abated following those inspections. we have four fully

corrected and four that are still in our enforcement process. three have been partially corrected. plaza east has had some particular challenges associated with it. there are multiple streets and addresses associated with the property, making it difficult to properly track violations visit the development as a whole. we're often unable to make, like i said, contact with residents after they filed complaints. in order for us to issue an n.o.v., we have to gain entry to the specific building, and if they cannot, we have no way of verifying the complaint. there has been a lack of communication. there has been a communication breakdown between the tenants and the property management. an ideal scenario is that the property management and the tenants should be working together to get an issue fixed. this has not been happening. until last year, we did not really have a reliable contact from property management. i'm working with

supervisor preston's office to see the response really improved. once management designated a point person for the property, for addressing housing complaints, their response has greatly improved. since property management has been more responsive, we would encourage tenants to file their complaints directly with property management as the code intends. we understand that the $2.7 million loan will also fund new resident services. we look forward to working with the new service to ensure safe and inhabitable living conditions. as you've heard from m.o. a. staff, requires the property own to abate any (indiscernable) to receive the affordable housing funds. our goal is to ensure that residents at plaza east

are living in safe housing units. and that's my presentation. >> chairman: thank you. and finally we will turn to hear from lydia and amy for up to five minutes. >> good morning, supervisor preston and members of the public and other members of the committee. i'm lydia eli, and i'm the deputy for housing m.l.c.d. , and i just have a few slides to share. but i hope to be able to put up right now, just explaining our role on this particular project. i'm sorry. he it comes.

please let me know if you can see my slides? >> chairman: we could see them. >> okay, great. up until now, plaza east has not been an mocd project. we look at unit conditions and affordability, but because we have never made a loan on plaza east, it was not in our system to be monitored. we have, however, over the years had kind of light touches on plaza insofar as this part of the housing authority portfolio that the city, as a whole, and mocd has been supporting mostly over the last 10 years to stabilize financially and

to move most of the projects from the public housing platform, which folks have acknowledged is a very unstable funding platform from the federal government -- move those projects into the section 8 platform. that's what we did with rad. that's what we've done with hope s.f. and other hope 6 projects that are owned and managed by m.b.s. mocd has provided loans over the last year to repair and stabilize those projects. but plaza east, we have not been involved in yet until now. so we learned of the need of repairs in december, when the condition inspections were going on as part of the section 18 application. and i guess that's when it first came to our attention that the needs were quite dire. so coincidentally, we were

on another project, which was another hope 6 project, and because of changes to the federal tax credit program, all of a sudden there was a windfall from that project, and we pivoted with those funds and directed them towards plaza east. so we put together a loan evaluation that we ran through our peer review and credit committee process, and it went to our citywide affordable housing loan committee on april 16th. it was recommended for funding by that committee. we're closing a loan right now, and repairs are starting on monday through the notice to proceed process that we run. you'll see on this slide what the conditions are for our loans. in anticipation of some kind of revitalization or rehabilitation, or rebuild, we hope to be repaid, and we expect to be repaid with any proceeds that come out of that project.

so we have also imposed loan conditions, when the citywide affordable housing loan committee af approves the loan. you'll see that most of these are related to the scope of work and the pace of work that will be taking place over the next year. as folks, i think acknowledged, there were 20 units -- at the time of the loan committee, we did not have a scope because residents did not invite inspectors into their units. we want to see final scopes of work and we want to see before and after photos. and then in a slide or two, i'll be showing you kind of what our typical menu of monitoring and enforcement functions are during cross-examination. const. but these are the loan conditions in the loan approval. and we'll be asking for a

monthly report updating us on progress. that's a written report. we had a question about property management and what our role was in the change of the property manager at this site. typically mocd requires projects to let us know of any change in property management. however, as i said before, we don't have a loan on this project, so that change did not come to us. we are, however, very aware of the fact that m.b.m., which is mccormick ben management arm has been ending its property management function for a number of former public housing sites in san francisco, including the hope 6 project, so that has been kind of taking place over the last couple of years. i think plaza is the last one to make that transition. so our role during construction is quite involved. this is our typical kind of scope of services that

we provide when we administer a construction loan. >> chairman: thank you. if you need a couple of minutes to finish up, go right ahead. >> okay. i think all of the information is here on the slide. you see we approve, on a technical basis, all of the construction applications, which include typical industry lien releases. we approve every single change order. we hold on to 10% retention from each draw to kind of enforce performance all the way through to the end of the project. we also have a new rule during covid of really making sure that the projects, especially occupied rehab, are complying with safety protocols that we developed with c.p.h. and then as my colleague from d.b.i. said before, we won't sign off on the

project if there are any outstanding notices of violation. and we -- i think when we looked at it, there were 22 open m.o.v.s, but that is something we'll keep looking at. and then we close out the project, and that includes financing and final inspections, and we attend in-person meetings and site walks. that concludes my presentation. >> chairman: great. thank you. supervisor mandelman? >> thank you, chair preston. so to this basically $3 million is for the most -- ff the most egregious notice of violation generating issues. i am wondering if you can describe what we're getting for our $3million,

and how that $3 million price tag relates to what we think are the actual needs. regardless of a new project or a significant change, if we were just going to get this project operating the way people anticipated it would 20 years ago, what's the difference between $3 million and that? >> thank you, supervisor. those are great questions. so the first question: what is our scope of work? well, we followed our rad kind of establishing a hierarchy of needs, because as you acknowledged, we can't do everything that needs doing. our top priorities are life safety. so in this case, the fire alarm systems and repair of the sewer laterals because the sewer and

plumbing problems are posing life safety challenges. after life safety, we look at building envelopes. in other words, is the roof sound? are the windows sound? is there water coming into the building? next we look at -- >> there presumably -- some of the roofs are not sound, and, yes, there is water coming into the build? >> i think in this particular case, our scope is not so much focused on roofs and windows. i can tell you that we are doing, as i mentioned, fire alarm upgrades in every single unit. repair sewer laterals, and we're doing some electrical work that we consider to be life safety for obvious reasons. our next kind of item on our triage list is in-unit repairs. so understanding that often these repairs are more cosmetic.

they often, in this case, seem to become almost life safety concerns in and of themselves. so we'll be doing flooring repairs, especially where there is a trip hazard, appliance replacement. there are some window replacements. wall heater repair and replacement. so a lot of different work. and, again, we've established the scoper unit, and i think we have found quite a variation in the need by unit. i think our lowest-priced scope was $500, and our highest is about $40,000. i think we're seeing about a $6,000 per unit cost. let me just give you, for some context, what we did on rad. when we went and did the rad rehabilitations and capitalizations, our goal as required by h.u.d. was a 20-year use of life.

we needed to do what we had do to do make sure the unit will be in use for 20 years. our lowest was $80,000, and our highest was $200,000. >> and the rad projects on average were how old? >> the oldest one was from 1925, and the newest one was from 1991. >> all right. >> so this is obviously -- you know, as we called it, it is an emergency scope of work. it is not intended to position the project for many, many years of continuing function. it presumes a more ambitious and comprehensive plan that is not yet determined, but obviously is knead. needed. >> thank you. [please stand by]

>> because they were so new, they didn't need any rehab. so this is the last of the bunch, and again, i think the reason it has [inaudible].

that means, they had acknowledged that the repair needs were beyond -- it was not cost effective to -- the projects were not cost effective, and the rehab needs were so extensive as to warrant a demolition approval. now as folks know, we never did demo the projects. i just want to say that section 815 demos do not always result in demolition. it can be a financing -- section 8 demos do not always result in demolition. it can result in section 8

housing going forward. we were not involved in the section 8 application. i've never seen it. >> chair preston: you mentioned a monthly report that you'd be requiring as part of the loan essentially oversight of those funds. would that be or will that be a document that can be shared with interested committee members? >> yes.

>> chair preston: okay. great. and were any prior monthly reports regarding prior repairs presented to you, and i'll ask the same of [inaudible]. i understand you sit in a certain role with respect to this new grant, but i'm interested, prior to that, whether there were similar reports being provided by -- i presume by m.b.s., if there are such reports, to you by any authority and whether you have any such document? >> right. again, because we're not a lender on the project, the project does not have any reporting obligations. so if they did, they would submit an annual monitoring report, which is a complex kind of affordable analysis document

which also affects evictions and a lot of other data, but they've never submitted one because they're not an owner, and they would never deal with evictions, and we've never received any reports from them until now. >> supervisor preston: right. and in terms of the current work plans, which are being done when? i've got some different things around when the actual work is started, and the initial claim i think some of the tenants were told at the beginning of may. so is that work underway, at what pace, and who is monitoring what is being done, and not -- i don't know the extent to which you're the right person.

i don't know that we can hear from others, but i'd like to hear from mohcd. >> yes. we are the entity with the issue to proceed, and we have a lot of quality control derived kind of requirements and insurances and all the other things that you can imagine would be wrapped up in a construction project. i confirmed with our project sponsor and confirmed that the work would be starting this coming monday, which is the 10. in terms of the scope of work, you may have notices in one of the loan conditions, we're going to be continuing to work with m.b.s.' team contractor to shorten the timeline for the work. right now, the plan is to look

on two units at a time, so we're working with the owner to make sure that particular needs of individual households are being met. if i can ask about the m.b.s. about the status of that because it's been a couple of weeks ago. >> yes. go ahead, mr. [inaudible] if you just briefly want to give us the update on has the work on units started or is it starting on monday? what's the update on it? >> yeah, so the general contractor is preparing the site. before we go into occupied

units, we want to lay out the scope of what would be done and what would not be done. some folks who need cosmetic repairs would be out for a couple hours, and some folks who need more repairs would be out for a couple of days. so i see that pauline is on, as well. i don't know if you have anything to add to that, as well, pauline. >> supervisor preston: and have all the residents of plaza east been notified in writing that when the work will commence and the schedule? >> yes, and pauline can add a little bit more to that.

>> so we held a meeting last monday for the manager change and the resident services team that will now be able to support them through this process and communication to make sure that families are supported. we're hand holding everyone all the way through, and also, this week, we sent out a letter to everyone who may have missed those meetings. we are working with meetings for the first families next week to talk about, as audie mentioned, everybody is going to be specific on what they need. our first meeting is scheduled for tuesday, and once we understand what their individual need is, we'll be working with them and find a space for them to be safely under covid measures for a couple of hours, or, with families with more extensive

repairs in their units, that they can be relocated for a few days while the work is being done on their unit. >> supervisor preston: thank you. and have all the residents been notified of the new date on which that will commence? >> that's correct. we have someone manning a phone if anyone has any questions and troubleshooting branch of which teams to get a call on a daily basis so that we have a rapid response system. and all of these updates, it's all part of our goal to provide better services to the residents, better response times, and someone is there to always answer questions, and again, just supporting residents at a better pace.

>> chair preston: thank you. let me just say the importance of updating folks and the addition of community meetings. even if the few weeks that we've been talking about this hearing, there have been shifts of things, which i think, from your perspective, but it doesn't necessarily immediately get to tenants, but when there's a change, for example, the property construction is going to start in may, and then, it's going to start may 15, and then, it's going to start june 1. i can't emphasize part of beginning a new chapter here and restoring trust and confidence is going overboard with the transparency.

i think mr. hyatt was getting on that, and just the more we can do that when things evolve -- it sounds like it's starting to happen more, which i'm really pleased it's happening. i see that supervisor mandelman has a question. >> can i just add, as part of that robust plan that we're implementing now, we're also bringing a text messaging system to plaza east for more rapid communications. again, this is utilizing the resources and tools and how residents are using cell phones and not just letters, so we are

expanding our ability to communicate with residents as we get more resources built up with more of the supports at hand. >> chair preston: thank you. supervisor mandelman? >> supervisor mandelman: actually, i have more questions that i could ask mohcd, but if we have presentations, we could get more presentations on the next slide. >> chair preston: i should mention that we do not have more presentations. we have heard all the presentations, and so feel free to go forward with your questions. >> supervisor mandelman: okay. i think this is a mohcd question. so -- and this is -- i think the operating dollars for plaza

east [inaudible]. >> thank you, supervisor. i can speak to that and invite my colleagues from f.h.a. to chime in on the details, but yeah, essentially advising wherever possible, they should move their public housing out of the section 9 platform and into the section 8 platform which is more robustly funded and has more support in court.

there is really no public housing left out there except for plaza east and what we call the scattered sites that are also going through a conversion process through the platform. we are not demolishing units funded through mohcd.

>> we've been kind of ahead of the curve, and for the portfolio, for the 3500 public housing units, we put $135 million for those housing units, which is actually a great deal for the city, considering how many units it is. >> supervisor mandelman: and my recollection is, this using safe section 8, it started with the hope six program, but i guess not with plaza east. >> right. so i think plaza east and the bernal dwellings, which two of the six -- the hope six projects that relied only on public housing funding, there were no section 8s mixed in there.

some have a workforce housing requirement [inaudible]. >> supervisor mandelman: -- pay regional reserves and things like that. >> that's correct. >> supervisor mandelman: well, thank you for that refresher. thank you, chair preston, for calling for this hearing and starting this conversation. i am, you know, saddened, disappointed -- not at anyone here, really, but this 20-year-old project has not stood up as well as some of the 20 century public housing projects that were done. it is sad to me, and the theory

behind, i think, sort of the hope six reenvisioning 20 years ago -- there were lots of views why public housing failed. housing was too dense and public housing was too crappy, and the public housing sector couldn't possibly operate public housing for people in an effective way, so we really needed to get these developments into provide hands and have them operated by private, you know, operators that would be able to do what public sectors have not been able to do, and there is a little bit of me that, you know, two years later, plaza east is already kind of falling apart. i mean, there was some useful analysis in 20 century public housing. probably it was too dense, and

the not enough rental payments to keep the housing up. but fundamentally, the problem was not enough operating subsidy from the federal government, and that is why the 20 century public housing -- in my view, the 20 century public housing efforts failed, and at the end of the day, we need the federal government and/or someone to be not just putting up fancy new buildings every 20 or 30 years but actually to be funding those buildings, whether it be a for-profit operator, a non-profit operator, or a government operator, and we need to think about those, chair preston,

particularly as we move forward. this is a sad and sorry chapter here in the saga of public housing. any way, thank you. >> chair preston: thank you, supervisor mandelman. i did have a couple of questions about the longer term plans here, just starting with the grant committee that you spoke to earlier, the assumption is it is the revenue ultimately from a reimagined or revitalized or whatever we want to call it plaza east that will one day pay for that. in deciding to make that loan,

what representations were made -- what is your understanding or the committee's understanding of what the longer term plan is? is it a demolition or some or all of the east? is it a certain unit count, a certain income mix or was the loan issued without that knowledge? >> thank you, supervisor. so the loan was issued without that knowledge -- or loan evaluation on the details on what the revitalization will be and when it will happen are just not known. understanding that the section 18 application to h.u.d. is looking at options. what kind of options would be available if section 18 is pursued is kind of the first step, and the answer to that

question, you know, could have helped drive the community process and the feasibility analysis. with h.u.d. rejecting that, the team has gone back to the drawing board and the team is looking at other options, this r.a.d. -- kind of the twist-on r.a.d. that was issued at the end of december, 80% -- you can get section 8 on 80% of the units. some of the questions now are can that be used for a rebuild or can that only be used for a rehab, so i think that -- the team is looking at those options. we're not -- we've not been pulled in on kind of the feasibility issues, but i imagine we will be once there's more of a plan. >> supervisor preston: thank you. and to dr. [inaudible] and the housing authority team, so at

the time that the housing authority commission signed off on or approved the section 18 demolition plans, i just want to get clarity. like, at that time, was the plan to demolish or was this -- sometimes, these applications can move forward whether or not there's a plan to demolish. this is something we arguably try today get clarity on, and would love if you could clarify the time that was approved, which is, you know, quite recently. was the plan to demolition and -- and, also, what was the plan with respect to what units would be there after demolition. >> sure.

thank you, supervisor preston. so at the time we submitted the application, it was a matter of submitting the application and being able to have a path forward. the path forward had not yet been preprescribed and designed. it was a matter of going through the process and describing what needed to be done, and all of that work needed to be done with the community. >> chair preston: i really want to get clarity on this because it's not been clear to anyone else, and it's not been clear to me. if that work had been approved, was that housing authority commission -- if they were approved, were they to move forward in approving a

demolition plan or approving a -- >> definitely. >> chair preston: i don't want to put words in your mouth, but i would love to know which is the first? >> again, it's a first step as miss healey even describes. there were section 18 applications approved, but there were other things done in the process. not all of those locations were demolished, but it is definitely a first step to determine what kind of financing is available, and what kind of financing can we speak about with residents because you have to be able to begin the process. i'm sorry. >> chair preston: no, go ahead. >> and at the time of going through this process, you really had two choices. that was the section 18

application or the traditional r.a.d. in the middle of that process of requesting h.u.d. saying we want to discontinue the section 18, we now have this new program called r.a.d. blend, and even with the program, the r.a.d. blend, there's still the option, do you decide to only rehab or do you decide to do demolition? and really, with these two processes, they are defining mechanism. the section 18 gives you 100% financing at the higher level. the r.a.d. blend gives you an 80-20. 100% of your units are funded at 80%, and 20% is at that r.a.d. rate, which is lower. and then, you have straight r.a.d., which is that lower rate of however h.u.d. decides to calculate those dollars.

so the best value in terms of a funding mechanism [inaudible]. >> chair preston: i think you just froze. go ahead. >> i apologize, sir. the best value is the 100%. the second is the 80-20, and then, the third is r.a.d., which has a certain way of how it's calculated. as we've all been discussing, when you're funding at a lower rate, it presents some real challenges when rents are stabilized at a certain rate, and then, if you have the option to have a higher rate, you're creating sustainability no matter what you decide at the end with -- in a

cooperative manner. >> chair preston: yeah. i think thank you for sharing the information on the paths, but i still have a question. it seems like the ways that the various agencies are presenting and that m.b.s. has in the past, as well, is -- let's just focus on housing for a section. an application for a section 18 of demolition at plaza east was submitted and approved by the housing authorization commission, that that does not mean that the housing authority

has approved any demolition. am i reading that wrong or is that the position of [inaudible]? >> that's our position. it's about a funding mechanism because all of the projects that have gone forward in home six, hope s.f., it is about community engagement and involving the community and what is this community going to be and look like? whether it's a rehab and you're knocking down a portion of something or you're knocking down everything, it is really strictly looking at the level of funding that we have available to us to do any work? it's very important, the funding mechanism because public housing, we all know this, is traditionally underfunded. we are moving out of the public housing business to the section

8, our funding choice program, which is a higher subsidy, and also provides an opportunity for community services that residents need, and on and on and on, and those dollars can't come through a public housing mechanism. >> chair preston: thank you. and what i'd like to do, i think this is just a practical point is if decision has not been made, right, around future demolition, then, obviously, there's a window of chance around resident involvement in terms of making that decision, then, if that decision has been made. what i would like to do very briefly is just confirm with each department and to the developer what i think you just stated, which is whether there is or is not currently a plan to demolish, right? and then what i'd like to do is

move to public comment because i know that we have some public comment. i know we can discuss this all day, but we have some folks that are waiting. if you could just simply confirm or tell me otherwise, let's just -- i think we've heard from housing authority and heard from mohcd, so for m.b.s., is -- is there a -- from m.b.s.' perspective, is there a current plan that involves demolishing some or all of plaza east? >> so i can take that. no. we are going to engage with the residents, on what this looks like for plaza east. we meet with you last year, and

pauline and i appreciated your availability. you say in the application over and over that the future plaza east will be based on the residents and what they want. you urged us to put that in writing and put a letter together for the residents essentially saying we're applying for h.u.d. no matter what we say, basically, the future plaza east is in your hands, and i appreciate that advice. it was really good advice. so what we did was drafted a letter on [inaudible] 13. danielle banks' group drafted a letter that said just that, to the residents have that in writing. we can share that back with everyone here. no matter what we represent to the feds in order to unlock

additional money, the future of plaza east is in their hands, so i appreciate your comment on that. >> thank you, mr. nagraj. given the neighborhood of plaza east, it's just to impress upon folks is there's a bit of a cognitive disconnect. we're applying to the federal government for a demolition. i'm just saying for the public, not just for residents of plaza east, but for the residents of the entire community around the plaza, that that requires a pretty high level of

communication to dispel what is a commonsense conclusion that people reached. >> yeah. i think the title is demolition, demolition disposition, and i think that when you don't remove, and you just refinance through r.a.d., that's the disposition. but i agree, it's a term of art, it's an insider term, and it's hard for a lot of people to understand. >> chair preston: let me ask one more question of you, mr. nagraj, before we go to public comment. it's been asked that the project is losing money. you're not taking a public community stance, but you all are not a not-for-profit entity. like, how does m.b.s. -- and

i'm not talking about exact number, but what is the pathway here that m.b.s. sees to not losing money on this property, in fact, i'm assuming, to earny more money on the project? >> well, i do see tony salazar is on, and because you're asking about kind of the larger mission on [inaudible] tony, could you start, and then, i can answer specifically for plaza? >> sure, i can start, but it's -- it's -- supervisor preston, let me just take one minute to talk about how we got here, and that would be helpful. we stepped in as the developer of the housing authority. they prepared all the plans, demolition, occupancy, and everything that went to h.u.d.

for their approval but had to get city and resident approval prior. and h.u.d. awarded the city $35 million of an hope six grant for this project, but just before closing, h.u.d. did not allow the authority to act as a subdeveloper, so the city asked us to step in, so we stepped in and assumed the role of the developer, and that's just because of our public housing expertise. we are experiencing a transformation. we've done 31 hope six developments, 14 choice neighborhoods, so we know this very well. this is part of our mission. this is what we do as a company, and so prior to stepping in, we went to the city and h.u.d. and residents

and made sure that they were supportive of this plan, and we came in and stepped in as a pat ner with everyone -- partner and everyone, and we're not stepping away. we do developments, but we're not in the building and selling trade, we're in the long-term business. we're a 50-year-old company whose social mission is to rebuild urban cities and create viable housing for families that need it the most. so we're not walking away. even though, you know, we've not made money on this development deal, we're not taking a management feed, we're part of the solution to right this ship and to restructure this development in the right way because that's the business that we're in, and h.u.d. would not be working with us on this,

housing partners would not be working with us in other cities if we were not doing the right thing. and right thing here for us is making sure we restructure this development in the right way. so yeah, we came in as a partner, we're staying as a partner in the right way. and even if we don't make a dime on this, that's okay because we're a partner on this, and a partner with h.u.d. and the housing authority, as well. >> chair preston: thank you. and will the project include the addition of market rate housing unit? >> you know, we're evaluating all options because we know what we build around the country are driving mixed-income communities. we know that housing costs in

san francisco are the highest in the country. we think that there's an opportunity to add tax credit units, but we have not evaluated the h.u.d. kind of the value of the subsidies and the r.a.d. program. this is going to be a tenant-led initiative. meetings are going to be starting this month and we're evaluating all options, and nothing has been confirmed or denied yet. we're in the beginning process of the revaluation process. i would say we've paused on this in the last six to eight weeks as we frankly spent a lot more attention on the immediate repair needs, and we see this month kind of moving back towards looking at the future. >> chair preston: thank you,

and i appreciate you [inaudible]. i think that it's one thing to keep options open for funding and the decisions around them, but it's another thing to make them, and there's clarity around decisions that have not been made. thank you, mr. salazar, for weighing in, and let's go, mr. clerk, to public comment. >> clerk: thank you, mr. chair. we're working today with james smith for department of technology to bring in our public comment callers. for those who are watching our meeting on san francisco cable channel 26 or via streaming link on sfgovtv.org, please call in now by following the instructions on your screen. that would be by dialing

415-655-0001. following that, enter the meeting i.d. is 187-161-4177. press the pound symbol twice and then star followed by three to speak. for those who have already connected to our meeting via phone, press star, three to speak to this item, and for those already in the queue, please continue to wait until it is your turn after you've called in. the system will prompt you when it's your turn to speak. mr. operator, could you bring us the first individual who wants to speak to item one? >> good afternoon, commissioners. joyce [inaudible], chairman of the housing association. thank you for explaining what's behind plaza east, and if i'm not mistaken, when they lost

units it's because they added big ones. there were quite a few one bedrooms that were not conducive to the residents that were waiting at the time. as a leader, not just of -- with public housing but of the city, i want to understand what this man's talking about when people for the tenant association meeting with the t.a. the t.a., the community elects the tenant associations and the councils to represent them because everybody can't be at all of those meetings, and it's really difficult to get a lot of participate from residents when you're just volunteering. there's no money, there's a small participation fund to have a meeting. other than that, everything that martha and i have done for

years is volunteer. and many of those residents appreciate martha because they elect here. that board is duly elected. i think maybe one person is elected. but if you want to know more about tenant associations, i suggest you read the code of regulation and see what's required of the city and everyone to recognize them as duly elected. anyone can run as long as you're on the lease, and outstanding means no violations, pay the rent, and 18 years of age. you don't have to have a ph.d. to run for office. so, you know, don't put down those people like me and martha, and people that are volunteering. all we want to do is see the

community better. >> clerk: thank you very much, mr. smith, for your comments. mr. operator, would you bring us the next caller. is there a caller on the line, ready to go? call you are, if you've just heard your line is unmuted, that means it is your turn to begin, otherwise, we'll have to come back around. caller on the line, we are on agenda item number one, and now is the time for your comment to begin. >> hello. >> clerk: yes, please begin. >> my name is victor jones, and

i am [inaudible]. i know that place back and forth. i know where i was yesterday

and years ago, that i was very, very proud to say that when we come together as one and what we can do, we need to speak to that [inaudible] to go back and forth to the situation, i just think there's a plan that needs to happen. they've got [inaudible] and the ones that need to work can be a part of the plan, and i know that for sure because i haven't found that. so i just wanted to say --

>> clerk: thank you, victor jones, for your comments. mr. smith, could you bring us the next caller, please. >> hello? >> clerk: hello, please continue. >> can you hear me? yes, can you hear me? >> clerk: yes, we can. please begin. >> okay. thank you. hello. my name is neola gassing, and i am with the public tenant housing, phta. i'm very pleased to hear that the repairs on the plaza east units will begin pretty soon, but i just want to express that their participation at tenant councils be recognized and be table at all times during this

repairs and when the process starts, the demolition. right now, they're under the code 24 cfr 964, but when they're converted under r.a.d., their code will be 24 cfr 295. so if you can keep that in mind, it will be very, very good, and you'll understand why it's so important for resident councils to be involved in this process. thank you. >> clerk: thank you very much for sharing your comments. mr. smith, could you bring us the next caller, please.

>> hello, hi. my name is danielle banks, and i am calling in on behalf of the resident services that going on at plaza east. i just wanted to say just a few things, you know. as my involvement in the western edition community -- well, basically, i grew up there. and when i came back when i -- from college, my commitment to my community was very important. i started an organization called [inaudible] and we just entered our ninth year. but doing the work with the youth, you have to think about what happens when they're no longer with you, working with our team. so it became very clear, when young people go home, they have

to face a whole new set of situations. so looking at what's going on inside their home, it became very important to me to work with the families. so as a volunteer with young people, i decided to volunteer more and more of my time, just working in the community to get more connected. i think it's very important that plaza east have resident services. i've seen them be successful in helping residents and providing them opportunities to step into other leadership roles to take more advantage of contributing to their communities and also having the support to have programs for families, for the youth, for seniors, for the disabled. it's very critical for the communities to have access for

this, and it's so unfortunate that the people of plaza east have not had this at all, and all of this is dependent on the resident council and resident volunteers. it's very hard to provide support without funding -- >> clerk: thank you very much, danielle banks. mr. smith, could you bring us the next caller, please? >> hello. my name is comelia. i'm a resident of plaza east. just to be quick, more of the main concern, i know things can't be done as fast as we expect, but having proper office staff that can actually handle people's paperwork and the recertifications properly, and maybe you guys would be more on track with your funding and actually getting payments in? we've had problems with that over the years, and like i said, i've been here 11 years

and i've seen a number of things? as far as jumping quickly, because i know i don't have much time, the reorganization and rebuilding, giving us new appliances and fixing little things are all cool, can you done by regular maintenance, but there is water in the wall. like, my back wall is basically coming apart, like, wet tissue, and they clean it up and put a board over it, so there's more work that needs to be done with the structure of the site? second, third, is the adequate safety of everyone, having security. now, i do support miss martha, who is our person who represents us, and also, the other services that they're trying to bring are all very well, but the root of the problem is, you know, like, the buildings are starting to shift. there needs to be major

maintenance, not just cosmetic maintenance? and my first thing and last thing is having adequate staff in the office. there's a huge turnaround. hiring maintenance that knows how to actually fix things, not just people you guys are wasting money onto be on-site that can't replace a hose or do basic maintenance stuff. >> clerk: thank you, comelia. mr. smith, could you bring us the next caller, please. >> hello, this is chesswell barnes, d-5 resident. i support the speakers already and give you some points. text messaging is a problem in that you don't have any printout in what was communicated.

a.m.i. is the problem. when you talk about having mixed income at the site, because we are having a drifting higher and higher a.m.i., so anchoring it to something that keeps moving is a disservice to our residents in san francisco. 20-year life to our h.u.d. buildings is totally insane. i guess we can't control h.u.d., but we should plan on more than a 20-year life in san francisco. who will do the resident organizing that seems like the need for the staff person for that sort of thing, but who is actually going to do it? major things like mold and other issues have to be taken care of, and why the heck is all of this being done during covid when live meetings are not possible? it seems like the train is running too fast, and people are going to get run over, so

lots of issues big and small, and i really think that san franciscans deserve better treatment than they've been getting here. thank you. >> clerk: thank you, chesswell barnes. mr. smith, can you bring us the next caller, please. >> hello. my name is kevin daniels, and i'm with urban strategies. we've been working on this with martha and the resident council as well as with the [inaudible] resident services. and i'd really like to say we've been doing this over 40 years across the country, and we've learned some things along the way. one thing we've learned is it's important to have people on the ground doing the works because they understand the local history, so it's going to be our job moving forward

supporting those on the ground with our experience, so we are definitely going to be a part of this project, and we are definitely committed to see it to the end. >> clerk: thank you, kevin daniel. could we go to the next caller, please, mr. smith? >> hello. this is mr. dennis williams, 20-year resident of plaza east. i had to find -- i'm the founder of no race and no hate san francisco. it's a grassroots organization that i had to file due to the residents after meeting with the head developer, pauline, visiting martha [inaudible], joyce armstrong, david hollands and so forth and getting nowhere, so we definitely had a fight on our hands. what we're dealing with -- can you hear me? what we're dealing with is corruption.

we're trapped in a pattern of corruption. d.b.i., we reached out and found no transparency with them due to tom hue being at the head, rodrigo santos being in corruption, and it's all been in the f.b.i. reports and due to complaints being squashed. we finally had to get stories by the san francisco press, san francisco chronicle and with numerous civil rights violations. it's a shame that [inaudible] that marched with dr. martin luther king in the past and that has allowed them to get favor with housing projects nationwide. i imagine that dr. martin

luther king would be dismayed because of the mistreatment of african americans on housing properties. a big problem is the board of supervisors has been giving money to political -- i say political officials, namely, mayor london breed and president shamann walton or at least backing them just because they're african american. >> clerk: thank you for your comments, mr. dennis williams. mr. smith, could we get to the next caller, please? >> hello. my name is deanna pearson, and i am a resident of plaza east. i want to be a part of the decision made in my community, and i'm looking forward to working with miss martha, danielle's team, to make sure

we have a voice. >> i am darius perkins growing up here in plaza east, and i am excited to think about new youth programs and youth facilities where i can spend my time and feel safe as a human in this community. i want to be a part of all of the changes and hope to work with m.b.s. and danielle's team and everyone. >> thank you. >> clerk: thank you, deanna pearson and darius perkins. mr. operator, could you bring us the next caller, please? >> i'm a resident of plaza east. i live right across the street, and i think it's unthinkable that we would let the residents

of plaza east suffer any further. the federal government, i think, and the developer and the city have all failed them. but as a city, we have a moral as well as a legal obligation to make sure that everybody at plaza east has safe, healthy, and secure living conditions. i totally agree with supervisor preston and the residents that how we get there, the processes and the decisions that need to be made must be led by the residents at plaza east

themselves. if there was negligence in the construction or work, then that must be investigated. the answer is certainly not to add for-profit units, market rate units for wealthy people, and it's not to give the developer [inaudible] who is construction deteriorated -- whose construction deteriorated in only 20 years, but the bottom line is it's not up to me or any other outsider. all of the decisions on plaza east has to be up to the residents on all of these things. thank you. >> clerk: thank you, lorraine petty. mr. smith, could you bring us the next caller, please. >> hello. hi. my name is yolanda marshall.

i am a resident of plaza east. i disagree with joyce armstrong when she said that the residents asked her to be a voice. i am a resident, and i have my own voice. i don't agree with miss martha and many people around here have a cult going on. many residents don't know what's going on. i agree with dean preston and making things better, and i'm looking forward to working with him and other people, but i disagree with martha that she is our voice. i did not agree with her being my voice, and i look forward to working with dean preston, and that's all i've got to say.

>> clerk: thank you for your comments, miss marshall. mr. operator, could you bring us the next caller. >> hello. hello? >> clerk: yes, please begin. >> my name is asie, and i am a resident of plaza east. first, i would say that miss martha does not represent me, either. i have not been familiar with project level up, either, as regards to the plaza east residents. there are a lot of issues here that have been represented by not only the residents but other officials that i've seen here today that are unfortunately [inaudible] effect.

there are also emotional traumas that have been a part of living here that, in my opinion, have been created by the lack of our security, our lack of concern for our well-being, and we are only expected to pay our rent. there have been fundings for programs here that have not benefited the residents to the extent that they need to. we need representation from true residents such as myself and dennis, and we also need the ability to have, again, transparency and have the option for redevelopment, including retail space so

residents can be a part of the new wave of san francisco, which is affordable living, not just housing because we know san francisco is a wealthy city, and any rent in this city would be likely upwards of $5,000 or better, and we would like to be included. >> clerk: thank you very much for your comments. mr. operator, would you let us know if there's any further callers in the queue? >> operator: there's no further callers in the queue. >> clerk: thank you. >> chair preston: thank you. seeing no further callers in the queue, public comment is now closed, and supervisor chan. >> supervisor chan: thank you, chair preston. i just want to thank all the resident that call in to take the time to really make the public comments today, and i

just really want to thank chair preston for having this hearing. my aide to supervisor sophie maxwell in 2006 included experience in public housing, and it was very hard how h.u.d. mistreated and managed tenants. seeing utilities shut off and seeing windows boarded up and went on without fixing and repairs for quite some time, the living condition was not quite right. and also had an opportunity as an aide of watching the opportunity for r.a.d. in chinatown as an aide to supervisor aaron peskin and seeing how an organization like chinatown community development center come in to really work with the tenant that living in [inaudible] for a long time and other public housing and see the transformation for that

community there and the living condition with painting -- fresh coat of paint and lighting and increase of safety, and those are the things that truly taught me what it means that, you know, that we need to really need to have a tenant and community working together and advocating for our tenant, and we need to do that from a community level and help us to breakdown the bureaucracy. i really urge everybody on this presenter today to really work closely with the tenants and the community to really improve the living condition. i'm pleased to hear that there will be a new management coming in, john stewart company, in june, but i don't think that that is a silver bullet, and it really takes an on going effort and a lot of hand holding, and

so hats off to chair preston and his office and team. it's lot of work, and i know that, and so i -- but i look forward to, if granted the opportunity, to hear update, really, where we're heading and making sure that plaza east tenants really have a safe and healthy living condition moving forward. thank you. >> supervisor preston: thank you, supervisor chan. and i do want to thank my colleagues on the committee and just recognize that we don't office have hearings for a specific site in our districts, but i think that the significance of what happened

in plaza east, the site has not gone through the conversions that have been described, but it's of huge importance not just to district 5 but to the entire city and certainly preventing more displacement of the african american community and if done right, potentially creating more opportunities for folks who have been displaced from the fillmore to move back to fillmore. so it's a matter of citywide significance. at the same time, it is unusual to have a lengthy hearing around a particular site in a particular district. i just want to express my appreciation to supervisor mandelman and supervisor chan for their interest in something that is ultimately in my district. i did have a couple other questions for the authority folks and then unless there are other questions from

colleagues, we can move towards wrapping this up. i do want to echo the thanks, supervisor chan said, to all the callers, and especially all of those people who said not coming in in person, it can be a strange technology to maneuver, not knowing when they're speaking, so i appreciate the folks hanging on for an hour or so. but i did have some questions, as i was thinking about this and hearing some of this public comment, can you describe, like, how does the housing

authority exercise oversight over m.b.s.? i think we've heard in detail how mohcd does that when they're doing the work of reporting back. we kind of got a flavor of how that works under mohcd loans, but looking backwards for a minute, what is the actual process in terms of the housing authority and m.b.s. getting oversight over m.b.s.? can you address that, please? do we still have dr. [inaudible] on the line or someone from housing authority? >> clerk: mr. chair,

[inaudible] has been dropping into and out of our meeting. dr. [inaudible], just to let you know, chair preston is directing a question at you now. >> chair preston: welcome back. i'm not sure if you were able to hear the question. it looks like there may have been some connectivity issues. should i repeat? >> yes, thank you. >> chair preston: okay. i was asking about oversight by the authority and the commission of m.b.s. and noting that mohcd spoke earlier about, in some detail, about the house and the oversight of repairs due to a mohcd loan, but i wanted to hear from you, looking forward -- upwards a little bit, just what is the process by which the m.b.s. reports to the housing

authority regarding conditions at plaza east and the housing authorization exercises [inaudible]. >> so just in my time

[inaudible] while determining what the next step is for m.b.s., so -- [inaudible]. we did collaborate with mohcd at their term while saying hey, we, together want to be [inaudible] all of this documentation [inaudible] all of the monthly reports [inaudible] that there is a third party [inaudible] on the site as [inaudible]

and some of the work that was done, as well, so we are walking with them to ensure that this work is [inaudible] together as a team for

[inaudible] talking about next steps. >> chair preston: [inaudible].

>> [inaudible] so we are having a reporting mechanism as it relates to our meetings and asking for supporting documentation. >> chair preston: thank you. and do you know, has the housing support commission held any hearings on plaza east and the condition like what we're doing here today at the board of supervisors? >> we have not.

prior to me, i'm not sure if that has occurred. in the 20 months that i've been here, we have not held a board meeting specifically to plaza because we have been working hard in hand on plaza and many other things. >> chair preston: and just as it relates to the application to h.u.d. -- so our understanding is the reason that h.u.d. was discontinuing the process for that application before it was withdrawn was a pretty significant discrepancy regarding the cost of rehab and that were in the application i

think that were off by $10 million or more. i just wanted to find out whether the discrepancy in the cost estimate between what h.u.d. was saying how they viewed it versus what the housing authority and m.b.s. had presented, if you could comment on that but also, like, what progress has been done -- like, it seems, like, a pretty big issue that, like, is your view that h.u.d. got wrong on that or was there something wrong with the way that the costs were being estimated in the application? >> so first of all, thank you for that question, supervisor preston. i don't believe the costs were wrong. i think we all have to understand at government, we're at local, and you're talking federal, and our relationship is definitely a dance, and we

have certain local provisions around -- as an example, if i recall, we have a d.p.h. ordinance around, and there are differences of opinions in how h.u.d. sees some of those costs versus our local mandate requires our view, and so those were some of the differences around the view of how san francisco looks at the environment, how it wants to build versus what h.u.d. says is allowable under their perspective, and that is the dance that we do when we are in this relationship at a federal level of what do we all agree from a local perspective and what is the dance that we're making about the costs that we're presenting that are very important to us from a local

perspective. if you're okay with this, i'd like to pass it over to audie, who can talk a little bit more about those potential costs and how we invested a little bit in the dirt and the solar panels. there were certainly things that were just not allowable through h.u.d., even through all the conversations that we had. >> chair preston: yeah. before we do that, because i am trying to better the relationship between the housing authority and h.u.d. and m.b.s. when the housing authority submits the applications to h.u.d. for what these expenses will be, are you relying exclusively on m.b.s. and their

contractors for developing those numbers or is the housing authority exercising -- doing any kind of independent or separate investigation? >> we do rely on the engineers that had been hired to do the work that is fine lined. we do rely on engineers to do the work, so we did not hire the engineers. they were hired and contracted by m.b.s., and they're a reputable firm. we look at the numbers and what costs are there, and we had discussions with those costs. we had discussions on fine lines around those costs. we had discussions around them to understand the conversations with m.b.s., but i also sat

down and discussed what are some of the costs that we presented? we requested, as we pushed back on h.u.d., because we believed those costs were viable, and we pushed back and asked whether consideration, and they did some more research by our request. so again, it really -- the whole process is whether we're doing it or, again, m.b.s., we are hiring engineers to do the work. the only thing is we were working with the city, and we were given a city engineer. we're relying on the help of experts. we don't hold that expertise. i'm not an engineer. i don't necessarily have to be given detail by detail on some of those types of costs, and we have to go out and hire. >> chair preston: thank you. mr. najarj, if you wanted to

address the cost issue? >> no, i think the director got it right. in our conversations with h.u.d. -- well, first of all, i should say that the critical needs assessment consultants that we hired was the same p.n.a. consultant that worked sunnydale and potrero. they're not california based, they're midwest based. but given that they know san francisco, they also know the tests with h.u.d., and given that they had success with sunnydale and potrero, we wanted to hire the same company. so they came on-site. they kind of created the elements of the scope of work that would go on the [inaudible] test, and they met with contractors, both fine line and also n.b.i., because

n.b.i. is working with us on all hayes south and all hayes north, so they have expertise as contractors on various scopes of work. h.u.d. did not push back on our pricing estimates. i think they know that we have the highest consultant prices in the country. quite frankly, as we were looking at various sites -- various items where we thought some items should be included and some should not be included, there were some that should have subsidies rather than a prolonged back and forth on scope of work. and what was attractive about the r.a.d. program is it gets

us into r.a.d. regime that i'm certainly familiar with. what's nice about the r.a.d. program is there was this attractive rate of return and the same principles that we have at the city level, so we thought let's just shift over to this new r.a.d. program. >> chair preston: thank you, and i think that miss healey had a comment. >> thank you, supervisor. i just wanted to provide our experience with these h.u.d. section 18 applications over the years. i said earlier that we got eight of the applications approved for the section 18 demolition, but it was eight months of back and forth with with h.u.d.

they didn't recognize the need for seismic upgrades. that's just a testament to how removed they are from the realities of our environment, so i just want to, you know, echo that their framework and our framework for what is a reasonable scope is not always the same, okay? >> chair preston: thank you for adding that context. so thank you, everyone, for your participation. i have some just final comments. i don't see others on the roster. thank you for answering the various -- the various questions. i think that -- i do think this last point we were discussing is very significant not so much to get into the details of exactly what should have and should not be part of that cost estimate, which h.u.d. didn't

believe hit their threshold. i believe it's 60% -- over 60% of the cost of rebuilding, then past the demolition is open. [please stand by]

it's something that we have to grapple with, you know, housing authority and m.b.s. are moving forward. so if the housing authority, for example, is not doing an independent analysis of these but is relying on m.b.s., m.b.s. is the entity that built this. m.d.s. is the entity that so far the city has selected to rebuild it. m.d.s. is entertaining although not yet decided on the possibility of having market rate or mixed income

development which adds in different revenue flows and so the nature of those relationships is such that we have to be really clear and solid around cost. i want to be clear. i'm not suggesting that any of the costs are misstated. what i'm saying is that the nature of the roles here when you have the developer essentially putting forward the cost estimate, there's kept schism that i've heard from a lot of tenants about whether they can rely on that. so it's a challenge to us, you know, both -- either how to show that the cost estimates going forward are solid, right. or have third parties that are independent in some way review that or having the housing authorities play more of a direct role in what we're

seeing. i just want to put that out there. that will continue to be one of the big elephants in the room if there's talk of demolition. like what does it really cost? our history in this city and in this country is full of bad faith attempts to frame things and that's certainly the history going back in this community. again, not necessarily what's happening here. but if that's not what's happening, and if these are solid figures, then communicating that and grappling with this almost inherent conflict where the future developer is the one making the cost estimate as to whether property needs to be demolished or not. so that is what stopped the section 18 application as we've

heard. so i think just get as much transparency as possible on that is really crucial. and i want to make one other comment before we wrap up. i want to say, i am very concerned when i hear mixed income community as the proposal for a public housing site. doesn't mean it can't be done, but i just, you know, it's mixed income is a buzz word these days. you know, another way to look at that is this a plan for gentrification or a plan whether intended or not will have the impact of further displacing the black community and my personal view is redevelopment should occur at this site, that it should occur we all agree in the affordable

housing units, but also, if we're increasing the amount of housing on the site, that we're adding more affordable housing which is what we desperately need in the city. what is what we absolutely need in terms of the housing which would help avoid further displacement which would potentially allow african american community members who have been displaced from somewhere in the city to move back to the city. you know, but that's my personal hope. my personal hope would be rehab or if you're going to do something where units are replaced that we're building more units but we're building more units that are affordable to the community members. but that's not my call. i mean, that's up to residented that's up toll community members and i appreciate the representation from all those decisions that have not yet been made and those are decisions for residents in the community to make.

i want to reiterate my thanks for everyone participating to and also, with some of the comments that have been made around the residents council, i do want to just address those. in my view, this is not at all are people working with the residence council. this is the point i've made to and around their outreach, you know, absolutely. we're engaging with the residence council is essential as is doing broad based outreach and i think we're all in principal on the same page around that and i think we had a good conversation me and my staff with the residence counsel. i think we're on the same page in terms of wanting transparency. i know she's been at this for a long time and as one of the

colleagues noted folks working in the residence counsel or other grass roots organization with the property are all doing this on a volunteer basis and it's really tiring and hard work. so i appreciate all their work. but i will also say, i've walked through numerous times. i've walked with and i've met and talked with a lot of residents engaged and their prospective matters as well finally, i think on the two main issues, we've talked about the communications with tenants and flad to hear about reporting back top o.c.d. i would very much like to and

we'll be moving colleagues to move this item so we can get a report back on the status of repairs because i think these matters are urgent and i also when it comes to the longer term redevelopment plan would like for the housing authority, m.d.s., and any other relevant department to really map out the plan for engagement with residents and decision making around the long term rehab or redevelopment of the property in a way that's an actual plan on paper that we can discuss and hopefully we can develop that and be in communication with that before the next meeting. with that, colleagues, and thanking everyone for their time i would like to move that we continue this hearing to the

g.a.o. hearing that's scheduled for june 17th and would appreciate the engagement for them as i've described. >> clerk: on the motion offered by chair preston that this be moved to the red government audit oversight committee june 17th, [roll call] mr. chair, there are three ayes. >> chairman: thank you, mr. clerk. and thank you everyone for your participation. that ends our hearing and we'll see you back on june 17th. mr. clerk, can you call the next item. >> clerk: agenda item number two is a resolution urging governor gavin newsome and the california public utility commission to ex10 the utility

shut-off. members of the public who wish to provide public comment on this resolution please call the public comment number. meetingide number and then press star followed by 3 to be added to the queue to speak for this item. mr. chair. >> chairman: thank you, mr. clerk. this item is sponsored by vice chair chan and i will turn it over to her at this time. >> thank you, chair preston for scheduling this hearing and thank you so much for cosponsoring this legislation. this resolution urges governor gavin newsome and the california public utility commission and the utility debt beginning in march 2020. rate payers across california

with gas and electric utility debt have increased the pandemic and has grown from $500 million to over $1 billion. the c.p.u.c. approved a utility shut off moratorium and in february 2021 voted to extend the moratorium until june 2021. with this deadline, some clean power and small business customers owing close to $2 million in power bills, we need to take action now. may twenty-onest, one of the reasons why we wanted to schedule this today is the deadline for the administrative law to issue a proposed decision on the moratorium shut

off. for some, it literally means life and death. those at home really rely on medical devices being charged and for many families it means whether or not they can get through the day taking care of their families. for their kids to get through distanced learning or cooking a meal for their family. to get by just so that they can recover from this pandemic. this is why we're urging our governor to extend the utility shut off moratorium. i really want to take this opportunity and work with other statewide organizations to ensure californians can continue to live in their home.

i also want to thank lasco executive officer ryan gobo and for their research and work on this. last but not least, i want to thank sfp.u.c. for their residential and small business that has been impacted by this pandemic. nonprofit customer system program in san francisco through march 2022. so, with that, i want to first invite if it's okay, chair preston, i can move forward to invite presenters to present their presentations. >> chairman: please do. >> so i first want to introduce

is mike hem from sfpuc for us to kind of understand better what is happening in san francisco. the situation is growing and it's quite dyer at this moment and then after mike, i'm going to invite executive officer brian gobo from lasco to try to provide the recommendations on what we can do forward to support san franciscans. >> thank you, supervisor chan and supervisors of the committee. can you hear me okay? thank you. once again. my name is michael hyams. i do have a presentation for you, a few slides to share today. i'm going to bring those up right now if you'll bear with

me. can you see the slides? >> clerk: yes, we can. >> great. thank you. supervisors, i'd like to start briefly by setting some context for this discussion. the pie chart on this slide shows san francisco power supply by the amount of electricity supplied by different energy service providers. the city and county of san francisco through its public utilities commission operates two electricity services.

clean power sf. those two programs are identified here in green and blue. and the sfpuc programs now supply more than 70% of san francisco's demand. the other two categories pg&e and direct access suppliers now supply about 20% to 25% of san francisco's electricity needs. in the next few slides, i'm going to be focused on cleanpower sf customer data. first of all, all of the delinquency data we're showing here. customers that are more than 90 days delinquent. we've used the 90 days or more metric for this presentation

because it represents customers that have the most debt and are at most risk of disconnection when the california's p.u.c. moratorium ends. the delinquency rate represents the customers that are delinquent in each zip code is as high as 14% in some areas. with the highest delinquency levels as you can see here in the southeast sector of the city. in total there were about 16,800 residential customers that were 90 days or more delinquent on their cleanpower sf electricity charges as of the end of march. this next map depicts the average past due balance for residential customers of cleanpower sf for each zip code. this is all for cleanpowersf residents that are delinquent. these dollar amounts also only

represent the amount that customers cleanpowersf. since cleanpowersf must pay for distribution of power and for some natural gas service, in total, they may have an outstanding balance for their total energy service that's three times the amount shown here. this next map depicts the percentage of cleanpowersf commercial accounts that were more than 90 days delinquent, again by zip code. and you can see here as of the end of march, there were about 1,700 commercial customers that are 90 days or more delinquent on their cleanpowersf charges and there's as you might expect a fairly strong concentration in the downtown commercial areas as well as the southern areas of the city.

this map depicts the average amount delinquent by zip code for commercial customers and, again, these dollar amounts only represent the amount that customers owe cleanpowersf. you can triple this two to three times the amount the total amount for energy services. okay. so what has been happening to address utility customers' ability to pay and disconnections during covid-19? well, like its response to covid-19 generally, the city has been leading the way in ensuring that residents and businesses continue to have access to essential utility service during the pandemic. this slide shows a few key milestones in the response time line. excuse me. i advanced by accident.

way back last spring, the mayor issued the second supplement to her covid-19 emergency proclamation on march 13th which included an order suspended sfpuc utility service shutoffs. a full month later on april 17th, the california p.u.c. or c.p.u.c. ordered utilities under its jurisdiction to suspend connection of customers for unpaid bills with that order being retroactive until march 4th. the ssfpuc took further action for nonpayment. and, skipping ahead in time here a little bit, just recently on april 27th, and supervisor chan referred to

this a moment ago, the sfpuc further extended the temporary moratorium on through 2022. the extension recently approved is intended to ensure our agency has a sufficient amount of time to put in place the necessary programs to help our customers as our economy comes out of the pandemic. the sfpuc has been taking action to address our customers' ability to pay and debt accumulation by working to reduce the cost burden of their electricity service in the meantime. on may 26th of last year, the sfpuc approved a program forh etch hetchy power. a 30% discount on their power bills. in addition, on july 28th,

2020, the sfpuc approved a one-time bill credit for cleanpowersf users and rates for energy or care and family electricity rate assistance or fera, low-income energy discount programs by september 30th. the fill credit was applied during the month of october last year to more than 50,000 clean power sf customers and covered an average electricity bill for a c.a.r.e. or f.e.r.a. customer for one month. the bill credit provided some economic relieve for these customers and an opportunity to promote enrollment in the c.a.r.e. and f.e.r.a. programs that could provide ongoing assistance. and, we did see a large increase in c.a.r.e. and f.e.r.a. enrollment over the past year in san francisco

jumping by 30% pre-pandemic levels. on december 8th, the cleanpowersf participation in a program started by the cpuc the management program. this arrearage management program. the sfpuc has and continues to advocate and has recently opened covid-19 debt proceeding. again, supervisor chan referred to that in her opening remarks. today, we have been participating through the california community choice association oracle cca which is the statewide association of

community choice and ago gaegs programs. we called for the cpu c among other things in its up coming decision align the timing for the end of the disconnection moratorium with the status of the state's economic re-opening allowing customers a transition period to regain economic stability to fund additional debt relief through public purpose program charges to utilize area media income as an eligibility benchmark instead of the federal poverty level and finally to expand eligibility for the arrearage eligibility program that i just mentioned and prioritize payment and flexibility

programs. so that concludes my prepared remarks for you. i'm happy to take any questions you may have. >> supervisor chan: thank you. i really appreciate it and i think that it is, for me, the most concerning is to see the both residents and commercial and small business who are actually owing, you know, utility debt and that it seems like it just continues to be growing. and i think for some of us, we can identify that it's disproportionately hurting likely those who are communities of color, residents, and small businesses. so i really appreciate you

helping us put this into perspective, but also to help us better understand it. chair preston, if you have any questions or if we should continue on with the presentation? >> chairman: i don't have any questions at this time. we can go forward with the presentations. >> supervisor chan: thank you, michael. and i really appreciate your time and then next we have our lasco executive officer who really has done tremendous work on this is sfpuc and i really appreciate him coming forward here today at the board of supervisors and help us to kind of understand what are the things that i think us as the board can act on from an agency point of view and recommendation. thank you. >> thank you, supervisor chan. and, good afternoon, members of

the committee. brian goebel. today, i am here to talk about some of the research and recommendations that lasco has developed really over the last few years with the goal of san franciscans struggling to pay some of their utility bills right now. and hopefully you can see my slides, supervisor chan. great. and as you just heard from director hyams at cleanpowersf there are thousands of commercial and residential customers behind on their utility bills in san francisco and some of these customers, pg&e customers could be facing power disconnections when the statewide moratorium on power shutoffs end on june 30th. the disconnection crisis is not new, but it got significantly worse during covid. it's an issue that popped up on our radar in 2019 and i'll go

over that research briefly. while there are statewide efforts under way to provide some relief to

who already distribute federal low income housing grants. also some state senate have asked. the questions that remains is what if these efforts fall short. the issue of disconnection is not new. there were a lot of folks already struggling to pay their utility bills before the pandemic began. our former research associate winston parson issued a report

in 2019 that found that roughly 15,000 power shutoffs occur annually in san francisco due to nonpayment of bills and this was for a period between 2016 and 2018. at the time we presented this map of the disconnections, and you'll see that the highest rates of disconnections were in areas with the greatest historical burdens from from power generation in san francisco namely bayview hunter's point. that at the time, made a number of recommendations. as a followup to that report, we had another lafco research associate asked to analyze the june 2020 addressing power disconnections among low income utility customers.

that was a result by senator ben owasso. it requires the cpuc to reduce gas and service disconnections by 2024. for ms. chan's research, she developed recommendations and i'm not going to go into all of her research, but the report has been provided to you and these are the main points her conclusion was that the june decision was insufficient to prevent debt accumulation during the shutoff moratorium and prevent keep making this.

the reason she found it to be insufficient was that the plan or that the payment plan missed the mark in terms of eligibility. you have to be ruled in c.a.r.e. or f. e.r.a. and these programs help a lot of programs providing 30% discount on bills, but the eligibility requirements do not take into account the cost of living in san francisco. so that's going to miss a lot of folks who are in need of utility debt relief. also, if a customer misses two payments, they're kicked out of the program and not eligible for another year. so those were the two main reasons why this program she found it to be insufficient. so she developed a number of recommendations and, you know,

these recommendations mainly concern but the main recommendation was the board of supervisors should pass the resolution urging the cpuc and the governor to extended power shutoff moratorium. for how long, i think that's an open-ended question. the deadline was extended to march 20, '22. i think the advocates who have been involved in the process have advocated it be as broad as possible. the other recommendation is that the board of supervisors pursue all local state and federal funding sources to eliminate all debt from delinquent accounts for low income residents. again, going back to the question of what if the cpuc's efforts fall short? shouldn't san francisco be prepared. the city consider other

measures to forgive the debt. supervisor chan, that concludes my presentation. i'm happy to take any questions that you might have. >> supervisor chan: thank you. bryan, i want to go to the can go a little bit deeper. i see specifically talk about low income assistant programming and if you can quickly go through those eight items to just kind of help us understand what the four perhaps can identify ways to provide local support specifically to some of the populations that may be impacted. >> happy to, chair chan. hopefully you can see my slide. >> supervisor chan: yes.

>> so all of these ms. kaun gibson the bill assistance programming that are currently available on that particular item, it has to do with the income eligibility for c.a.r.e. and f.e.r.a. customers. and so that had to do with the low income assistance programming. she also had a section as well on section eight. one of the consequences the possibility that folks who are in affordable housing if their

power is shut off. she also took into consideration vulnerable population 65 plus and those under 12 months. part of that is around providing, you know, medically necessary equipment to folks who need that life-saving equipment. she also talked about the disconnection rate. the advocates that are currently involved in the rule making process that don't want to use the zip code data as determining eligibility for relief because there's some inconsistencies and some further research needs to be done on that. number 5 was the reconnection goal. that has mostly to do with the late fees and reconnection fees that are required after a

customer has been disconnected. the same for establishment and re-establishment deposits as well. item 7, she goes in to the medical baseline program a little more specifically and then also has a section in the report on multi-language communications and some of the barriers that currently exist in accessing programs for utility systems. >> supervisor chan: great. thank you. i think that with these and i really appreciate the thorough analysis going through all the data for this and allow us to really be able to with just to take the so-called fruits of her labor, you know, and be able to get to this rather quickly through this presentation and to help us

really understand the picture is rather dyer for most vulnerable in san francisco and i think it kind of references back to item one that we discussed for people living in public housing and in need of services and utilities definitely a key, i would say a right to just a quality of life and just to live in a healthy and safe condition and utility is definitely part of that. colleagues, thank you. and, chair preston, i just want to thank you for this presentation. i want to just through these presentations to hammer the point of the situation. it's something that i know that we're thinking about vaccination. we're thinking about keeping

people housed and try to provide them tenant relief on rent. but, at the same time, i know both on a commercial and residential sites, another fear that i hear a lot is also utility. because even though they have a roof over their head or being able to continue to open their business, if they can't pay electricity bills or water bills they can't live or operate their businesses. so i just want to bring that and highlight this need that we can overlook moving forward and i hope to have the support to urge our governor sxm cpu cbeside tenant relief and relief for our small business but to think about utility as a right and the importance for people to just be able to live in a safe condition and for

small business to stay open. thank you. >> chairman: thank you, supervisor chan. and i really want to i really want to thank you for all the work on this. and, as you said, this is such a integral part of one's home and one's ability to keep their home and i know that the terms, the work of turn has been what you referenced like they have in reviewing the materials, i read through their report where they really looked up the impacts of shutoffs, you know, not just on the sort of economic impact of the debt, but all of the ways in which utility shutoffs impact peoples' lives and their health and some of them are immediately apparent and others

are more indirect, but just in creating stress which triggers other problems in exacerbating food insecurity hunger because of among other things, your refrigerator being shut off and, you know, and down the line to many other conditions and to the sort of the silent displacement people talk of when folks in power often are losing their ability to stay in their home. i did have one question. i was curious. so i understand the resolution pushes the governor into basically extend the shut off moratorium and debt relief and i know there are local programs that have been described. and i don't know if this is for

city attorney is there some kind of limit should we choose to use that power if the state didn't act to band disconnection given the very serious consequences, disconnection and as you've laid out and as the presenters have laid out, the equity implication of allowing disconnection to occur. that's something the board could legislate on or for some reason. and, i see deputy attorney ann pierson is on and with apologies for not flagging that

issue previously for the potential for you to look into. maybe you can give some advice on the fly. >> well, i think that's something we would have to look into to determine whether that's within the board's authority given the different relationships over this system of utilities. but i'd happy to get back to the committee with an enter to that question. >> and i know mr. goebel has looked extensively into policy options and i'm sure wondering are there any barriers you're aware of. >> thank you, mr. chair. i have not heard of another municipality banning disconnection. i know that l.a. had a utility debt relief program that the department of water and power

in l.a. ed. implemented. but i don't have the answer to that question. i will have that when the city attorney's office gets back to you. >> this is michael hyams. director of cleanpowersf again. unfortunately, i think i probably would need to defer to the assessment of the city attorney on the board's authority here. clearly, the city has authority as it relates to the utilities that it manages and provides and has taken action which is part of what i delivered in my presentation. and, i will add to just because clean power sf is unique. cleanpowersf has -- is both under the jurisdiction of the city, but also the cpu c and

that's because pg&e continues to provide power and transmission services to cleanpowersf customers and also conduct billing and metering. so cleanpowersf is in some respects, many respects a partnership that is overseen by the california puc. customers have no authority to disconnect cleanpowersf customers. the only recourse that the city has more customers that don't pay their cleanpowersf charges is to return them to pg&e service. only pg&e can disconnect customers under the authority that it has through the california puc so even as far as the services, we cannot disconnect customers, but i can

speak to the board's ability to mandate a stop to disconnections. >> chairman: thanks. well, let's hope the governor listens to the resolution and we're not in the position where we need to, but certainly appreciate your leadership, supervisor chan, on this as well as whatever further stuff you think is warranted once you see what the state does. i ran the tenant rights organization on a hot line that heard from thousands of people across the state every year and utility shutoffs and the trauma of especially for folks with seniors, folks with disabilities and children in their households is one of the just most stressful and harmful thing and, you know, as supervisor chan, we've worked together on this in the rent

context and supervisor mandelman as well around, there's one discussion around debt. right. and there's another discussion in the rent context or on just keeping your home. and, in this context, not cutting off utilities and in some ways those have to be separated. the trauma doesn't have to be involved. so i appreciate all the advocacy on this. supervisor mandelman. >> supervisor mandelman: i will just echo the thanks and ask to be added as a cosponsor. >> chairman: thank you, supervisor mandelman. i'm sorry i believe i'm a cosponsor. it's unanimous on cosponsor. unless, supervisor chan, if you have anything further, let's

turn to public comment. >> clerk: thank you, mr. chair. for those watching our meeting through sfgov tv.org. if you wish to speak on this item please call in by following the instructions displaying on your screen by dialling (415) 655-0001 into the meeting i.d. 1871614177. press pound symbol twice and press star followed by 3 to be added to the queue to speak. mr. smith, can you connect us to our first caller if there's someone on the line. >> supervisors, i've listened to both the agenda items and, again, missing is a needs assessment. ya'll cannot make a needs assessment because you do not

have all the empirical data to do it. on the first agenda, missing is is the environmental concern. and how the federal government looks at it as opposed to the city and county of san francisco. ya'll don't have the empirical data even though it's there. the san francisco public utilities commission took the challenge to provide clean power but ya'll don't know the difference between a dirty

stack and a clean stack. an enterprised department, it is a very a million times very corrupt department. related to holland naomi kelly. tracy zhu. cathy how. all these people and, of course, barbara hill and i can go on and here it is in a nutshell. >> clerk: speaker's time has concluded. mr. smith, could you connect us to the next caller if there's someone on the line. >> that was our last public

comment. >> chairman: thank you. with no further callers on the line. public comment is now closed. supervisor chan, any final comments on the item? >> supervisor chan: no. i just hope we could make the motion to move this resolution to full board with recommendation. >> chairman: so moved. mr. clerk, please call the roll. >> clerk: on the motion offered by chair preston that this be recommended to the board of supervisors, [roll call] mr. chair, there are three ayes. >> chairman: thank you, mr. clerk. please call the next item. >> agenda item number three is the reenactment of emergency ordinance 621 to temporary require certain retail locations that include grocery stores or pharmacies for retail

locations that include grocery stores or pharmacies to pay employees an additional $5 an hour during the public health emergency related to covid-19. members who wish to provide public comment on this should call the public comment number (415) 655-0001 meeting id 187164177. after you've entered the meeting i.d., dial the pound symbol twice and one final thing, mr. chair, i'm in receipt of a letter in next tuesday's board meeting. welcoming from president wallton's office. ms. gee. >> thank you supervisors for hearing this reenactment of

emergency orders. i'm natalie gee and i will be presenting on behalf of president walton. this reenactment will extended termination date to june 15th to align with the state's plan to re-open the ordinance. we've heard with 51% of residents over the age of 16 receiving full doses of the vaccine. many people are pending on their second dose and it takes about two weeks for the second dose to be effective. dr. monica gandy and infectious disease doctor with ucsf has predict we'll probably reach herd immunity by june 15th.

we also have to wear a mask indoors especially if there are many people from different households mingling which is a common occurrence in grocery and drug stores. all of the bay area counties surrounding san francisco remain in the orange tier and, keep in mind, although we have san francisco residents who are essential workers, we also have residents from other surrounding counties who commute from san francisco to work and shop in these stores. there's still risk of working in this store where you're exposed on a daily basis. we are still currently in the state of emergency. and, even though we passed a resolution to implement hazard pay on january 15th of this year drug store companies didn't voluntarily implement hazard pay not until mayor

breed. many of these grocery stores also stopped their appreciation pay, hazard pay or hero pay in june of last year. three months after the pandemic started. if stores implemented and kept their hazard pay voluntarily, we wouldn't have to have a law but that's not the case. we've been in this pandemic for over a year and throughout this year, grocery workers and retail pharmacy workers have not stopped working. again, i do want to emphasize that this reenactment will only extend covid-19 related hazard pay for an additional four weeks to june 15th. and, hopefully by then, san francisco and surrounded bay area counties will have achieved herd immunity and there will not be a spike of cases with the new variant or any other factor that can put us back into a more restrictive status. thank you so much and happy to answer any questions. >> chairman: thank you, ms.

gee and thank you for your ordinary care on this and the previous reference resolution and initial emergency ordinance. appreciate your work and president walton's leadership on this. seeing no colleagues on the roster. let's go to public comment, mr. clerk. >> clerk: thank you, mr. chair. for those of you watching if you wish to speak on this item please call in now by following instructions displayed on your screen. (415) 655-0001 meeting i.d. 1871614177. press the pound symbol twice and then press star followed by 3 to enter the queue to speak. i understand from mr. smith that we have about a half dozen callers on the line. mr. smith, could you please connect us to our first caller.

>> hi. my name is cathy mckobe i'm with ufcw648. we're not quite there yet with the herd immunity like was just explained. we're still serving our community. we're still there, we ask you to please extend it. it is very much helping with our morale. thank you very much. >> clerk: thank you. could we have the next caller, please. >> good afternoon my name is rachel michelin. we consist of nearly 50 national statewide and local organizations opposed to government mandated payment ordinances. we urge you to let this ordinance expire. first, i want to applaud san francisco. because of your hard work and commitment, you are a leader in

the nation when it comes to delivering vaccines and, as mentioned, governor newsome announced he was confident the state would glide into june 15th as we remove all restrictions, but i'd like to point out the board in january, while san francisco was in the purple, red, or orange tiers. now san francisco is in the yellow tier and we're asking that you stick with the board's original intent. we cannot afford the unattended consequences of premium paid mandates. many communities are without a retail pharmacy or grocery store. increased costs make it challenging for these outreaches to stay open. as you know, many commercial districts face the challenge of

vacant store fronts which further depress struggling neighborhoods and worsen issues like homelessness and crime. now is the time to focus on our community and ensure we have vibrant commercial corridors, pharmacies and grocery stores are vital to those strong neighborhoods. so, today, i respectfully request that this emergency policy is allowed to expire. thank you. >> clerk: thank you for your comments. could we get the next caller, please. >> hello. my name is claire courtney and i'm a san francisco resident and an organizer with ufcw local 5. we have seen the heroic acts of grocery store workers. these are those pleasant people, those outings you get to go see a grocery store worker from encouraging people

to wear a mask, they go in every single day and do work far beyond what their job description has and this pandemic is still far from over and as was stated, we have many members that work in the city that do not live here. so while we may be talking about those that are vaccinated that live until san francisco, that is not entirely the case for those commuted into the city to work. so we have to be aware of that. we have to think about the entire bay area and vaccination levels and how close we are to herd immunity. again, these are essential workers feeding our communities and, unfortunately, as these companies reap absurd profits unlike they have seen before, it's not trickling down to their workers and so why we elect representatives is to

hold sometimes these companies accountable and make sure that they are doing the right thing and, in this case, they aren't going to increase wages once this hazard pay is away and these workers need these increased wages. so thank you for considering this. ufcw, we encourage you to extend hazard pay and continue to acknowledge the work that these essential workers do. again, this pandemic is far from over. while we are starting to see the light at the end of the tunnel, it's still very far off and we have to continue to fight for the people. >> clerk: thank you for your comments claire courtney. could we get the next caller, please. >> supervisors, this is tim james, california grocers association. all san franciscans should be celebrating the minimal risk status.

and, accordingly, san francisco's chosen to decrease restrictions for a significant part of the economy such as bars, restaurants, and entertainment venues. consumers and workers across all of the businesses are now considered safe from covid with proper precautions. if outside threats, individuals from outside san francisco are an issue, then actions should be considered to limit those openings. we do appreciate that city representatives and community leaders have celebrated a tremendous vaccination rate of over 70%. in california, every grocery workers has been eligible to receive the vaccination for well over two months at this point and especially in san francisco with our participation with the san francisco department of public health. specific to the ordinance, your own economic impact report which was unavailable when this

was first passed. states would reduce this point and higher consumer crisis. pay for wage mandates that lead to higher labor cost for businesses. it's important to recognize this mandate as a 30% increase in employment cost. it will impact grocery prices and challenge the sustainability of store locations. it is important to consider the impact of continuing to raise employment costs by 30% and what they will have on the grocery accessibility for san franciscans at this critical moment of recovery. we believe it's in the best interest as a city as a whole to not pursue an extension based on the negative policy and continue legal issues. thank you very much. >> clerk: thank you, tim james, for your comments. could we get the next caller,

please. >> hello, can you hear me? >> clerk: we can hear you. please begin. >> hello. thank you. my name is john gomez. i am a 13 year grocery member. i would like to speak today in support of the extending the hazard pay ordinance, you know, as the previous speaker spoke, yes, things are looking better, we're headed in the right direction, but the risk is still there. yes, at the minimal risk tier, but it said that in itself, there's still risk. grocery store workers although they've had the opportunity to be vaccinated and it has been available. it hasn't moved as fast as we would like and, you know, let's not forget about what these grocery workers have done in the past year, you know. i think, you know, extending it

to the 15th when the tier system is to be lifted. you know, it's not going to break the bank, it's not going to kill these companies. the think the grocery association speaking on these store closures. i just want to make a point this is passed in 17 cities in northern california alone and we have not seen the sky fall. we have not seen any of those things happen. when the california grocery's association says these kind of things are happening, the only thing personally that i hear is this is affecting our pockets and our profits. frankly, if you're seeing profits in the billions of dollars, you know, you can afford to pay an extra four weeks of hazard pay to these worker who is made those profits possible. so, again, thank you for the opportunity to speak.

again i ask that the board extends the hazard pay ordinance to the 15th. thank you. >> clerk: thank you, john gomez. can we get the next caller, please. >> hi, yes. my name is brian. i'm an organizer at cocw local 5. i want to speak in support of extending the hero pay for grocery workers. i want to first start off by thanking president walton and his staff especially ms. gee and their tireless work in promoting and carrying this legislation. as my colleagues have said previously, we are only asking for this legislation to be extended for another three weeks until the exit the steer system and while the tier

system has been affecting many businesses in the city, the retail have not been affected by this. they've been profiting off this pandemic. and not only to the virus, but to the violence that has come to people rejecting the violence as well as masks and increase in theft and the amount of physical threats they face is not what they signed up for when they decided to be california grocers. we're just asking the board to keep the hazard pay. thank you for your time. >> clerk: thank you, brian. mr. smith, could you bring us the next caller, please.

>> good afternoon. i am a grocery worker and i would like to support the hazard pay extension. i've been in the business for awhile and still a lot of people believe that we are in the yellow zone, but although in the yellow zone, we still have a lot of customers coming in not even vaccinated for the first time. i know for a fact that some of my co-workers only got their first shot this week. so we still have a long ways to go to stay safe. we tried to provide all the services to our customers, but we are not asking for an arm and a leg. we just want to be compensated for the things that we do to stay safe. >> clerk: thank you. mr. smith, please bring us the

next caller, please. >> good afternoon, supervisors and other members of the committee. my name is aaron stone. i'm an owner of molly stone's markets. there is no further need to extend this ordinance. there is no hazard. all of our employees have been vaccinated with the exception of a few that chose not to do it. the city is now as of the last few days in the yellow zone. it should be a day of celebration. not a day of penalizing the very industry that has provided the community with food and a safe place to shop throughout the pandemic. we are the only grocery store in san francisco over the arbitrary number of 500 employees before you get to thousands and thousands of employees that the national chains have. if compelled to extend this, apply it to the retail stores or to employers over 750 employers. please consider this and thank you for your time.

>> clerk: thank you, aaron stone. mr. smith, could you bring us the next caller, please. >> hi, my name is tim mclaughlin. i'm a union representative for local 648 here in san francisco. we represent the drug and grocery workers here in san francisco and would like to see the covid-19 hazard pay of $5 an hour continue for the workers on the front lines. this will benefit the families during the pandemic. thank you very much. >> clerk: thank you for your comments. mr. smith, bring us the next caller, please. >> hi, i am with ufcw local 648. i ask that you continue the hazard pay. not all of our members have been fully vaccinated yet and the state of emergency is still in effect. we also would like to keep this ordinance the way it is now with no changes.

thank you very much. >> clerk: thank you for your comments. mr. smith, could you bring us the next caller. >> good afternoon, supervisors. my name is dan larson. president of local 648 ufcw in san francisco. we would ask that you extend this ordinance for four weeks to our members who are greatly affected by this $5 and also just to put a little note out there, we're getting a lot of calls from our grocery and drug divisions that the members are being cut in hours. so let's keep that in realistic terms that they're not paying that $5 when they're cutting hours on employees. we are still in the middle of this pandemic. there is a light at end of the tunnel, but we're not even there yet. we need to extend this ordinance and we really would appreciate your support on extending it.

thank you very much. >> clerk: do we have any further callers on the line? >> that was our last public comment. >> clerk: thank you. >> chairman: thank you. with no callers on the line, public comment is now closed. i want to just comment, you know, i think some of the public comment i think raised the prospect of, you know, of store fronts shuttering and closed doors and vacancy and so forth. i did want to clarify that this ordinance specifically applies only to businesses with 500 or more employees. so i just, you know, in hearing some of the public comment, i think the public might have been afraid they're a corner store or other places were

going to be shuttering and this is targeted at entities with 500 or more employees and i've not heard really a case made that those businesses are in danger of shuttering or, you know, as has been pointed out by a number of the labor folks who called in. this has been for many of those businesses an exceptional year in terms of profits and so forth. but whether or not they've been gaining a lot, i have not really heard anyone seriously contend that any business of 500 or more employees would be at any risk of having to close any locations or anything with a one month extension of this hazard pay. just wanted to state that for

the record and also thank president walton and ms. gee for all the work on this. seeing no comments from colleagues on the roster here. i did want to move to set this with recommendation as a committee report to our up coming board meeting. >> clerk: on the motion offered by chair preston to recommend this as a committee report to the may 11th board meeting, vice chair chan, member mandelman. [roll call] mr. chair, there are three ayes. >> chairman: thank you, mr. clerk. and do we have any further business? >> clerk: there is no further business. >> chairman: thank you, mr. clerk. we are adjourned.

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