Budget committee advances election funding, Treasure Island treatment project and hardware tax break

The Board of Supervisors' Budget and Finance Committee voted to add $658,000 to the Department of Elections budget for the statewide November 2026 election, money the department says will speed up ballot processing and expand outreach to voters.

The appropriation is San Francisco's share of a statewide allocation of state money rather than local tax revenue. Department staff told the committee that most of the money would buy and rent ballot sorting, envelope opening and roster scanning equipment, that a portion would pay for temporary workers and around-the-clock operations starting on election day, and that a smaller share would go to voter outreach. The city's budget analyst recommended approval and said the ongoing licensing and maintenance costs could be absorbed within the department's existing budget.

The committee asked whether the state's contribution was adequate. Staff said the city's ballot processing capacity is now sufficient, but that state law still keeps the county from certifying results for weeks after election day because of the volume of vote-by-mail ballots. No one spoke in public comment. The item goes to the full board with a positive recommendation, along with everything else the committee took up.

The committee also forwarded a state grant of $14,184,580 for a behavioral health project at 415 Trade Winds Avenue on Treasure Island. The money comes from the California Department of Health Care Services through the Behavioral Health Continuum Infrastructure Program and would pay for construction of a residential substance use treatment building with transitional recovery beds.

Department staff said operating costs would be mostly covered by public health insurance reimbursement, with the city paying the rest. A committee member asked whether changes to federal Medicaid policy could affect that reimbursement and was told the rates are expected to hold. The department also sought approval of nonstandard grant terms, including a long declaration of restrictions on the property, a receivership provision and an indemnification clause. The award is retroactive to a conditional award made earlier this year.

The committee voted 3-0 to recommend an ordinance creating a retroactive gross receipts tax credit for small hardware retailers. The credit is limited to retailers that make most of their money from hardware products, a threshold meant to exclude larger stores, and it would run for several years.

Two owners of long-standing neighborhood hardware stores told the committee their tax bills had roughly doubled since the 2024 business tax overhaul, and described thin margins and the service their stores provided during the pandemic. The ordinance responds to complaints that those stores were unintentionally caught by that overhaul. The comptroller's office filed no economic impact report and reported no fiscal effect.

The committee also authorized the Tax Collector to sell a single tax-defaulted property at public auction, after amending the resolution's short and long titles to include the property's street address and assessor's parcel number. The tax collector's office said the parcel became newly eligible for a standalone sale because it has been tax-defaulted for years, and that the usual schedule would have pushed the sale further out. Staff cited an unusually large outstanding balance, a minimum bid and fraudulent deeds that had been recorded against the property.

Staff said everyone holding recent title or a lien would be notified and given a chance to redeem, that the statutory process is designed to protect the owner's rights, and that any excess proceeds would be held for the rightful owner. The committee asked about the office's due diligence and whether the sale could amount to a taking under the Constitution, and members said the facts were unlike anything the committee had handled. No one spoke in public comment.

At San Francisco International Airport's request, the committee amended and forwarded a third modification to its shuttle bus contract with SFO Hotel Shuttle, Inc., raising the not-to-exceed amount to $98,575,004 with no change to the contract's term. The increase covers expanded regional commuter routes, higher than budgeted labor and operating costs, and additional airfield bussing.

Airport staff said the contractor maintains the airport-owned buses and generally meets or exceeds expectations, but that incident reporting and responses to customer complaints need improvement; a new tracking tool was put in place this year. The budget analyst recommended trimming the not-to-exceed amount to match a revised budget, and the committee amended the resolution to accept the reduction.

The remaining items moved to the full board without debate or public comment. They include a $525,000 Crankstart Foundation grant for the Access to Hope Initiative, which takes young people from neighborhoods hardest hit by crime on a civil rights trip through the South, and a $300,000 federally funded state grant for a probation unit that supervises domestic violence cases and coordinates with victim advocates. Another grant accepts a further round of federal money for HIV and STI prevention research, bringing that award to $181,434.

The committee also forwarded a five-year lease at Pier 96 with NorCal Rental Group, LLC for storage and parking of construction vehicles, two five-year leases at 1290 Fillmore Street and 1533 Eddy Street for a city maternal and infant health program, and a one-year extension of the Navy's master lease on Treasure Island, which carries no rent and no budget impact.