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Committee advances $157,500 loan and appropriation for LGBT Community Center with interest-rate amendment
Summary
The Budget and Finance Committee voted 2–1 to send a $157,500 loan and matching appropriation for the San Francisco LGBT Community Center to the full Board of Supervisors, with an amendment tying the loan's interest to the City Treasurer's current pooled-investment rate. Budget staff warned that federal CDBG Section 108 funds are possible but would take months and require an income certification.
The Budget and Finance Committee voted to forward to the full Board of Supervisors a $157,500 loan and an ordinance appropriating $157,500 from the general fund reserve to the Community Center Project of San Francisco, the nonprofit that runs the city’s LGBT Community Center.
Harvey Rose, the committee’s budget analyst, said the office recommends amending the resolution and the promissory note so the city is reimbursed “at interest rates that equal or exceed the interest rates earned by the treasury tax collector on monies in the city's pooled investments” during the loan period. Rose also told the committee that federal Section 108 (CDBG) loan funds are an option but would take about six months to secure and would require certification that 51% of the center’s users are low- and moderate-income.
Miss Rolfe, representing the LGBT Community Center, summarized the center’s business plan as “very conservative,” saying it assumes no program growth and uses modest revenue projections. She said the center is pursuing new revenue streams including expanded commercial leases and a stepped program to grow individual giving, with the board and added staff focused on fundraising.
Supervisor Campos, a cosponsor, described the center as a longstanding community institution and noted the city previously invested about $5,700,000 in the facility. “As a member of the LGBT community, I can tell you firsthand that the LGBT center plays a very important role in the life of the community,” Campos said, urging the committee to move the item forward.
Supervisor Dufty framed the request as a narrow protection of the city’s prior capital investment and described programmatic successes at the center, while acknowledging the fiscal strain on other cultural nonprofits. Dufty said the $157,500 support “is not to pay the mortgage” but, according to his analysis of the center’s terms, the arrangement would save the center roughly $40,000 a year in interest costs over five years.
Supervisor Ellsburn recorded the committee’s main fiscal concern: he warned that formalizing a loan guarantee could place the city at financial risk. “I just don't think we should be doing that,” he said, and indicated he could support the appropriation but not the loan guaranty. On a roll call, Ellsburn voted no; Supervisors Ross Merkurimi and Chair John Avalos voted aye. The motion passed 2–1 and both items were sent to the full board with the recommended amendment tying the loan rate to the Treasurer's rate.
The committee record shows the center currently expects contractual city payments totaling $584,810 in 2009–10 for programs and services. Budget staff told the committee that the center has been negotiating a modified loan with First Republic Bank and that timeliness on the loan terms is important to the lender.
The Board of Supervisors will consider the amended resolution and ordinance at its next scheduled hearing.
