Muni's Future Rides on Two Ballot Measures as Budget Committee Launches Marathon Review

The San Francisco Board of Supervisors' Budget & Appropriations Committee spent more than three hours on May 13 drilling into two-year spending plans for 13 city departments and four enterprise agencies — and the sharpest exchanges landed on the transit system's bet-it-all revenue strategy, a department merger critics say lacks measurable goals, and a climate team being cut to the bone. All three budget items were continued unanimously to May 20.

• SFMTA budget assumes voters approve both a regional sales tax and a local parcel tax in November; failure would trigger 30% staff cuts, elimination of 20 routes, and no evening bus service after 9 p.m.
• Chair Chan challenges DBI-Planning merger, demanding concrete permit-processing metrics and questioning $7M annual investment in OpenGov system
• Department of the Environment's general fund support has dropped 86% in five years, shrinking its clean transportation team from 5 staff to 1.5
• SFO forecasts a record $60 million payment to the General Fund — its highest ever — while navigating sanctuary city tensions and autonomous vehicle integration
• SFPUC proposes $2.2 billion budget with 10.5% water-sewer rate increase; Clean Power SF rates drop 20–25%
• SF Public Library approaches 15 million annual circulations with a 9.0/10 patron satisfaction score

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Muni's Fiscal Cliff: Two Ballot Measures or Bust

SFMTA Director Julie Kirschbaum presented a two-year budget unanimously approved by the SFMTA board on April 21 that protects current Muni and paratransit service, free Muni for youth, and free rides for seniors and people with disabilities. But year two revenue projections rest on an assumption that is anything but routine.

Why it matters: The budget explicitly assumes voters will pass two ballot measures in November 2026 — a five-county regional sales tax (generating roughly $1 billion annually, with approximately $155 million flowing to Muni) and a local parcel tax (roughly $150 million annually). Mayor's Budget Director Sophia Kittler flagged the gamble up front: "In a somewhat unconventional move, we are assuming that in year two of this budget our local and regional measures do pass at the ballot. And if that does not come to pass, we will have some devastating financial choices to make."

Where things stand: Ridership has recovered to 99% of pre-pandemic levels. Muni carries half of all Bay Area transit riders and 14,000 SFUSD students daily. The budget includes $20 million in cost reductions — from eliminated vacant positions, renegotiated contracts, and efficiency improvements — plus $30 million in new revenue from fare compliance enforcement, parking meter increases, cable car fare restructuring, and elimination of the Clipper discount (raising the fare from $2.85 to $3.00). A $200 million state loan provides financial runway through FY26-27. The budget eliminates 54 operating positions and 35 project positions, all currently vacant.

If both measures fail: Director Kirschbaum laid out a stark scenario: "We would be looking at about a 30% reduction in headcount and we would be looking at eliminating about 20 routes. Our workhorse routes would see double the current wait times and crowding. We would not have service after 9 p.m. except our core OWL service." Cable car and F-line historic streetcar service would likely face significant reduction or elimination.

Supervisor Danny Sauter asked for details on the 89 positions being eliminated, and Kirschbaum confirmed all are vacant. Chair Connie Chan probed the management-to-frontline ratio, confirming MEA staff remain under the 2.7% citywide cap.

Public commenter Griffin Lee of Connect SF questioned discrepancies across MTA presentations regarding what share of the agency's budget goes to transit — 77% in February, "nearly 90%" in the parcel tax legal text, and "just over 75%" at this hearing — calling for greater transparency.

What's next: All budget items were continued to the May 20 committee meeting. The committee is expected to request additional detail on MTA garage revenues and the agency's contingency planning.

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Chair Chan Takes Aim at DBI-Planning Merger and Permit System

CFO Alex Koskinen presented the combined budgets for the Department of Building Inspection and the Planning Department. Beginning in FY27, DBI staff and the City Administrator's permit center will transfer to Planning — a structural merger described as focused on efficiency and customer service rather than direct cost savings.

Why it matters: The merger will reshape how San Francisco processes building permits. At the center of the discussion: a $7.18 million (FY27) and $7.38 million (FY28) investment in OpenGov, the sole-source permit modernization platform whose contract expires in September.

Where things stand: Chair Chan mounted a sustained challenge. She demanded specific metrics for measuring merger success — permit review and issuance timelines today versus projected improvements — and questioned the lack of performance data for OpenGov. She cited a San Francisco Standard article quoting a former OpenGov employee who said the company is "not even close to its competitors in terms of feature parity," and demanded to know the backup plan if the system fails.

"I'm not inclined to fund the research and development of OpenGov," said Chair Chan. "What I'm inclined to fund is the development of a permitting system that actually works for San Francisco."

Interim DBI Director David Cain acknowledged that the initial OpenGov implementation schedule has been slowed to ensure proper audit controls and anti-corruption measures, and said the department would need "several years" running dual systems during the transition.

The other side: Chan also referenced a May 12 letter from the Building Inspection Commission raising governance concerns. She read directly from it: "The current San Francisco practice is to ensure that the head of Building Inspection Services is a certified building official reflecting the technical and public safety responsibility of the role. This leadership structure must be preserved."

Supervisor Sauter pushed for a phased timeline showing year-by-year changes: "How much of that can we expect to be improved from a personnel side of the coordination with the merger? How much of that do we think comes from the technology side?"

The city grant portfolio at DBI is fully funded per the mayor's commitment, and the combined management-to-staff ratio is approximately 20:1.

What's next: The committee continued all items to May 20, signaling that supervisors will demand concrete performance benchmarks, a phased merger timeline, and OpenGov accountability data before advancing the budget.

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Environment Department's Climate Team Hollowed Out by 86% General Fund Cut

Director Tyrone Jue presented a budget that reveals a five-year erosion of general fund support for the Department of the Environment — from $2.9 million in FY22-23 to just $391,000 in FY27-28, a decline of more than 86%. Over 90% of the department's funding is now restricted.

Why it matters: The clean transportation team — responsible for EV charger deployment, grant management, and technical support for electrification — will shrink from five full-time employees to 1.5 under the proposed budget. Three positions were already eliminated in prior cuts. A program manager position has been deleted, and an additional position may be cut due to a $200,000 general fund reduction in year two. The Climate Action and Building Decarbonization team is also reduced from eight FTEs to five.

Where things stand: "Under our two-year budget, our clean transportation team moves from 5 FTE to 1.5 in '27 and '28," Director Jue told the committee. He warned the cuts imperil existing grants from LA Clean Incubators, C40 Cities, and PROPEL/CTA funding, and undermine the department's ability to compete for new ones. Jue emphasized the department's track record: "We actually bring in money to San Francisco. Since November '22, the money that we received has been leveraged to bring in more than $85 million in grants to the city."

Supervisor Sauter put the mismatch in sharp relief, noting that transportation accounts for 45% of the city's emissions yet receives minimal staffing. "I found myself on the 2008 DPW Annual Report the other night, and I noted that they were celebrating in 2008 the EV charger pilot," he said. "We're almost 20 years in and it seems like we're maybe just now turning the corner from pilot to program."

CFO Leo Chi clarified that approximately half of the department's $4.3 million total budget decrease is technical — driven by overhead model alignment and refuse rate board adjustments. The SFPUC has partially offset the general fund decline by increasing work orders by roughly $770,000–$820,000 per year.

What's next: The budget continues to May 20. The committee's questioning signals that supervisors may seek to restore some general fund support to prevent the loss of grant-leveraging capacity.

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SFO Hits Record General Fund Payment as Federal, Tech Pressures Loom

Airport Director Mike Nakornket presented SFO's proposed operating budgets of $1.79 billion in FY27 and $1.95 billion in FY28. The airport's recovery has been robust, with employment forecast at 98% of pre-pandemic levels.

Why it matters: SFO's annual service payment to the General Fund — a direct offset to the city's deficit — is forecast at nearly $60 million in FY26, the most the airport has ever contributed, growing to $60.8 million in FY27 and $63.6 million in FY28. No new positions are proposed; the focus is on filling more than 200 existing vacancies. Cost growth is driven by COLA, CPI, prevailing wages, and debt service. The Terminal 1 program is complete with approximately $82 million in savings that could be reappropriated to Terminal 3.

External pressures: Chair Chan pressed the director on three fronts. On federal immigration enforcement at the airport, she urged SFO to develop clearer protocols balancing sanctuary city obligations with federal presence: "I would want to urge you and the airport commission to consider potentially a conversation if necessary, a closed session with your city attorney advice and really reaching an approach of how do you reach that balance." She also questioned autonomous vehicle regulation — SFO has issued a permit for Waymo — and labor issues related to an SEIU First Amendment action on May 1.

Vice Chair Matt Dorsey raised concerns about limited bid competition for airport concessions, citing a city administrator report showing 42% of bids citywide came back with zero or one bidder. Director Nakornket committed to returning with bid competition data.

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SFPUC: $2.2 Billion Budget, Rate Hikes, and a Clean Energy Pivot

General Manager Dennis Herrera and Budget Director Anna Dunning presented the SFPUC's proposed operating budget of nearly $2.2 billion — a 12% increase ($257 million) from the current year, driven primarily by capital costs including debt service for recently completed wastewater projects and the new biodigester facility.

Why it matters: Ratepayers will see combined water-sewer bill increases of about 10.5%. A typical single-family home's monthly bill would rise from roughly $160–$170 to $180–$190. Rate increases adopted by the PUC commission include 7% for water, 15%/14.5% for wastewater, and approximately 7% for Hetch Hetchy Power over two years. However, Clean Power SF rates are decreasing 20–25%.

The capital budget deploys roughly $1.1 billion annually across water, wastewater, and power enterprises. The budget funds customer incentive programs for EVs, solar, heat pumps, and other clean energy transitions, plus ongoing operating funds for community programs previously funded inconsistently. Power enterprise capital investments aim to acquire new customers for Hetch Hetchy Power, though revenue generation from those investments is 10-plus years out.

Chair Chan expressed appreciation for General Manager Herrera's approach to the 9.118 authority governing electricity and battery power purchases, noting the PUC has consistently returned to the board for conversation despite not being required to. A separate capital budget supplemental will be presented next week.

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SF Public Library Nears 15 Million Circulations

COO Maureen Singleton presented the library's proposed $400 million two-year budget — roughly $200 million per year — funded 97% by the voter-mandated Library Preservation Fund.

Why it matters: Circulation has hit record highs three consecutive years — 12.6 million in FY23, 14 million in FY24, 14.5 million in FY25 — and is on track to reach 14.9 million this year. Patron satisfaction stands at 9.0 out of 10. All but five of the city's 27 branch libraries are at 80% or more of pre-COVID foot traffic, with five branches exceeding pre-pandemic levels. The library operates with approximately 735 FTEs, providing a minimum of 73,000 open hours annually, with collections spanning 35-plus languages. Only 2.7% of staff are MEA positions, below the citywide norm.

Vice Chair Dorsey highlighted the Read to Recovery program, which provides free recovery literature at all branches: "The Read to Recovery program has actually now been replicated in several jurisdictions, I think three states. The American Library Association is highlighting that at its conference this year as a national model."

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Port Revenues Rebound Past Pre-Pandemic Levels

Executive Director Mike Martin and Deputy Director of Finance Megan Wallace presented the Port of San Francisco's budget of approximately $234 million in FY27 ($129 million operating, $86.5 million capital), with revenues exceeding pre-pandemic levels. The port faces $1.9 billion in deferred maintenance within its 10-year capital plan.

Key investments include the Fisherman's Wharf Forward initiative, overnight safety and cleanliness staffing, dry dock removal in the southern waterfront, and the Pier 70, Mission Rock, and Seawall Lot 330 development projects. The port is requesting an increase from 307 to 317 budgeted FTEs.

Vice Chair Dorsey discussed the Vending Enforcement Task Force deployed at Oracle Park for 50-plus events last year, addressing illegal alcohol vending along the waterfront and safety coordination in the Mission Rock/Mission Bay area. Both Dorsey and Supervisor Sauter emphasized continued partnership on illegal vending enforcement, which involves SFPD, ABC, DPH, and Public Works.

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Minor Items

• San Francisco Employees' Retirement System: CEO Alison Romano reported a 97% actuarial funded status — far above the 78–81% national average — with no general fund support required. "For every budget dollar that we spend, we've earned $52.33," she said. "A pretty good return on investment."
• Rent Board: Executive Director Christina Varner presented the Rent Board budget; no major issues raised.
• Law Library: Director Diane Rodriguez presented the Law Library budget. Vice Chair Dorsey suggested the city explore centralizing legal database contracts (LexisNexis, Westlaw) across the law library, district attorney, and city attorney offices for better bargaining power.
• Department of Child Support Services: Director Karen Roy presented; no substantive issues flagged.
• Board of Appeals: Legal Assistant Alec Longway presented; no substantive issues flagged.
• Supervisor Mandelman was excused from the meeting by a 4-0 vote.

Looking ahead: All three budget items — the hearing, the appropriation ordinance, and the salary ordinance — were continued unanimously (For: 4, Against: 0, Absent: 1 — Supervisor Mandelman) to the May 20 committee meeting, where departments are expected to return with additional data on merger metrics, OpenGov performance, MTA contingency planning, and the SFPUC capital budget supplemental.