Budget and Finance Committee forwards health plan rates, airport lounge relocation, Port crane barge and other contracts; continues shelter-equity ordinance

San Francisco — The Budget and Finance Committee met July 16 and moved a package of budgetary and procurement items to the full Board of Supervisors with positive recommendations while continuing Levi’s proposed shelter-equity ordinance for further amendment and public notice.

At the top of the agenda the committee voted to forward the San Francisco Health Service System’s 2026 plan and contribution rates, which the board’s Health Service Board recommended after actuarial review. Vice Chair Supervisor Matt Dorsey, the board’s appointee to the Health Service Board, said the package ‘‘reflects the city’s continued commitment to providing high quality, affordable healthcare for our active employees and retirees and their families.’’ Health Service System staff and the budget office told the committee the blended premium increase across plans is 8.2% and that the system covers roughly 138,000 lives and manages about $1.1 billion in annual premiums.

The committee also advanced a lease amendment allowing American Express to temporarily relocate its Centurion Lounge from SFO Terminal 3 to Terminal 2 during Terminal 3 West construction (about two years), which lowers the lounge’s minimum annual guarantee from about $3.4 million to $2,030,000 for the relocation period. Airport staff said the move preserves passenger service and employee jobs while construction proceeds; the BLA estimated about $490,000 in concession revenue will be lost to the general fund over the relocation term but that canceling the lease outright would have cost the city far more.

Other items the committee forwarded included a four‑year extension and increase to the citywide ServiceNow enterprise agreement (Carahsoft) to a not‑to‑exceed value of $28.3 million; a $626,000 Caltrans sustainable‑transportation planning grant to study a concept design for a SOMA Under‑Freeway Park (Public Works); a $16.75 million contract for a custom crane barge for the Port of San Francisco (Dutra Group), funded primarily by a State Lands Commission grant; and acceptance of a $5,047,167 California Energy Commission grant to install 403 electric‑vehicle charging ports on city fleet sites (with $2.8 million in matching funds). The committee also approved a $866,500 donation from the San Francisco Police Community Foundation to support district‑level officer wellness and community engagement programs.

On homelessness and behavioral health items, the committee approved the Department of Public Health’s acquisition of 601–617 Laguna Street for use as an adult residential facility (purchase price $11 million; total project not to exceed $20 million funded from Proposition C) and a contract amendment expanding Abode Services’ role as the city’s problem‑solving fiscal agent (increase to about $17.1 million through June 30, 2027). The committee also approved a retroactive sublease close‑out for the Bayview Vehicle Triage Center so the city can finalize payment to the state.

Two items were continued for further review and public notice. The City Administrator’s proposed updates to the administrative code expanding emergency‑procurement authority (chapter 21) were presented in detail and drew multiple questions from supervisors about price‑control guidance and reporting. The committee agreed to continue that ordinance to the July 23 meeting to allow the purchaser/OCA to provide the departmental guidance and tariff‑related rules that it intends to issue within 60 days of enactment. Supervisor Sahra Mahmood’s ‘‘One City Shelter Act’’ amendments (which would require a shelter/equity analysis, create a 300‑foot buffer in some cases, and establish semiannual reporting and a sunset) were accepted as substantive; the committee voted to amend the ordinance and continue it to July 23 to meet public‑notice requirements.

Votes at a glance

- Item 1 (Ordinance): Approve San Francisco Health Service System plans and contribution rates for calendar year 2026 (medical, dental, vision, life and disability). Motion to forward to full board with positive recommendation passed (Dorsey motion). Vote: Dorsey—aye; Engadio—aye; Chan—aye. Outcome: forwarded. Key details: blended premium increase 8.2%; HSS serves ~138,000 covered lives and manages ~$1.1B in annual premiums; retiree plan increase ~4.5%; staff agreed to provide regular reporting on market volatility and provider access.

- Item 2 (Resolution): Amendment No. 3 to the Terminal 3 Centurion Lounge lease (American Express) to temporarily relocate the lounge to Terminal 2 during Terminal 3 West construction, reduce minimum annual guarantee to ~$2,030,000, promotional fee ~$9,035, and preserve day‑for‑day extension through 11/05/2031. Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Key point: relocation expected ~28 months; estimated general fund concession revenue loss ~$490,000 over that period.

- Item 3 (Resolution): First amendment to enterprise agreement with Carahsoft (ServiceNow) to extend term to 08/31/2029 and increase not‑to‑exceed amount by ~$18.4M to ~$28.3M. Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Key point: eight departments already use the platform; estimated citywide annual spend $3.7M; amendment secures volume discounts and avoids duplicated purchases.

- Item 4 (Resolution): Retroactive acceptance and expenditure of $626,000 Caltrans Sustainable Transportation Planning grant to fund planning for the SOMA Under‑Freeway Park (performance period 11/04/2024–06/30/2027). Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Key details: local match $140,000 (approx. $90,000 in‑kind + $50,000 in FY26 capital planning GF); project will fund public outreach, technical analysis and concept design.

- Items 5 & 6 (Resolutions heard together): TEFRA hearings for potential tax‑exempt bond financing by the California Enterprise Development Authority (CETA) — Item 5 up to $10M for La Scuola International School; Item 6 up to $80M for National Center for International Schools / International School of San Francisco. Both items forwarded with positive recommendation. Vote: unanimous (3 ayes). Key point: bonds would be paid by borrowers; city has no repayment obligation.

- Item 7 (Resolution): Approve contract with Dutra Group to procure a custom crane barge for the Port of San Francisco (not to exceed ~$16,750,000). Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Funding: ~$12.7M State Lands Commission grant (must be expended by 12/31/2026) and ~$4M Port harbor fund. Port staff said local ownership will reduce long‑term operating costs vs. renting.

- Item 8 (Ordinance): Amend Administrative Code to expand emergency procurement provisions and allow modifications to existing agreements in certain circumstances. Committee took substantial public and supervisory comment; supervisors requested pricing‑control guidance and draft rules. The ordinance as amended was continued for further public notice to the July 23 meeting (a subsequent committee action later in the meeting forwarded the ordinance to the full Board with recommendation pending the promised purchaser guidance). Vote on continuance: unanimous (3 ayes). Key staff commitments: purchaser to issue rules and regulations within 60 days of enactment and to provide tariff guidance and price‑control approaches for review.

- Item 9 (Resolution): Retroactive acceptance of $5,047,167 from the California Energy Commission to install 403 EV charging ports across 36 city sites (performance period through 06/30/2028). Motion forwarded. Vote: unanimous (3 ayes). Key details: matching funds $2.8M; installation deadline February 2027; city intends to continue with the same charger vendor family for procurement efficiency.

- Item 10 (Resolution): Accept and expend gifts totaling ~$866,500 from the San Francisco Police Community Foundation to support district station wellness, community engagement events and equipment. Motion forwarded. Vote: unanimous (3 ayes). Examples of use: National Night Out, neighborhood night markets, community police academy, holiday drives.

- Item 11 (Ordinance): Purchase of 601–617 Laguna Street from Pacifica SFO LLC for use as an adult residential facility (assisted living/board & care). Authorize purchase ($11M), construction management agreement, prevailing wage and local hire compliance; total not‑to‑exceed project cost ~$20M funded by Proposition C. Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Key details: seller to make seismic corrections identified during due diligence (seller‑funded portion ~ $1.6M); DPH to operate approximately 40 beds after renovation.

- Item 12 (Resolution): Retroactive authorization to execute a sublease close‑out for the Bayview Vehicle Triage Center at Candlestick Point State Recreation Area (term 01/13/2024–04/11/2025; base rent $312,000 per year). Motion forwarded with positive recommendation. Vote: unanimous (3 ayes). Purpose: finalize state sublease changes so the city can remit final rent and close out the arrangement.

- Item 13 (Resolution): Third amendment to HSH’s grant agreement with Abode Services to continue problem‑solving fiscal agent services, extend term through 06/30/2027 and increase not‑to‑exceed amount from ~$9.9M to ~$17.1M (increase of ~$7.2M). Motion forwarded. Vote: unanimous (3 ayes). Key metrics: average financial assistance per household ~$4,000; roughly 75% of households served remain out of the homeless response system over 24 months; 81% of funds used for move‑in costs.

- Item 14 (Ordinance): ‘‘One City Shelter Act’’ (amend Administrative Code to require targeted geographic distribution of new city‑funded shelters and behavioral health residential and outpatient facilities, require biannual shelter‑equity analyses, and create a 300‑foot buffer in many cases). Supervisor Sahra Mahmood offered substantive amendments; the committee voted to adopt the amendments and continue the ordinance to the July 23 meeting for additional public notice and review. Vote: motion to amend and continue passed (3 ayes). Key points: operative date proposed 01/01/2026; biannual shelter equity analysis tied to point‑in‑time counts; ordinance sunsets 12/31/2031. Departments and community parties requested additional time for public hearing and technical changes.

Why this matters

The committee’s actions move multiple procurement and capital actions closer to execution while also advancing ongoing citywide priorities: stabilizing healthcare benefits for employees and retirees, maintaining essential airport concession services during major construction, expanding city technology licensing and fleet electrification, and preserving and expanding behavioral health residential capacity. At the same time supervisors pressed departments for additional reporting and price‑control guidance on emergency procurements and set a schedule for follow‑up review on the shelter‑equity ordinance.

What departments will do next

- Health Service System staff agreed to provide additional, regular reporting to the Health Service Board and supervisors on provider access and market volatility. - The Office of Contract Administration (purchaser) committed to issue rules and regulations within 60 days of enactment to govern emergency procurements and to supply tariff and price‑control guidance as requested by supervisors. - Homelessness and Supportive Housing and other departments will return with more detailed site‑selection analysis and report as part of the continued shelter ordinance review on July 23.

Meeting context and next steps

The committee’s next scheduled meeting is July 23, 2025; several substantive matters (administrative code emergency procurement amendments and the One City Shelter Act) were continued to that date for additional public notice and technical materials. Items forwarded to the Board of Supervisors will appear on the full board agenda as noted by the clerk (items acted on at the committee are expected to appear on the Board agenda on July 22 unless otherwise stated). The committee recorded unanimous (3‑0) committee votes on the forwarded items.

Ending

The July 16 meeting advanced a broad set of spending, contracting and land‑use actions that will shape city services and capital projects in the year ahead. Supervisors and department staff highlighted the need for continued monitoring of market volatility, stronger procurement rules for emergencies, and more transparent, data‑driven decision‑making on the siting of homeless‑services facilities.

Speakers quoted in this piece: Vice Chair Supervisor Matt Dorsey; Ray Guillen, Executive Director, San Francisco Health Service System; Iftikhar Hussain, Chief Financial and Affordability Officer, SFHSS; Hao Xie, Strategic Sourcing Manager, Department of Technology; Katie Taylor, Landscape Architect, Public Works; Selena Jacarela, Director, Office of Contract Administration; Jeff Sweece, Transaction Team Manager, Real Estate Division; Kelly Kirkpatrick, Director of New Beds and Facilities, Department of Public Health; Emily Cohen, Department of Homelessness and Supportive Housing.