OCII holds first FY2016-17 budget workshop; staff outlines major projects and residents press contracting, bonding concerns

OCII convened its first workshop on the fiscal year 2016-17 budget on April 5, with staff presenting programmatic budgets and work plans for Hunters Point Shipyard/Candlestick Point, Mission Bay and Transbay and outlining affordable-housing production, bond and grant sources, and near-term activities.

Deputy Director of Finance Bree (presentation lead) said this was the first of two budget workshops before the Commission will consider the full operating and debt-service budget in May; staff will then submit the final budget to the Mayor27s office and face a Board of Supervisors hearing on June 8. Project managers described a robust pipeline: Hunters Point/Candlestick anticipates roughly 12,000 housing units across program phases with about one-third affordable, Mission Bay has a multi-block office and housing pipeline including projects that will add hundreds of units this year, and Transbay continues land closings and streetscape and park work supported by bonds.

Housing and financing highlights presented included grant and remediation funding from Cal Reuse and the Economic Development Administration, $80 million in new BROM proceeds targeted primarily for housing-related activity at Hunters Point, and a roughly $97 million housing-capital funding request in the proposed Mission Bay/Transbay pipeline. Jeff White, housing program manager, said the agency expects several hundred affordable units to move toward construction and loan commitments in the coming year.

Public comment at the budget workshop shifted focus to long-standing contracting and equity concerns. Multiple speakers from Bayview and Fillmore raised issues about local minority contractors being excluded from prime contracting roles, delayed or missing subcontractor payments, and difficulty meeting bonding requirements. A public commenter who identified himself as Clyde Miller said the developer and contractor "have not lived up to that obligation" and asked the Commission to help "make them live up to their contract obligation." Another commenter asked, "How do we get around the bonding issue?" and urged the Commission to use its leverage to lift local contractors into larger prime roles.

Staff and commissioners responded that OCII monitors contracting and workforce compliance and has taken steps such as clarifying SBE policy to encourage joint ventures and prime-level opportunities. Contract Compliance staff summarized recent contracting activity and said, for active Hunters Point projects reporting through March, roughly 47 percent of contracting dollars were with small businesses and about 18 percent with San Francisco small businesses; about 8.5 percent of the reported dollars were with Bayview-Hunters Point area firms. Staff cautioned that developer-driven subcontract awards occur in phases and figures are still maturing for projects in early buy-out.

Commissioners requested additional, itemized statistics and follow-up on SBE policy options. Chair Rosales proposed a focused review (potentially a special hearing) with the executive director and general counsel to consider amendments to the SBE policy that could expand prime-level participation or require joint ventures, and to evaluate legal constraints. Staff said they would return with more data and options at the next workshops and hearings.

Next steps: staff will present the operating and debt-service budget in the next commission meeting; the Commission will consider a final budget in May for submission to the Mayor27s Office; the Board of Supervisors hearing is scheduled for June 8. Separately, staff agreed to provide additional contracting breakdowns and to explore practical mechanisms to expand small-business access to developer-led projects.