Supervisors hear BLA report, public urges baselining cost-of-doing-business and fuller funding for nonprofit wages

The San Francisco Board of Supervisors’ Budget and Appropriations Committee on April 28 received a Budget and Legislative Analyst (BLA) report that outlines gaps in city funding for nonprofit contractors and recommended steps to improve predictability and data on nonprofit wages.

The report, presented by Dan Goncher of the BLA, reviewed the history of the city’s Minimum Compensation Ordinance (MCO) and the city’s recent allocations to help nonprofits comply. Goncher said the current nonprofit MCO rate is $17.05 an hour and recapped the 2019 Comptroller-led application process that allocated $6.6 million to nonprofits, of which about $2.76 million supported direct wage increases and $3.8 million addressed wage compaction. He said the BLA’s two key recommendations are that the Board ask the Mayor’s Budget Office and the Comptroller to explore regularly setting a CODB funding level (including anticipated MCO needs) and to ask the Comptroller to lead a periodic (every 3–5 years) survey of nonprofit contracting partners to gather workforce and funding-source data.

HSN (the San Francisco Human Services Network) leaders and union representatives told the committee the city’s nonprofit contracts are underfunded, that CODB and MCO support has been inconsistent, and that the result is high turnover and recruitment challenges. Sherilyn Adams of Larkin Street Services and Bridal Andrews of PRC asked the Board to move toward an ongoing 3% CODB increase, stronger pay-parity work with city wages, and attention to racial and cultural equity in workforce funding.

Labor speakers including Rams Estelle Nichols (SEIU Local 1021) and John Avalos (NUHW) urged the committee to pursue parity with city worker pay and to consider a prevailing-wage approach for nonprofit workers. They told the committee that turnover undermines service delivery in behavioral health, homeless services and other mission-driven programs.

Supervisors focused on two practical policy questions: whether the Board can require an automatic CODB floor (for example 3%) and how to make CODB/MCO funding more predictable during the annual budget process. The controller’s office (Bridal Sandler) and the Mayor’s Budget Office (Ashley Graffenburger) said CODB and MCO have historically been treated as annual appropriations and that implementing an automatic mechanism would require legal analysis and a decision about the appropriate venue (legislation, admin-code change, or potentially a charter amendment). Deputy City Attorney Anne Pearson said she will research the legal avenues and report back.

Across more than a hundred public comments, nonprofit staff, executives, union members and clients urged the city to baseline the one-time 3% nonprofit emergency relief and to adopt ongoing CODB and MCO funding sufficient to retain frontline staff. Callers described staffing shortages, high turnover, long commutes, and programs that cannot meet demand without higher pay for nonprofit workers.

The committee voted to file the hearing (motion moved by President Walton, seconded by Supervisor Ronan). A subsequent procedural vote continued Item 2 (a separate presentation on small-business relief) to the May 5 Budget and Appropriations meeting. Both roll-call votes recorded Ayes from Members Marr, Ronan, President Walton and Chair Haney; Vice Chair Safa(e) was absent.

What’s next: The BLA’s recommended next steps are administrative and procedural: the committee can request that the Comptroller and Mayor’s Budget Office study options for regular CODB setting and that the Comptroller consider periodic nonprofit surveys to produce better, up-to-date cost estimates for MCO and wage-compaction impacts. The Deputy City Attorney will advise on legal mechanisms for embedding recurring CODB funding in contracts or the budget process.

Clarifying details: the BLA and controller referenced past estimates and budget amounts on the record. The council recorded that approximately $12.6 million was set aside as a one-time 3% CODB adjustment in the prior budget (partial year), which the controller estimated would annualize to about $18 million. The BLA cited a prior working-group estimate of roughly $12.7 million to directly fund MCO wage increases; both figures were presented as estimates based on 2019 survey data and described as subject to validation.

The committee did not adopt an ordinance or change contract language at this meeting; it filed the hearing and signaled interest in moving the recommendations forward during the budget process and via follow-up legal and fiscal analysis.