Board approves expansion of Brilliant Corners flexible housing subsidies after debate over $10 million contracting threshold

The San Francisco Board of Supervisors on June 7 unanimously approved the first amendment to a grant agreement with Brilliant Corners to expand the city—lexible Housing Subsidy Pool (FHSP).

The board voted to increase the Brilliant Corners agreement by roughly $30.3 million for a new total of about $40.2 million and extend the term through June 30, 2024; the clerk later described the item as a —ontract amendment not to exceed $40,100,000.

Supervisors pressed the Department of Homelessness and Supportive Housing (HSH) about why the original agreement was set under the $10,000,000 threshold that would have required earlier Board review. Supervisor Preston said he had "no problem with the idea of a smaller contract initially when you're piloting something," but added a pointed procedural question: "I do have an issue with setting contract amounts just below the $10,000,000 precluding it from coming before the board."

Emily Cohen, representing HSH, told the board the original contract began as a pilot during the pandemic and included contingency authority so staff could act quickly to rehouse people in Shelter-in-Place (SIP) hotels. "I will need to consult the contracts team on this, but I believe that this was the initial pilot amount," Cohen said. She said the original budgeted portion of the contract was about $8.9 million and that HSH later added 200 subsidy slots and other funding, which is what triggered the increase brought to the board.

Cohen explained the timing in the context of the pandemic: HSH had been moving quickly to rehouse SIP guests and was under pressure because FEMA reimbursements were expected to end. "We were under enormous pressure from both this board and the Our City Our Home Committee as well as the whole community to get these dollars onto the street as quickly as possible," she said. Cohen said HSH did not intend to "skirt board authority" and that the department planned to return to the board as the program expanded.

Several supervisors said the practice of setting contract amounts just under the review threshold is widespread. Supervisor Preston noted similar patterns in other departments and called for a policy review. "What you're basically saying is you had a contract for a certain amount. You built in as much contingency. You knew you were gonna expand it. And so you built in as much as you could without bringing it before the board, which really makes no sense to me," he said.

Supervisor Peskin and others echoed concerns that the board should see larger contract amounts earlier so it can weigh policy questions tied to subsidy models and program design. Supervisor Paskin called the pattern "legal, but it's not cool," and urged departments to stop routinely relying on contingency to avoid board review.

The board then took a roll call; the clerk recorded 11 ayes and the resolution passed unanimously. The item was described in the file materials as an amendment to fund additional slots in the Flexible Housing Subsidy Pool and to extend the term, and Cohen said the program has been "very successful."

HSH and the clerk provided a mix of figures during the discussion: the packet materials list the proposed increase and totals; Cohen said the original contract had a lower budgeted portion plus contingency; and the clerk at one point referenced a not-to-exceed amount that differed slightly from the earlier item description. The board pproved the amendment and HSH will administer the added subsidies under the terms described.

The board iscussion made clear members want changes in department contracting practice and additional transparency on contingency and threshold planning ahead of future contract approvals.

Votes at the board meeting show the item passed on a unanimous roll call with all 11 supervisors voting yes.