Supervisors decline to release $754,129 for interim data‑center equipment; reserve remains

The Budget & Finance Committee voted on March 18 not to release $754,129 in reserve funds that the Department of Technology (DT) sought to buy networking equipment for an interim data‑center location at a commercial hosting site the department calls 200 Paul.

DT Deputy Director John Walton told the committee the city’s mission‑critical systems are currently housed at 1 Market Plaza, a facility that was converted from office space and lacks redundancy in generators, battery backup and power density. Walton described a long search for a permanent center and said the department had identified three options — a commercial retrofit (the preferred lower‑cost option), Brooks Hall and a retrofit of 1 South Van Ness — with retrofit costs ranging from roughly $5–11 million for the commercial option up to $30–50 million for greenfield approaches. He said 200 Paul rents for about $63,000 per month and would allow denser, more power‑efficient equipment installation than 1 Market, which he said bears roughly $83,000 per month in current costs and is power‑constrained.

Budget analyst Deborah Newman told the panel the cash being requested was placed on reserve for a permanent data center during the budget process and that using it now for interim leasing represents a policy shift the board should scrutinize. Newman also flagged that any equipment and lease payments made for an interim site would likely be duplicated when the city moves to a permanent facility and noted that approximately 61% of the requested release would be general fund exposure (about $463,000).

Supervisors questioned the length of time it has taken to select a permanent site and pressed staff for consultant reports and a clearer timeline. Walton said delays were caused by multiple consultant procurements and pauses while new options were vetted, and offered to provide the 2006 cooling‑systems report and updated analyses. Real estate assistant director John Updike reviewed leasing history at 1 Market and confirmed the city is now on a month‑to‑month hold there.

When the committee put the request to a roll call vote, the motion to release the reserve failed (5 No, 0 Yes on the substantive release vote), leaving the $754,129 on reserve rather than available to DT. The committee did hold a prior procedural voice vote that rejected a motion to continue consideration to the call of the chair (3 No, 2 Aye).

The committee asked DT to return with more documentation on the consultant reports, a semiannual progress report as requested by the budget analyst, and a clearer schedule showing the anticipated overlap and migration plan between 1 Market and 200 Paul. The city will continue to pay to house mission‑critical systems at 1 Market until a replacement is fully operational.

The committee’s decision keeps the reserve intact; any future request to tap the reserve must return to the board for review.