property owners outside of the city for me to really want to approve of it. the other concern is we are basically assessing this ourselves to provide services, and i know some of these departments are not going to be contributing and do not have a lot of flexibility in their budgets, so unless i see there is a really strong recommendation from the non-city side of the ownership, it is going to be difficult for me to support on january 4. i think you have serious concerns.

>> i think i can approve the city for disobeying. the city participation is not going to be the overwhelming factor in the passage of the civic center area. >> of the community report for tomorrow's meeting? >> as a community report. >> then we have our last item. we have the settlement as well. >> item #4, various updates

regarding the city budget. >> before we go into that, we will take one minute recess. >> ok. back from the break. mr. wagner, the budget director is joining us to share the report. >> thank you 3 much. -- thank you a very much. i will walk through a of a brief high level summary of our deficit projection and the instructions that when got a couple weeks ago. the big picture is that on the revenue side we have some very

modest recovery of revenues. i would tired -- categorize it more as a stabilization compared to the last few years. this is more stabilization then any indication we are seeing a sharp rebound in the fundamentals of the economy. we have anticipated we would start to see some flattening and some slow growth in our revenues. we still believe that would be the case, but it is a modest growth during good at the same time, that is offset by a relatively steep loss in federal revenues we have been projecting the past year. on the expenditure side, i think this is the usual story we have

seen over the past few years. this is driven by personnel- related costs, including benefits and in the exploration of one-time savings we used to balance the budget. we have a net loss of $86.4 million in general fund revenues, and that growth of $294 million in expenditures, and that gets us to our general deficit of $379.8 million in the coming year. a couple of notes were the assumptions underlying that number -- we still have several items that are relatively large cost drivers that are uncertain at this point. one i would like to point out is the cost of employee benefits.

we are still using last spring cost joint report for health costs. those will be updated in january, so we will get updated numbers on those, but the has the potential to create some swings to the good and the bad. we have got news it looks like a portion of our retirement will be going up compared to this deficit, so we will have some updates on that in january. this assumes that we will retain the $21.4 million in projected current year's savings from the report, and it assumes we have set aside $30 million against state budget reduction.

that is the same thing we use when we balanced the current budget. get on the revenue side, -- on the revenue side, we have some growth and tax revenues. the lines at the top of this presentation so the loss -- shobes loss that we have used to balance the current budget, and then the gain of our general fund reserves and are projected current year savings. on the general tax revenues, the three revenues i have listed here are property business and property transfer tax. those are the three largest swings we have projected for the coming year. on property tax, this is another source. we are projecting modest growth during their there are a couple

of -- modest growth. there are a couple of key pieces of information. we are trying to categorize the volume and value of those appeals, so once we have more information, that could cause some significant changes. we are watching that carefully and waiting to have better information. on the business tax side, we are projecting modest growth. i think this is more due to some stabilization rather than anything that shows fundamental job growth in the economy. part of it is due to conservative estimates, but it looks like we will be able to see something news -- some good news on payroll taxes. property transfer tax is primarily driven by the ballot

measure voters approved in the last election to increase the rate on properties above $5 million. there's also some growth in the volume of transactions for the coming year. >> what would you do to prevent the real estate tax? >> i believe about 30 of it is due to the tax increase. >> that is over half a year, to. >> the $30 million value would be over the entirety of 2012. there is going to be about $15 million in the current year, so the total value projected for this year and next year is about 45, and some of that current news will probably be offset by other factors.

there is another ballot measure we assume will pass to clarify the hotel tax regulations that failed at the ballot, so that will partially offset, and we have other changes in property tax, but to contribute directly is about $45 million. >> thank you. >> offsetting that stabilization in revenues in general is the loss of some significant revenues. we have known these are coming. the primary one is the expiration of the medical assistance increase done as part of the federal stimulus. that is in the process of ramping down during the second half of this year and will be

off the books entirely starting next year. that is a loss of about $47 million mostly in the health department and human services agency, and we also balance the current budget of around revenue from the hospitals' fees the state amendment that allows us to recoup some additional costs at the hospital through this. that is also set to expire at the end of this year, so we do not project continuing revenues beyond 2011, and lastly, the loss of one-time revenues. each year we have those go away in the following fiscal year, and this year those included health department revenues,

reimbursement from earthquake bonds, planning costs that recently passed, and other state reimbursement. other changes in revenue -- we will assume withdraw all from the rainy day reserve in the current or next fiscal year of about $15.7 million. and we project some growth in health and human services state and federal revenues. on the expenditure side, we use employee-related costs of as a significant driver of arms -- our expenditures. we have seen continued escalation in those costs. we are assuming in these numbers the continuation of the

significant labor givebacks agreed to last spring, so we continued to benefit from that. those are all funds approaching $250 million for the city, so that is going to be significant aid to the city in a balancing the budget. those concessions are set to expire in the fiscal year 2013. there is expected growth in costs. those are health and retirement costs, and we will have of faith over the coming months for two months -- we will have updates over the coming month or two months. continuing on the expenditure side, we have an increase in our required contribution to

baselines. about $17 million is due to the fact that in the current budget we have pulled the trigger on crop h. -- prop h, so that comes back into the budget. there is a subsequent policy decision that will come into play, and the balance is set aside due to the voter-approved formula us. our capital budget, we continue to assume we will find the general fund cash allocation to capital assumed in the 10-year capital plan that would give us to a fourth of $70 million in capital spending. for the past couple years we have deferred project or found

alternative funding sources to offset this number, but because of the use of the capital plan assumption, that drives our deficit and number up by 44 craig $6 million. -- $44.6 million. we are assuming a cost of living adjustment for contracts and materials and supplies. this is a policy decision that needs to be made about whether to fund this increase, but we have tried to include it to a place to acknowledge the cost pressures affecting our contractors in the same -- to at least a knowledge because of pressures affecting our investors. we have the expiration of some savings on the equipment and technology costs and an increase in debt service partially due to new debt coming on line but partially due to some restructuring to balance the

current budget out of our debt service there are about -- debt service. there is about $9 million due to a one-time savings. we have the fund to support candidates included with those qualified for the elections. that is how we get to our bottom line of $293.4 million, and i am happy to answer any questions about the specific lines or

anything else you have, but just to point to a couple of additional uncertainties. we are still half a year away from submitting the budget. there are things we know are going to change over the coming year. some could change for the good. some could change for the bad. >> i will try not to do my impersonation. >> chief among the uncertainties are what is going to happen with the economy. it looks like things are stabilizing compared to where we were last year, but we do have some uncertainty about our revenues and costs. we also have uncertainty due to the state budget.

the state is facing another large deficit. we expect more information about how the incoming lawyer 10 -- intends to address that. we will get other indications once the proposal is released in january. againswe have a place holder asd in our deficit projection that is part science and mostly art. it is looking fact -- looking back as a reasonable estimate. >> it is at this point of checking in. we are significantly better than what has come in the recent

past. >> that is correct for the current year. i would caution that things could change the budget we adopted this past summer. as you are referencing, the actual impact of the adopted budget were about $7 million, so there was some additional funding we were able to give to cover other revenue losses. however, i think it is fair to say a significant number of solutions and assumptions included in the final adopted state budget are no longer standing, so there may have to be some corrections where the state revisits some decisions made in the past budget and also make an additional future policy decisions to balance next year.

there is certainly the possibility that if they are able to work some magic or are able to fall back on other entities rather than the city of san francisco, we could come out food. i am highly cautious about being optimistic about that happening. i am wary about what happens when the state puts the budget out. as far as the instructions included in the budget instructions, we have asked the departments to make a reduction of 10% of their general funds adjusted as we have in the past

voting approved spending requirements. we adjust those and apply the targets to the remaining discretionary general fund to reduce general fund support by 10%, and we have asked them to propose ideas totaling 2.5%, so one quarter of that amount in the current year. the goal was so we could get some ideas on the table in the current year so the current reductions we can take early action and benefit from 18 months worth of savings instead of waiting until the budget is adopted next year. those proposals we have asked to be turned into my office by december 21. we will take a look of those and

talk through with the department, and we can act on them and immediately or to the extent that policy decisions we can make appropriate to whoever the incoming mayor is so they will have a set of options on the table to work with, and in addition to that, we have asked for another 10% contingency provided by each department. as always, we have asked departments to prioritize or service delivery, finding proposed solutions were possible that minimize disruptions and impacts on services. lastly, the high-level calendar

for what is coming over the past few months, december 21, we have asked the department to submit ideas for current productions. we will see if additional proposals, but my expectation is that nothing will be certain once we do see that proposal, although it should give us some indication, and we will have further updates to current numbers in february, and there will be an adjustment to the deficit production value. lastly, enterprise departments on may 1 and general fund

departments to come before this foreign for deliberations -- this board for deliberations, so i am happy to answer any questions. >> i think we are ok. thank you for your presentation. i do not envy it your job. >> ♪ bring the budget home for christmas ♪ please we would appreciate that ♪ ♪ let the money snow, we need it

so with the present under the tree ♪ christmas tree we will find a budget were city hall lights shine ♪ ♪ please bring the budget home for christmas, and don't you think it is about time ♪ ♪ if only in my dreams ♪ >> on that note, we will close public comments, and we can continue these comments. >> we are going into closed session. this is item five. settlement of lawsuits with insurance, the ordinance for the lawsuits versus the insurance

company. >> to spot this, i am going to close session. do any to do public comments about going to close session? >> that is correct. the maker of motion. >> a motion to go into closed session. >> we are open to public comment going into closed session. seeing none, we will close

chair avalos: ok, we are back from a closed session. we have a motion to go back into closed session? supervisor mirkarimi: i have a motion. chair avalos: any other motions? we are adjourned.

>> about four years ago, [inaudible] look at how beautiful this was. there is our relationship to the planet. these regions are the wealthiest, the most powerful.

that really has impacted the planet. it is almost impossible now to go anywhere and had it really be completely dark. there are very few locations that you can find. that means our relationship to the sky, there is a way where we dominate the sky. we cannot see anything really. we are blinding ourselves in a way. >> you can look at the images, they are beautiful.

when i started four years ago, there was a conversation about environmental issues that was very different. this is not being talked about in the way it is now. . this has just been like an amazing growth. i anticipate the project to be something that opens a dialogue to public interest in these ideas. so the work is really made to be seen in this environment. it's been show in museum, in gallery, but never in a public setting. and it's kind of ideal for both myself and the works to have this real dialogue with the public not only in san francisco but people coming from allve