Budget and Finance Committee releases PermitSF funds and advances bond sales

The Budget and Finance Committee on Wednesday released millions of dollars in reserved funding for PermitSF, the city's building-permit software system, and sent a related contract to the full Board of Supervisors without a recommendation after a lengthy review of the project's procurement and performance.

The release covers the Planning Department's PermitSF license and professional services: $5,049,224 for fiscal year 2026-2027 and $7,663,478 for fiscal year 2027-2028. The Department of Building Inspection would receive $272,513 and $293,862 for temporary PermitSF implementation staff over the same two years. The release is contingent on the full board approving a contract amendment, which the committee forwarded without recommendation. The committee also continued a separate hearing on the procurement process to a later meeting without scheduling a return date.

Those who spoke against the release described the underlying procurement as noncompetitive, said the city had not set standardized evaluation criteria, and pointed to unclear deliverables and delays. Supporters said the city needs to modernize its permit system and noted that a new annual termination-for-convenience clause in the amendment would let the city end the contract if problems continued. The committee voted unanimously to release the funds. Its no-recommendation referral left the contract amendment for the full board to consider.

Another item that drew public comment was a proposed Police Code ordinance prohibiting the retail sale of nitrous oxide, with specified exceptions. The committee voted 3-0 to continue the measure without a decision. Public testimony described health risks from inhaling the gas and dangers that discarded canisters pose to waste and recycling workers. A union representative objected that the public health agency had not notified the union and asked to meet before the measure advanced. The committee said it wanted enforcement and labor-notification questions resolved first.

Much of the remaining agenda was debt-related and passed unanimously. A combined presentation covered sales of several general obligation bond series, including an earthquake safety and emergency response issue not to exceed $215,000,000 and a $47,464,550 taxable sale described as the final issuance for the 2016 Affordable Housing Preservation and Seismic Safety program. The presentation said loan repayments would reduce the cost of the housing sales to taxpayers. Committee members asked whether the issuances would stay within the city's debt and tax-rate policies, then referred the package to the full board.

A separate financing item authorizes certificates of participation, a form of city debt, in an amount not to exceed $43,000,000 for Recreation and Park Department projects, repaid from Open Space Fund property tax revenue. The committee adopted an amendment removing language that would have let the certificates be supported by commercial paper, noting that they are secured by the Open Space Fund rather than the city's general fund. The financing also refinances an outstanding Open Space Fund lease revenue bond. Both measures were referred unanimously.

The committee also sent the full board a package of five retroactive grant agreements from the Affordable Housing Opportunity Fund. Three were discussed in detail. A grant not to exceed $2,559,101 to 160 Freelon Housing Partners, LP will subsidize rents, including for disabled residents. Another, for an existing single-room-occupancy hotel serving formerly homeless and very-low-income residents and not to exceed $4,493,845, was amended to correct the recipient's name before the vote. A third, not to exceed $3,798,723 to MHDC South Park Properties, LP, will lower rent burdens in scattered-site single-room-occupancy buildings, including some units for disabled residents. The committee approved the agreements unanimously.

The grants are retroactive, meaning the spending was committed before the board formally authorized it. Actions the committee took on Wednesday are expected to appear on the Board of Supervisors' agenda for Sept. 15.