DBI says two-year budget would spend down nearly all reserves; SRO tenants urge keeping $5.2M in city-funded programs
January 30, 2023 | San Francisco City, San Francisco County, California
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San Franciscos Building Inspection Commission on Monday heard a preliminary two-year budget from the Department of Building Inspection that would use most of the departments reserves and relies on a fee study due in April to restore projected revenue.
Alex Koskinen, DBI deputy director for administration, told commissioners the department currently plans to use about $33,600,000 of savings in one year and about $21,100,000 of available fund balance in the other, for a proposed total draw of roughly $54,700,000 across the two-year period. He said staff modeled a conservative, "worst-case" 18% year-over-year drop in permit revenue and incorporated a placeholder of about $13,600,000 from a pending fee study for FY2024-25, but that final policy decisions will be made during the mayors phase of the budget.
Why it matters: DBI is an enterprise department whose primary revenue streams are permit and plan-check fees. With permit-related income uncertain and most DBI spending labor-driven, the budget presented limits options to cut costs without affecting services. Several community groups said shifting or cutting DBI-funded community-based organization (CBO) grants would reduce tenant support for Single Room Occupancy (SRO) residents and others who rely on DBI-connected outreach and counseling.
Koskinen said the departments submission assumes current CBO services will continue and that DBI has asked the mayors office to transfer general-fund dollars to cover the roughly $5,200,000 in annual CBO grants rather than eliminating or reducing the programs. On personnel, DBI proposed reclassifying some permit technician 2 positions to permit technician 3 so those positions can supervise staff; the reclassification package is estimated at about $200,000 and would proceed through civil-service hiring.
Public commenters described long-standing habitability problems in SRO buildings and credited DBI-funded tenant counseling and building-coordinator programs with securing repairs. "You have a $39,000,000 problem," one commenter told the commission, summarizing the gap between current revenues and the departments ongoing staffing costs. Multiple speakers asked the commission not to reduce funding for the SRO Families United Collaborative and related Chinatown-based services, saying the assistance is essential for monolingual and low-income tenants.
Alex Koskinen responded directly to public concerns, saying: "No policy decisions have been made, no request has been made to reduce or eliminate any of these services to any organizations," and reiterating that DBI "is hoping to transfer money from the general fund to DBI to fund this work." Deputy permit director Neville Pereira said the 18% revenue assumption was an early, conservative estimate based on pandemic-era declines (13' 15%) plus additional projected downturn because developers are pausing projects amid current economic uncertainty.
Commissioner exchange: Commissioners pressed staff on the distinction between budgeted hiring authority and funded positions; Koskinen clarified that all budgeted-and-funded positions are currently filled, while additional hiring authority exists but lacks the dollars to fund new hires. Commissioner Alexander Toot proposed a commission position statement affirming the commissions intention that CBO grant funding remain in DBI and suggested the Board of Supervisors could issue fee waivers and reimburse DBI as a policy tool to protect programs. The commission did not adopt those policy motions at this meeting but discussed them as items for follow-up.
Votes at a glance: The commission moved and seconded a motion to schedule the required second public budget hearing for Feb. 14, 2023. The item was put to roll-call vote and carried unanimously (all commissioners voted Yes). A subsequent motion to adjourn also passed; the meeting ended at 12:08 p.m.
Next steps: DBI will return with updated materials at a Feb. 14 special meeting (required under the charter); the departments fee study is expected in April and will feed into mayoral and Board of Supervisors budget decisions. If fee increases are accepted in later phases, DBI officials said the projected draw on reserves would be reduced.
Sources: Presentation and Q&A by Alex Koskinen, deputy director for administration; testimony from community organizations and SRO tenants; deputy permit director Neville Pereira. The budget remains preliminary and subject to revision in the mayors and Board of Supervisors phases of the budget process.
Alex Koskinen, DBI deputy director for administration, told commissioners the department currently plans to use about $33,600,000 of savings in one year and about $21,100,000 of available fund balance in the other, for a proposed total draw of roughly $54,700,000 across the two-year period. He said staff modeled a conservative, "worst-case" 18% year-over-year drop in permit revenue and incorporated a placeholder of about $13,600,000 from a pending fee study for FY2024-25, but that final policy decisions will be made during the mayors phase of the budget.
Why it matters: DBI is an enterprise department whose primary revenue streams are permit and plan-check fees. With permit-related income uncertain and most DBI spending labor-driven, the budget presented limits options to cut costs without affecting services. Several community groups said shifting or cutting DBI-funded community-based organization (CBO) grants would reduce tenant support for Single Room Occupancy (SRO) residents and others who rely on DBI-connected outreach and counseling.
Koskinen said the departments submission assumes current CBO services will continue and that DBI has asked the mayors office to transfer general-fund dollars to cover the roughly $5,200,000 in annual CBO grants rather than eliminating or reducing the programs. On personnel, DBI proposed reclassifying some permit technician 2 positions to permit technician 3 so those positions can supervise staff; the reclassification package is estimated at about $200,000 and would proceed through civil-service hiring.
Public commenters described long-standing habitability problems in SRO buildings and credited DBI-funded tenant counseling and building-coordinator programs with securing repairs. "You have a $39,000,000 problem," one commenter told the commission, summarizing the gap between current revenues and the departments ongoing staffing costs. Multiple speakers asked the commission not to reduce funding for the SRO Families United Collaborative and related Chinatown-based services, saying the assistance is essential for monolingual and low-income tenants.
Alex Koskinen responded directly to public concerns, saying: "No policy decisions have been made, no request has been made to reduce or eliminate any of these services to any organizations," and reiterating that DBI "is hoping to transfer money from the general fund to DBI to fund this work." Deputy permit director Neville Pereira said the 18% revenue assumption was an early, conservative estimate based on pandemic-era declines (13' 15%) plus additional projected downturn because developers are pausing projects amid current economic uncertainty.
Commissioner exchange: Commissioners pressed staff on the distinction between budgeted hiring authority and funded positions; Koskinen clarified that all budgeted-and-funded positions are currently filled, while additional hiring authority exists but lacks the dollars to fund new hires. Commissioner Alexander Toot proposed a commission position statement affirming the commissions intention that CBO grant funding remain in DBI and suggested the Board of Supervisors could issue fee waivers and reimburse DBI as a policy tool to protect programs. The commission did not adopt those policy motions at this meeting but discussed them as items for follow-up.
Votes at a glance: The commission moved and seconded a motion to schedule the required second public budget hearing for Feb. 14, 2023. The item was put to roll-call vote and carried unanimously (all commissioners voted Yes). A subsequent motion to adjourn also passed; the meeting ended at 12:08 p.m.
Next steps: DBI will return with updated materials at a Feb. 14 special meeting (required under the charter); the departments fee study is expected in April and will feed into mayoral and Board of Supervisors budget decisions. If fee increases are accepted in later phases, DBI officials said the projected draw on reserves would be reduced.
Sources: Presentation and Q&A by Alex Koskinen, deputy director for administration; testimony from community organizations and SRO tenants; deputy permit director Neville Pereira. The budget remains preliminary and subject to revision in the mayors and Board of Supervisors phases of the budget process.
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