i am manager of the france music cal -- musical cons tore. came serve torii. one of the things that this benefits district would assist us with, and not just us but other organizations in the area is to ebb hans the experience for the audiences who are -- enhance the experiences for the audiences coming to the significance center, bringing more audiences in, making the area that much more vibrant. when we moved down here, we did so to become a part of the arts center. a lot of people still aren't sure that we are still out on sunset. we have been about are building since then.

that would allow us to put our best face into the civic center area. not only the signage, which will allow people to understand that we are here, and the other organizations as well that we are partnering in the process, but certainly the security and safety of the audience, and also our students who are taking classes into the evening and are encouraging and being a part of the whole life of that area, especially close to the market street area. also, many of our students are living at golden gate hall. families come to the hotel wick ham -- wickham when they come. each student has a built-in support system when they come to the area. the service system will not only benefit us in those ways,

but also the other members of the steering committee and the other supporters. i urge you to throw your support behind the creation of this district. thank you very much. >> thank you. next speaker, please? >> good afternoon chairman avalos and supervisors. thank you for considering this. i am from the san francisco public library. we had a very lively and inclusive debate on this topic at the library. we are all about community, and there has been a lot of discussion. we know there are pros and cons, but on balance the commission has voted to ask you to please support the c.b.d., and i had like to o'connoro that. one of the other speakers talked on the community building aspect. i have been on the steering committee, and i have found that to be a very beneficial aspect of the process. we have gotten to know the other stareds and residents here.

i am confident if the c.b.d. comes into being,ing it benefit the community building aspect. thank you. >> supervisors, my name is jennifer norris. i work at the war memorial, and i am also the executive secretary to the war memorial board. i have served on the steering committee for the c.b.d. the war memorial board voted unanimously for the creation of the c.b.d. they polled the constituent organizations, the people to whom we would pass on the expense in the form of increases in their rents. the ballet, opera and symphony all responded in the affirmative that they would like to see the formation of the district, and they ack nothinged there would be a pass-through of approximately a 3% rental increase to them.

i think the things that attracted them most to the c.b.d. is that they feel the safety ambassadors in zone two, which is where the performing arts center resides, would just provide more safety more welcoming environment. they hope there will be a chance to improve lighting, to do san joaquin activation. when we are trying to do transit first, there is definitely some well-placed reluctant to travel between van nuys and the market street bart at 11:00 at night. if we can do that and reach beyond the war memorial's boundaries, that would be in favor for us. thank you. >> thank you.

>> ♪ civic center town. fix it all right and bring. down significance center town. don't give up the district fight. down town, it's all everything is waiting for you. don't wait around and go the all-day and see my friend is there. his name is tek. you will find the farmer's market and the billy graham civic auditorium. the library is there for you, and you will find a friend, a guiding friend. so maybe i will see you there. we can forget all our trouble, forget our city cares. and go down civic center town. i know all the lights are

bright. down civic center town. waiting for you tonight. down at civic center town, and it's all there waiting in that district for you ♪ >> thank you very much. if there are no other members of the public who would like to comment -- all right. >> i had one point of clarification if i may. is that ok? it was to your question about some of the parcels down by paige and lilly street. some of the parcels are not in that district. we surveyed that area, and we did get some opposition down there, so we didn't include them when we went ahead with the district. is that the area you are referring to? >> right. i assumed that all the parcels that had the red border? >> it is just the parcels in

gray or yellow that are in the district. white is not in the district. we initially surveyed them, and there were a lot not interested in down there, so we didn't include them. >> but haze and ivy. >> where it is gray and yellow, they are include -- included. it is just touching franklin. >> has there been any indication from bank of america where things are going to go? >> we have been talking with them. it is hard to find the right person to talk to. we have started conversations, and so we will see where they are, and hopefully they will weigh in on the ballot phase. >> all right. thank you very much. >> thank you. >> so colleagues, this item is before us.

>> i will make a motion to move it forward with recommendation. >> ok. we can take it without objection. we will accept it and move forward with the recommendation. >> our last item, item number 13. >> item number 13 -- [inaudible] >> and we are joined by members of the controller's office, and we have a presentation. >> thank you. i will just put a power point

in the machine. >> all right. >> thank you, chafe avalos and members of the committee. i am leo, the director of the budget and analysis division in the controller's office. we have a presentation on the current full year first quarter update. what i come to bring you is cautionary good news. >> i would expect nothing less. >> for the current fiscal year,

we are seeing at this point a general fund surplus of $21.5 million, provided that $30 manage in revenues that are remaining uncertain, that were originally identified in the budget as uncertain, are received. the state budget, which was recent lie signed by the governor, reduces general fund revenue by an estimated $7 million. which is fortunately less than what was set aside in the budget. $30 million was set aside. that is a significant reason we see a surplus at this point. the end will end the fiscal year with projected bass of $25 million in the general reserve and $33 million in the rainy day reserve, again subject to certain uncertainties. the main cautions i want to mention here is in addition to that $30 million in federal and other revenues that we will

talk about a little bit further, there is also of course the pace of the economic recovery. this assumes a very slow recovery in sales tax and hotel tax and payroll. we are still waiting for the outcome of many major commercial property tax appeals. while we have done our best to forecast what should be set aside from the property tesm revenues pening the appeals, we still have very few if any major decisions yet to see what is actually going to be given back on the property tax bills. >> on that one real quick, did we set aside any expectation of revenue for the appeal with the arch diocese? >> no. >> so if that came in, that would be unexpected revenue? >> yes. and just to be clear, that is property transfer tax you are referring to in this case. there is the potential for

additional state cuts. the state analyst's office has mentioned that the budget that was just passed has major uncertainties in there, and there may be a need to revisit the state budget, and that could include impacts on local programs. >> to that point to the chair, word is beginning to travel that the budget deal is going to implode, and implode rather soon. i don't know how real that may be, or pronounced, but that is what we are beginning to hear about. >> that is possibly even before a new governor is set. >> it seems unlikely that there could be significant things with impact on local revenues. there would have to be legislative or other actions to see a major impact. >> come on. realistically, we know the state budget is an absolute junk. we are going to get $5.6

billion in federal money when we have never gotten more than $1.5 billion? that is just off the top. the state budget is a joke, and i guess i am a little frustration with the presentation here in that we have a glimmer of good news. though, we don't. this is all predicated on a state budget that is an absolute sham. i think we need to continue to hold on here. yes, we have got decent revenue, but i think that we all know that once sacramento gets their act in order, it is not going to be good news. we have got a governor who is just riding out his team, and whatever person wynns is going to get stuck with a monster of a problem, and it is going to be done to our detriment. >> we do agree with you, and that is why we are pointing out that uncertainties remain. we do agree that the state

budget was predicated on a huge amount of revenues from the federal government, which up to now we have not -- that the state has not identified. and so we are advising boast the mayor and the board of supervisors that we need to be very cautious with a $30 million allowance that has been set aside for the state, because it is possible that additional actions will be taken in this fiscal year that would have an adverse impact on local government. as you know, we do update these figures at the six-month mark. so shortly after the first of the year, we can provide -- or at any time there is any action by the state, we can provide updated information about our budget and how it has been impacted by the state. >> and finally, i do want to

mention on those uncertainties, transit public assistance and indigent case loads, you heard representations that might be need for additional budget. they could not yet forecast a need because it is too early in the year. they could not forecast any potential supplement always in those areas. >> you don't have the outcomes of props j and k, where if both lose, that is a $6 million hit in this year's budget, right? >> that is among the uncertain revenues. we have a slide on that coming up. >> you do have that? >> yes. so the $21.5 million projected surplus is from these categories. this is actually a preawed figure. we have not completely closed the books, but from all

indications we are ending fiscal year 2009-2010 with a surplus of $25.4 million. that is due by property taxes enrolled by the saysor's office. that includes the stat impact reducing our projections by $7 million. a $30 million allowance, million of reductions in the ent year. we will go over these in additional slides. state budget impacts, i will try and go briefly through chart and answer any questions you may have. the largest single item was a change in the medical funding for the human services agency, estimated to be about $5.5 million. in terms of the general fund impact, we have another $1 million related to health and

welfare funds. about $600,000 related to other service agencies, child care and foster funds. at the department of health, a $400,000 loss of the substance abuse treatment program funding. and finally there is an offset that has a client impact where the state has reduced hours across the board for the in-home support services program by 3.6%. since there is a local match to those hours, that actually results in a savings of $500,000, though it is a loss of services to the department's clients. that makes a total of $7 million from those direct impacts on the general fund. there are two impacts on other funds we want to mention. there was a new $3 surcharge on parking citations going toward crort construction funding. if the municipal transportation agency does not act to raise

citations by the same amount, then that would come out of their funds from the citations. there is also a $200,000 reduction for immunization services. the department of public health. the recipient of those funds have already been warned that this might occur. finally, we wanted to call out a couple of major impacts that impact city residents that are not a direct impact on the budget, most particularly the stage three child care funding which does not come through the city but goes directly to child care organizations. that impacts about 1,000 families, 1,200 kids and about $13 million worth of services. in additions there is the in-home support services, ours, which is estimate to have a value of $3.2 million. you can count that twice because that is a value to the

recipients of the service, many who live in the city, the in-home support services provider. moving on to the general revenues. of the $11 million, it is really a bigger picture than that. $18 that we are currently estimating in property tax after setting aside additional funds related to appeals. the payroll tax came in better than expected at the end of fiscal year 2009-2010. this $11 million is basically with flat growth, but it is basically a higher number because last year's number came in hire. we have taken down the projections on investment income. the extra revenues result in

$2.6 million being transferred to the municipal trance agency and the library. that is revenue baseline. so that loss to the general fund is a gain to the other organizations. there is an additional $12.3 million that does not need to be withdrawn from the rainy day reserve. we are assuming that that $12.3 million goes back into the rainy day reserve. so the net there is an $11 million benefit to the general fund under the current projections. >> if these trends continue? >> absolutely. you can add that to each sentence i make. >> a qualification? >> yes. >> let's go back to the slide on page five. >> yes. >> at the board meeting there were parents who came who were very concerned about the state's child care funding, and the loss of that, and the city. we also have our state reserve.

it seems like we have our state reserve that is here to respond to the cuts in services or cuts in funding, and how that impacts services. this one seems like a key service, especially for very low income families who are struggling with education and in the work place with the child care. eliminating child care would eliminate them moving forward. what is the city looking at to address this issue so there is no impact on parents who are trying to make a go with their lives? >> supervisor, kate howard, mayor's office. i think you raised some important points. as you may have heard, the legislature is working on and has said they are committed to restoring this funding. this was lined out by the governor out of his budget, a

line item vetoed. in san francisco, it is a $13 million loss. over 1,200 kids are affected by the cut. the legislature is working on negotiating a deal with the state first five commission, who have state and local first dollars for kids. in san francisco, that is about 40% -- [inaudible] >> by the program. what that deal would do would be to ask kcra 3 weather plus five-day forecast commissions locally and at the state level to front the money for those child care slots and then

provide a provision by which the counties could be reimbursed -- noublenouble >> so basically -- [inaudible] >> so basically the city would be loaning money to pay for these slots. >> i think this is a possibility. that sounds good. getting reimbursed sounds great. what is most important is that the families that are in need of the funding for the service so they can go on with education and work have seen -- have no impact on their ability to go about their lives. >> i think that is certainly what the legislate is saying their priority is also. as you know, there is a lot of uncertainty though around the state budget, and the policy question that you have to deal with and that the mayor has to

deal with is how much can we afford to back fill when the state makes the cut. i think el probably agree with you that these families are some of the most needing of child care. what we are trying to do now is figure out where do we have open slots for kids? could we transition them into city-fund slots, and what might be sources of funding -- [inaudible] >> we will keep you updated on the progress of the conversations. >> that would be good. the impact to their lives would be great. supervisor mirkarimi? supervisor mirkarimi: thank you. i was wondering. are you referring to the full $3.5 million or to the $1.6 million? >> what i am aware of right now

is the conversation is around $1.5 million. that is the part that the first five could be eligible to cover because it is only for kids who are between the ages of 0-5. what we are trying to figure out, it's a million dollar a month cost if we were to pick it up -- [inaudible] >> and it is not clear to me whether the reimbursement is for all slots or just for this birth to five aiming group. supervisor mirkarimi: and does the mayor's office have potentially a short-term prescription if we were to move from this pulpit into a direction of trying to shore up temporarily? >> i think what i would say is we are in process of trying to gather up the information we need to have a short-term fix.

i don't know what that exactly looks like yet, but i would be happy to talk with you more as though conversations develop. the first five, the department of children youth and families, and they are all looking at this issue. >> since november 1st is when stage three recipients would lose that support is literally just several days away, could this be something that we would wait until potentially the next board meeting? or is this something we would actually try to move on in the next few days? i am just trying to understand the process. that's all. >> so you are asking what is the prods by which the decision gets made? about the city providing funning?

>> i am asking for suggestions since the funding terminates on november 1st. >> can i jump in? let me just throw -- because the other side doesn't want to say this, so i will say it. the 6 c1 this. i will say it. the city and county of san francisco cannot continue to be the entity that bill sacramento out of its problems. we have tens of millions of dollars of course of the services that we cut, year after year, because sacramento cannot get their act together. $13 million, if the idea is to take $13 million out of the $30 million set aside for state reserves, what did we talk about five minutes ago? sacramento is going to decimate that budget come february and march, we are going to need the $30 million or whatever else they are going to cut, and where does the $13 million come from?

general fund reserves? one of our key structural problems is that we are constantly trying to fix what the federal government fails to do and what the state fails to do, and as a result, core city services get ignored. we have to focus on the core city services. i absolutely agree these are wonderful services that need to be protected, but you know what? we have tens of millions of wonderful city services that are definitely over responsibility. this is sacramento's responsibility. we cannot keep picking up the ball from them when we are dropping the ball on our city responsibilities. supervisor mirkarimi: very quotable. i agree. i want to follow on our discussion, talking with the mayor's office. it is good to line up what the all looks are. i do not think any of us would disagree that this is sacramento's mess we are having to shoulder. however, in this case, it is the

people of san francisco's mess and harm that is being caused that we have to shoulder, and i think we are trying to figure out the options. it sounds like there are very few if none. >> at the moment, the department are working to transition as many of these needy families and kids on to the available slots in some other way. that would minimize the impact on those families. i certainly could get back to you next week at the beginning of the week about the specific details of what a plan might look like, but i do not have numbers in front of me today or a systemic outlined. but i think it is a conversation that will be happening over the next several days and would be happy to work with you on it. supervisor mirkarimi: ok, thank you. >> i am