Clerk Community Members will attend the meeting through Video Conference and participate in the meeting to the same extent as if they were physically present. Public comment will be available on each item on this agenda, both channels 10 and 26 and sfg. Org are streaming the message across the screen. Comments during Public Comment are available by calling 4156550001, 1451400281, then press pound twice. When connected, you will hear the meeting discussion, but you will be muted and in listening mode only. When your item of interest comes up, dial starthree to be added to the speaker line. Best practice is to call from a quiet location, speak slowly and clearly, and turn down your radio or television. In the alternative, you may email me, linda. Wong sf. Gov. Finally, cantonese and spanish interpretation are available. Chair fewer thank you, madam clerk. Will you please read item number 1. Clerk yes. Hearing on the budget for the Mayors Office of housing and Community Development including an analysis of changing over the last decade. Chair fewer thank you very much. We have mohcd director eric shaw with us today, and then, after his presentation, we will hear from our budget and legislative analyst. Thank you very much. Sorry about that, madam chair. Im sharing my screen right now. Chair fewer sure. That is not correct. Had to switch computers. Chair fewer is it more convenient for us to hear from the b. L. A. First . Yes, yes, maam. I apologize for that. Chair fewer okay. If you wouldnt mind, a b. L. A. Report on item number 1, please. Just loading my slides on. Okay. Good afternoon, chair fewer, members of the committee. Dan goncher from the budget and legislative analysts office. Chair fewer excuse me. I think this is the wrong topic. Hi, you are correct. I am so sorry. Chair fewer i think we saw that one last week. So sorry. Yes, let me pull up the correct slides. Okay. Here we are. So here are my slides for the presentation for our analysis of the Mayors Office of housing and Community Development. As you may remember from last week, for each of the four reports that we are providing for the budget and appropriations committee, we have been asked to provide a breakdown of the divisions within the department, including information about the purview of each division and program, the tenured look back of budget and f. T. Es for the department by division, and the total amount contracted out of each division in the last ten years. In addition, we were asked to include impacts of covid19 pandemic, including specific policy questions, which i will go into in a few minutes. So mohcd is made up of four functional divisions. This include finance and administration, Community Development, Home Ownership and market rate, and housing. In addition to these divisions, mohcd administers the hope s. F. Program, which is the cross Sector Initiative to rebuild four large Housing Developments in the city. The finance administration definition manages the financial Human Resources and technological resources of mohcd. Community Development Works with Community Based organizations to provide services to city residents, such as city services, hiv aids housing, and support services, Service Management and Case Management housing counseling, and neighborhood support. As part of this division, the department is responsible for administering major federal Grant Programs, including the cdbg and housing opportunities for persons with aids program. The Housing Division monitoring and manages the citys Inclusionary Housing Program where housing remains accessible and affordable for people it is intended and whom required to serve. And the Housing Division invests in Affordable Housing projects, including new construction asing as acquisition and rehabilitation of public and private housing stock. Further, this Division Guides and coordinates the citys housing programs and policies, with responsibilities to the financing of Affordable Housing and expenditure of significant federal, state, and local funding. Over the last ten years, we have gone through money changes, including the development of the San FranciscoDevelopment Agencies residual operation, including 125 million in assets and a budget of 13,000,010 fulltime positions. Mohcd continues to manage assets. Mohcd also assumed oversight responsibility for the San FranciscoHousing Authority last year at the request of the u. S. Department of housing and urban development. Mohcds budget increased by 2 million to fund 17. 83 million f. T. E. S that were added as place holders for the transition of the Housing Authority. The number of affordable units exclusive of Home Ownership has increas increased from 8700 to 23,000 in fiscal year 201011. The number of Home Ownership units increased from 1600 to 4400 in the last ten years. Community Development Grants to c. B. O. S have increased from approximately 10 million to over 60 million in the current year. Further, there have been at least seven significant new sources of funding set up over the last ten years, which are listed on this slide looks like i might have lost control. Looks like the mohcd slides have been put up. Chair fewer yeah. Madam clerk, are you able to assist with this . Clerk yes, i can give that a try. I will continue speaking in the interest of time here. Okay. So so as i was saying, over the last ten years, there have been at least seven significant sources of funding set up over the last ten years. These were in addition to the Affordable Housing fund, which was set up in 2002 for collector fees pursuant to rarus planning code sections and used for various housing or housing code linkage fees, typically used for gaps in rental housing. Chair fewer excuse me for a moment, mr. Gonchar. This is the slide, i believe, madam clerk, for item number 2. Clerk my apologies. Chair fewer thats okay. Mr. Gonchar, do you think that it is necessary for you to have the video or do you think that you its okay for you to explain it with im so sorry about our technology here. Yeah, i can explain it without the technology if you want. Chair fewer yeah, mr. Gonchar. Please continue with your report. Thanks. Okay. All right. Sure. So all of these organizational changes are reflected in the growth of mohcds growth and staffing budget over the last ten years. So the offices current year total adopted budget is 317 million. This is up from about 8 million in fiscal year 201011. While the current year approved totalled 317. 2 million, its important to be aware that as of april 13, supplemental appropriations totaling almost 93 million and additional Expenditure Authority granted to mohcd added 132 million for a total of 561. 3 million in new Expenditure Authority since june 30 of last year. Combined with 173 million of funds carried forward, mohcd had 1. 3 billion total. Much of these funds are restricted in use for federal and state guidelines, bond restrictions, and the a. E. O. Clearly represents only a portion of the mohcds operation. The departments currently total year fund budget is 151 poin 151 . 5 million. This is up almost 100 fold from 1. 5 million in 201011. The departments total fulltime equivalent position in fiscal year 201920 are 131. 4 the current year allocation for the Affordable Housing function is about 241 million, about 47 of which comes from federal fund support and eraf surplus. The current year Budget Allocation for mohcds Community Development function is about 67 million, approximately 39 million or 58 of that comes from the general fund support. Over the last ten years, this function experienced Significant Growth totaling 65 million. And between last year and the current year, the budget increased 68 just in that oneyear change. Direct general fund support of grants to Community Based organizations has driven much of this increase. In fiscal year 201920, similar to Affordable Housing function, Community Development function budget growth including eraf surplus funds of about 18. 6 million. The Homeless Services function is entirely made up of mohcd grants to communitybased organizations for the local operating Subsidy Program which pays the difference between the cost of operating Supportive Housing which houses formerly homeless persons and all other operating revenue. At the current, these grants are 100 reimbursed to mohcd by the department of homelessness and Community Housing. If you look back at the last ten years, the one notable area where there has been contracted services is for the formation of dahlia, the online housing portal which began in fiscal year 201516. Approximately 6 million was spent on professional Service Contract with two vendors for the development of dahlia. Funding for Affordable Housing related grants to communitybased organizations began in 201314 with the establishment of the Housing Trust fund, these are typically for eviction prevention and housing counseling and totalled 52. 3 million in the current year. According to the department staff, the primary impact is covid19 on Department Services has been a partial slow down in Housing Development with materials and supplies more difficult to obtain. Additionally, the Community Grant process to award funding to Community Based organizations han been placed on hold has been placed on hold funding funding and priority decisions to be made by the Mayors Office. There are no direct impacts to revenues, however, mohcd anticipates that developers may ask for a deferral of amortized loan payments since the developer revenue is supported by tenant rent. The board of supervisors is considering a package of covid19 emergency relief policies for Affordable Housing owners that could reduce annual loan repayments to mohcd by 16 million. Additionally a slow down in office spaceresidential construction may reduce future inlieu fee revenues. And now, for the policy question portion of our report, there were two policy questions. One was to provide more information on the Decision Making process for Community Development grants to c. B. O. S, and the second policy question was to provide more information on the Decision Making process for the allocation of funding for housing projects. For Community Development grants and c. B. O. S, mohcd funds a variety of Community Based services, which includes eviction prevention, Legal Services, and Housing Services for those living with hiv aids. They also issue reports throughout the year or in the fall for federally funded fall capital grants. Fiveyear funding cycle r. P. Allocations to specific areas are categorized into different strategies and given an estimated delivery range. While fundings in the current r. F. P. Appropriated from mohcd while funding in the current r. F. P. Is funding from mohcd, it also included other funds. In paendix two, it provides the scoring and relation details. Of note, while the first scoring round provides for participation from Community Members with expertise in the related areas, the scoring process heavily relied on mohcd staff and mohcd and the city main control over the funding decisions. Draft funding recommendation for the fiveyear cycle that is to start on july 1 were made public on january 15. A review of the funding recommendations by our office found that our estimates were not necessarily in the allocation range in the r. F. P. Which are included in appendix one of our report. A public hearing was held on february 4. The Public Comment period ended on february 21, and negotiations of grantees were expected to occur during april of this year, with construction to start may 1. However, the director of Community Development reported to our avenues that the Mayors Office requested that the notification be delayed due to covid19 and uncertainty around the Budget Office, Funding Availability, and input received at the public hearing that was held on february 4. The director of Community Development reported to us earlier this week that he has not received final approval as to a revised timeline or funding levels for these grants and c. D. O. S. The second policy question was around the Decision Making process for funding of housing projects, and what weve learned is mohcd has developed a pipeline of projects that allocates the funding either to specific projects identified by geographic location or to general programs or development phases. These projects are specifically named unless a project has not been identified for a Funding Source because of specific constraint. The pipeline provides a financial forecast for the projects and includes estimated balances, revenues, and uses for the current year and for two years out. Some restrictions provide for additional processes that include oversight and assistance ensuring the funds are appropriately expended. Typically, the development or housing rehabilitation funding is made available through a notice of Funding Availability or through r. F. Q. S or r. F. P. S, processes that are public and competitively bid. Additionally, the citywide Affordable Housing loan committee, an advisory currently comprised of the director of mohcd, ocii, h. S. H. , and the Housing Authority, holds Public Meetings to review and make recommendations to the mayor. This committee specifically reviewed loans for predevelopment or gap availability housing. Mohcd ensures that these restrictions and opreviews are open to the public. Funding and allocation decisions must be made in terms of the scope and size of programs, funding allocations and populations served, project timing, delivery and funding methods, ability to leverage other financing, and more. All according to mohcd staff, the office works with members of the board of supervisors, the mayor, and Community Stakeholders when considering the allocation of funds to housing projects. Further, mohcd staff notes that the office may pursue direct acquisition when a Market Opportunity arises and there is funding available. Outside of the restrictions on certain funds as detailed on pages 23 and 25 of our report, mohcd reports that local funding decisions are based on one, the availability of Funding Sources, two, the timing of application and awards of other leveraged Funding Sources, and third, the projects development timeline. During the board of supervisors review of the fiscal year 2020 throu through 29 Capital Funding plan last year, on may 11, the Capital PlanningCommittee Approved a resolution formally incorporating Affordable Housing into the fiscal year 2022 through 2031 capital plan, and the resolution was received and assigned to the budget and finance committee on may 12. While mohcd seeks approvals from the board of supervisors through the Housing Development phases and provides reports due to city ordinance, the quarterly reports do not provide details how the funding came to mohcd for approval or how the approval has been made. The recommendation to the board of supervisors is the board of supervisors should consider amending the administrative code to require mohcd in its quarterl