Getting money for S.F.’s budget is one problem. Spending it is another.

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As San Francisco faces the prospect of a vengeful Trump administration that could claw hundreds of millions of dollars from its budget, a looming $876 million deficit, and the possibility of layoffs at City Hall, the city has another problem: Spending all the money it has in the first place. 

Out of $1.2 billion the city obtained through federal, state and private grants between 2021 and 2023, $47.4 million went unspent before the required deadline, according to a January report from the San Francisco Budget and Legislative Analyst (BLA) . 

The city managed to negotiate an extension for about $32.7 million of that; the money was or will be spent later than planned, but it should still be used for its intended purpose. Sometimes, projects are delayed when money isn’t disbursed on time. Other times the city’s lack of timely spending itself delays projects.

But according to the BLA report, at least $14.7 million of that money is just gone; no longer available to the city because it couldn’t be spent in time. “It is frustrating to see so much funding awarded and not spent,” said Sam Moss, the executive director of the Mission Housing Development Corporation, a nonprofit affordable-housing developer that works with the city and relies on external grants. 

The city uses grant money from federal, state and private sources to fund a variety of projects, from HIV services to affordable housing. The vast majority of grant money the city receives is fully spent, but it is not uncommon for some projects to lag behind or face bureaucratic hurdles that result in money going down the drain. 

The report cites notable examples: 

• The Department of Environment received a $4.6 million state grant for the purchase of electric trucks destined to transport produce from Sacramento and Fresno. The manufacturer could not construct the custom-built trucks required, so the funds were never disbursed.
• The District Attorney’s Office lost $3 million in funding from the Crankstart Foundation after effectively halting the restorative justice program the funding was earmarked for. The DA’s office also lost $625,000 from the MacArthur Foundation, which pointed to rising jail numbers under Brooke Jenkins; the report cited the loss, but kept it out of the total because the funding was approved in 2024.
• Out of $9.8 million in state grants to compensate residents’ for unpaid utility bills during the pandemic, the San Francisco Public Utilities Commission did not spend $1.6 million because recipients who would have been covered were no longer eligible due to changes in their financial status. 

The report was prompted by an earlier embarrassment: a $15 million federal grant, announced in 2018, that was destined to fund a new streetcar loop on Market Street that would have allowed for increased service on the historic F line. Construction was supposed to start in 2019, then 2020. SFMTA ultimately returned the money to the feds in 2022 due to project delays. 

There is no single reason why grant money goes unspent. Delays can be the cause, but so can finding and hiring the right staff, or meeting complicated administrative requirements around how the money is spent. “Getting these resources is wonderful, but having to actually meet the timelines and make the resources available — that is a management issue,” said Fred Brousseau, the director of policy analysis at the Budget and Legislative Analyst, who co-authored the report.  

In the case of the unspent $47 million, the problem is largely one of navigating bureaucracy, said Supervisor Connie Chan, who chairs the Board of Supervisors Budget Committee. 

For instance, a grant might require creating a new position. In one case, the Department of Public Health did not spend a grant from the U.S. Centers for Disease Control and Prevention because it never hired anyone to administer it. 

Often, the funds are for “high needs” departments providing aid to put-upon residents, said Supervisor Myrna Melgar, who requested the analysis about a year ago. “That’s another demoralizing thing.” Since she first worked as a civil servant under former Mayor Gavin Newsom, she has seen grant money to the city being returned time and again. 

Of the $1.2 billion in grants reviewed, about a quarter of that money was granted to the Mayor’s Office of Housing and Community Development, which funds 100 percent affordable housing projects. Other large chunks went toward the Department of Homelessness and Supportive Housing ($152 million) and the Department of Public Health ($102 million), both in charge of homeless shelters and drug treatment beds, among other services.

As it stands, the city does not have procedures in place to ensure that grant-funded projects are completed on time and receive the funds expended in a timely manner, according to the report. “Right now, it’s left up to each department. Sometimes it happens, sometimes it doesn’t,” said Melgar.  

The Board of Supervisors provides oversight over receiving and disbursing most grants to various departments through “accept and expend” actions, but it does not oversee what happens to that money afterward. 

Melgar is hoping that will change.“Somebody needs to be paying attention to the promises that we make and the capacities that we have,” Melgar said. As a first step, she plans to coordinate a hearing at the Board of Supervisors to review the report. Ultimately, any remedies will likely have to be worked on in tandem with the mayor’s office. 

“Our job is to highlight that there’s a problem,” Melgar said.