SF Moves to Slash Grant Red Tape, Lifting Approval Threshold to $1 Million

The San Francisco Board of Supervisors' Budget and Finance Committee advanced an ambitious plan to cut bureaucratic delays on grant funding, raising the threshold that triggers board approval tenfold — from $100,000 to $1 million — while simultaneously cleaning up pandemic-era fiscal loose ends and keeping the city's independent budget watchdog funded.

• Grant approval overhaul would eliminate board review for 54% of grants, freeing departments to pursue smaller funding faster
• Two key amendments added: a $200,000 cap on grant increases that bypass review, and an exemption for pro bono legal services tied to Trump administration litigation
• Pandemic-era restaurant lease formalized at a Union Square garage, generating $241K annually for transit operations — with 13 more restructured leases still in the pipeline
• Budget analyst contract gets 4.5% COLA, keeping the Board's independent watchdog funded through 2031

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Cutting the Red Tape on Small Grants

Board President Rafael Mandelman brought a proposal to rewrite the rules on how San Francisco handles grant funding — and his colleagues were quick to rally behind it.

The basics: Under the city's Administrative Code, any grant of $100,000 or more requires a formal accept-and-expend resolution before the Board of Supervisors. That threshold was set in 2012 and hasn't been adjusted since. President Mandelman's ordinance would raise it to $1 million, matching the federal single audit threshold.

Why it matters: The gap between the current $100,000 floor and the proposed $1 million ceiling isn't just a number — it represents hundreds of grants that tie up department staff in approval processes for relatively modest sums of money. According to the Controller's office, more than half the grants reviewed by the Board between 2018 and 2025 would not have needed approval under the new threshold.

"When staff in different city departments are thinking about applying for different grants, they have to calibrate their own workload, their ability to carry this through an approval process, and balance whether it's worth it, given the size of the grant," said President Mandelman. "This will tilt those scales a little bit more towards seeking the grant funding."

BLA Senior Analyst Nick Renard confirmed the trade-off is manageable: while 45% of grants reviewed between January 2025 and April 2026 fell below the new threshold, those grants represented only about 2% of total grant revenues. The Board would still approve the vast majority of grant dollars flowing into the city.

Where things stand: President Mandelman introduced two substantive amendments that the committee adopted before continuing the item. The first closes a loophole: under existing rules, a large grant could receive a substantial dollar increase without triggering board review as long as the increase stayed below 110% of the original amount. The amendment adds a hard cap of $200,000 on any grant increase that bypasses the Board.

"The gap that we've identified is that large grants could receive a substantial dollar increase and still fall under that 110% threshold and bypassing board review," President Mandelman explained.

Pro Bono Exemption and the Trump Litigation

The second amendment carves out an exemption for pro bono legal services at the City Attorney's request. Deputy City Attorney Brad Russi explained the practical problem: requiring board approval for donated legal work means publicly disclosing the identity of firms providing assistance — information that is often privileged during active litigation.

"Outside law firms are more willing to provide pro bono support on high-profile matters when they're not required to publicly disclose their involvement while a case is live," Russi said. "Requiring board approval can discourage firms from stepping forward."

The exemption carries immediate significance given San Francisco's ongoing litigation against the Trump administration, where outside counsel willing to donate time could prove critical.

Decisions: Vice Chair Matt Dorsey was enthusiastic, asking to be added as co-sponsor after hearing the cost-benefit argument. "I'm actually really persuaded by the point you made about being in a city department and having to assess — this is going to cost us $25,000 to get this $15,000 grant — that we might be leaving a lot of money on the table," he said.

Chair Connie Chan noted the new threshold aligns with the existing $1 million contract revenue threshold already in city code. "I find that accept-and-expend grant versus contract or versus revenue generated from contract at $1 million to be consistent," she said.

Amanda Freed from the Treasurer's Office spoke in public comment supporting the legislation, identifying herself as a bureaucrat who spends significant time on accept-and-expend processes and expressing gratitude for the proposal — while humorously noting she would miss her regular Wednesday morning committee appearances.

The committee voted 3-0 to adopt both amendments and continue the item to the July 8 meeting (For: Chan, Dorsey, Sauter; Against: none; Absent: none).

What's next: The amended ordinance returns to the Budget and Finance Committee on July 8 for final consideration before heading to the full Board.

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Pandemic Lease Cleanup: Tad's Restaurant Formalized

The committee also moved to formalize one of the city's lingering pandemic-era fiscal adjustments — an amended lease for Tad's Inc., a restaurant at 44 Ellis Street in the Ellis O'Farrell Garage near Union Square.

Why it matters: During the pandemic, SFMTA verbally switched many commercial tenants from fixed rent to percentage-of-revenue structures, following City Administrator guidance. Those informal arrangements need formal amendments — and Tad's is just one of 16 SFMTA leases in that pipeline. Only three have been formalized so far, with 13 more still waiting.

SFMTA Real Estate Manager Keziah Tang presented the key terms: a 10-year lease expiring April 30, 2029, with two five-year extension options. Rent is set at 8% of gross revenues during the initial term, converting to fixed rent if options are exercised. "The rental projection conservatively is about $241,281, equivalent to $44.95 per square foot, which exceeds the fair market comparable value of $43.03," Tang said.

BLA Senior Analyst Nick Renard confirmed the deal is above market, noting the lease "is generating about $241,000 a year in rent to MTA that's used to pay for transit operations at MTA, and it exceeds the market rent that was what an appraisal showed would be market rent for this space by a couple dollars per square foot." The BLA recommended adding retroactive language to reflect the amendment's effective date.

Supervisor Danny Sauter noted the familiarity of the process. "This is, I think, in many ways similar to something we saw before this body a few months ago in District 6," he said. "We're seeing these to square up what was discussed during the pandemic and formalizing that."

Decisions: The committee voted 3-0 to amend the resolution with retroactive language and send it to the full Board with a positive recommendation (For: Chan, Dorsey, Sauter; Against: none; Absent: none).

What's next: The resolution goes to the full Board of Supervisors for final approval. The remaining 13 SFMTA pandemic-era lease formalizations are expected to follow in coming months.

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Minor Items

• BLA contract COLA approved: The committee voted 3-0 to approve a 4.5% cost-of-living adjustment for the Budget and Legislative Analyst's contract with Harvey Ambrose Associates, LLC, increasing the annual amount by approximately $152,000 — from roughly $3.4 million to $3.5 million. The total not-to-exceed contract amount remains $36 million through Dec. 31, 2031. Board CFO Edward de Asses noted the Controller's office has certified the contract generates savings for the city. No public comment was received.