have to take a serious look at department contingency proposals as a part of the solution. we also have to take a serious look at what we are going to have to do with the cuts coming out of the state government department. in the past we have chosen in -- chosen to backfill the fund. i do not know that we have the option of doing that this year. we have a $30 million reserve set up against state budget changes. i do not know that we have the luxury of using that reserve as a backstop for the state. we may have to trust in the delegation and the governor to pass a budget that we will be able to live with. of course, to the extent that we balance the budget with one time solutions, we will be in the same place next year if we do not make ongoing reductions that

address next year's deficit as well. we have the joint report coming out in three weeks to update the budget. over the next two months we are in the process of developing a five-year financial plan. which this committee will be involved in, giving us out book on the structural issues facing the city. that will shed light on the benefits and employee cost issues. as well as the long term actions that we have to take to trim down projected deficits over the next five years and beyond. supervisor chu: thank you. the department sent a note to my colleagues, the human service agency department, the 2.5% target of 7.5 is a contingency

that is a large number as it is a larger apartment. we are planning to schedule to have these departments to come in in the month of april to talk to the department about not just general big picture objectives, but to really flush through some of these contingencies and what they might look like. for many of us sitting here, a $11 million for the police or the share of, it looks like a number. but what does that really mean in terms of programs? we think that that will be an important conversation to have. thank you. >> thanks. >> good afternoon, supervisors.

kate howard. mayor's office. i am here to give you a brief update on the mayor's office. supervisor chu: which departments are here? >> fred blackwell has joined us. however, if you have additional questions i am happy to and by other departments. -- invite other departments. we have more information on how the public safety alignment dollars are going to work for programs. it will be important for this committee to hear how that is going for those departments. briefly, i would just like to walk through the state's shortfall. the governor's proposal and the potential impact on san francisco. key approaches to solving the state's budget shortfall for

redevelopment and realignment proposal reductions in state funding. as well as the proposal to eliminate redevelopment. briefly, we can talk about the timeline. i am happy to take any questions you might have. as you probably know, but state has an 18 month budget shortfall of $25.4 billion. the governor's budget proposal is $84.6 billion. it is a very significant question of total general spending. that is comprised of $8.2 billion in the current year. the governor has proposed $12.5 billion in spending reductions, $12 billion in revenue extensions. $2.8 billion in other solutions. those numbers add up to slightly

more than $25.4 billion. he is funding a $1 billion general reserve for space. the impact of these proposals is still being determined as the budget itself is being negotiated. i have done my best to outline those for you here today. in the governor's proposal on revenue, he proposes extending certain tax increases if they include sales tax, which would generate $4.5 billion. . welf, which would increase [unintelligible] and eliminating enterprise zones. that is how he gets to his $12 billion in revenue.

on realignment, but generally this proposal, as you know, assumes that counties and local jurisdictions can do certain functions that the state had been doing more efficiently because they are at the local level. it also assumes that there would be cost savings by transferring functions to the state level. the things that we are concerned about and that you are also concerned about, it seems -- what is the timing of these transfers? what guarantees will there be for realignment funding? what is our capacity for managing these transfers? supervisor chu: on the revenue items, primarily extension of tax increases, are most of these on the june ballot? or are any of these things that they could pass through the

legislative bodies l.p. >> a good question. -- bodies? >> a good question. i believe that they will be going through legislative bodies, without the ballot. in terms of realignment, the governor has proposed a two phase approach. the first is in set -- public safety. the second is more of a social service program. the timing for implementation of all of these realignment proposals is between and 2014. specifically i and phase one, the programs that would be included are the ones listed below. adult probation, adult and child protective services. certain mental health services. juvenile probation and incarceration.

the proposals are currently still being hashed out. i think that gregg was correct in his response to the supervisors question. our local department has, as well as our lobbyists, be working very closely with the part of finance. state department, as well as the governor's office, and the association of counties to make sure that san francisco has been represented at these negotiations. in the governor's original proposal, for example, the state approved to eliminate the california youth authority entirely. as results with further conversations with county, they have pulled back on that proposal and are instead going to allow counties to contract with the state. is jurisdictions, and we are not one of them.

they would still be able to. another example is -- it relates to who would be -- one of the proposals is to return non- serious offenders back to county jail. some of the crimes included in that pool of crimes, there were serious concerns by the sheriff as well as police chiefs around the state. the governor's office has been open to hearing those concerns and modifying those proposals. i think that the real concern for us is -- what funding will really be available to provide these services? for example, the proposal assumes between 25% and 75%

savings. by virtue of returning the services to the county, it assumes that the county will be able to do this more efficiently. for example 8, of the state assumes a parole violator of spending four months in jail, they would assume that spent -- returning to the county would mean one month in jail. they are getting their savings both on changes in how much money they are spending or would need to spend, but also in the assumptions about where people are spending their time and what kinds of services are being provided. supervisor mirkarimi: i think that this topic deserves a more dedicated hearing. i had been waiting to hear more of the progress occurring at the state level and municipal level. i would love to have a hearing dedicated to this.

we should coordinate with a hearing like that might take place. do we have a range or a number on that? >> it is still being estimated, but the adult probation department has indicated somewhere in the range of 1500 additional to be their responsibility as a result of these changes. the sheriff's department is projecting a range at this point, as it depends on the types of crime that would allow someone to return to county jail. it is significant. i appreciate your openness to having an additional hearing.

it does require a more in-depth conversation. >> in the mainstream we did supervisor mirkarimi: in the mainstream i do not think that people realize what is coming down the pike here. >> that may be true. the other thing for you all to be aware of is that the state does have additional information about funding the dollars associated with the different transfers of responsibility. the maximum received for one individual in county jail for one year would be $25,000 per year. they do not assume that individuals would stay for an entire year. they assume it maybe six months. our costs here are higher than $25,000 per year. >> -- supervisor chu: they are

deciding supervisor mirkarimi: -- they are that -- supervisor mirkarimi: they are making this decision based on original residency? >> that is right. supervisor mirkarimi: this could potentially affect census figures? >> potentially. i do not know. supervisor mirkarimi: previously there was a detention for an increase in population, coming with more money attached and that the shift in population numbers in san francisco. >> we would have to look into that a little more. supervisor chu: could you walked down the bullet points on chopper services? what you think the impact might be for those? adult probation services, as a

result we might be seeing an additional 1500 additional probationers. >> the details of those proposals are still being worked out. i do not have a good answer for you there. it would just become the responsibility of the county. there would not be additional state funding for that function. supervisor chu: court security would revert to county responsibility, generally? >> certain mental health services, details are still being fleshed out at this point. but there is more to come there. juvenile probation would return up -- in all of the responsibility. the original proposal would

eliminate responsibility and allow youths to be sent to you authority but only through contract. the responsibility would be on the county for how to manage those young people. speaking about significant changes to where people would serve their sentences. and what kinds of offenses. supervisor chu: you said that we might see an additional 600? >> 600 to 1000. supervisor chu: for the ones where we do know whether it is additional probationers, is there a sense of what the associated money might be to

come to that local jurisdiction? >> i do not have a $1 figure on that. the number that are most clear at the moment our numbers associated with an annual re for someone being incarcerated, $25,000. super buys locally i believe it is $3,500. things like that. but i do not have numbers. supervisor chu: ok, thank you. supervisor mirkarimi: if i may, it is also attached to the idea of effective reentry. hoping that after they are incarcerated that our programs are also adjusted to deal with

this increase in population. not just managing be incarcerated, but the afterlife of incarceration. we are hoping they do not repeat the offense. that is what is not entirely clear. what are the resources that escort that increase in numbers from the state? not just on managing? >> the other piece on this is that the state is assuming that many of the young individuals returning to the county or are sentenced to county jail will stay for a short period of time and then go into a community supervision program, a electronic monitoring. there is funding for that but it is significantly less than $25,000 per year. supervisor mirkarimi: we actually get a better rate of return on the county-driven.

recidivism is lower. it will ruin our local statistics if we do not have commensurate resources that deal that increase in population. >> the points that you are raising our why it is so important that there be an adult probation chief, sheriff, police department, and all of our public safety departments. they are working together to figure out how it will play out. what does it mean for individuals who are incarcerated and transferring alabama -- out? i believe the greg mentioned that human services had been at the table to describe how they could play a role. >> thank you. -- supervisor mirkarimi: thank you. >> there is more to come there. i wanted to talk to you briefly

about some of the reductions proposed by and the governor's budget. these are highlights. i thought they were the ones you would be most concerned about. significant reductions proposed. the main way that that plays out is an increased skill set for individuals who are receiving medi-cal services and a reduction in payments to providers. we feel that here in the city's budget, as we are a metical provider. it would be about a $5 million cost. supervisor chu: is that related specifically to the reduction and 10%? >> yes. cal works, budget proposes to ce new time limits for families. this would limit yet effective

july 1 of this year. and also reduce the grant from $694.20 $604 a month. -- $692 to $604 a month. we expect there will be individuals that when they become eligible, we need support from the assistance program. there might be a cost associated with that. there are significant reductions to the support services program that provides a variety of supportive services to elderly and disabled individuals in the county. that is worth $468 million. because of the way the program is funded, the governor proposes

to reduce the available hours by 8.4%. as a result, the county will not pay for the 8.4%. it reduces our need to spend money on ihss. it feels like a savings to the general fund. two other things i'd like to highlight. the governor has proposed a sweeping reserve funds to provide services for children and their families - t- t0 to 5. and he plans to reduce child care subsidies and child care

eligibility. we currently believe that that is approximately $4 million in lost funds to san francisco. there might be more. not all of the funds flow to the city. the one that has been getting the most play in conversation is redevelopment. as i mentioned, the director of the redevelopment agency is here to talk about where we are. i wanted to briefly describe the governor's proposal. he proposes to entirely of lemonade redevelopment agencies statewide. while allowing agencies to complete their existing obligations. the governor assumes that by eliminating the agencies, he will generate $1.7 billion in general fund relief for his budget.

and he proposes funding in the budget year. the proposal would be that all of those funds that previously were used for redevelopment purposes would flow through the existing property tax formulas and would flow to the counties as well as the school district. san francisco worked with mayors throughout the state to come up with an alternative proposal. basically, the proposal would have generated $1.7 billion in funding by increasing the amount of property tax that will pass through the state. the governor's office has not been particularly interested in that proposal.

and so, where we are now is that the governor has made his proposal and the senate budget committee has passed their version of the budget including the $1.7 billion in savings from the redevelopment agency. supervisor chu: both the state and assembly budget committees have approved that? >> they have approved the $1.7 billion. it has approved the gov.'s plan. it did not indicate whether that was from the elimination of redevelopment agency's orders from an alternative proposal -- or from an alternative proposal.

i would like to ask mr. blackwell to come out and provide you a brief update on where things stand today. >> good afternoon, supervisors. i am going to go into a bit more detail on things that miss howard raised and give you an update. hold onto your hats. in summary, the proposal basically says 3 1/4 innings. one supposes the -- three or four things. at the same time, it acknowledges existing commitments that are held by the redevelopment agency'ies and cls for -- calls for creation once

they are abolished to carry out those applications. the last piece of the proposal that has not received a lot of attention is an effort to reduce from 2/3 to 55% the amount of voter approval needed to approve things like economic development. that is briefly what the governor's proposal is. both the assembly and budget committees met last week. the senate committee decided to go along with the governor's proposal. they decided to score $1.7

billion and left room for negotiation. what is happening now, they have formed a conference committee to reconcile the differences between the decisions that were made in the senate and the assembly. they were made without the bill language to a company that governor's proposal. -- a compccompany the governor's proposal. they are expecting to wrap up those deliberations if not this week that early next week -- that early next week. -- then early next week. the governor needs to wrap up this aspect of the state budget in order to get to the voters.

it requires voter approval. as ms. howard said, the city and county of san francisco is part of a coalition of the top 10 largest cities in this state. the mayors as well as the staff of those agencies have been working on alternative proposals. i submitted one last week. there are two pieces of work that went with that. i will go briefly through what is in there. the other thing that the group did is apply scrutiny to what has been out there.

just briefly, the $1.7 billion is in dispute. it reflects the 08-09 state controller's report. this attracted existing debt obligations. this attracted the obligations and as they are paying off that, it would be about $1.7 billion that would go into the general fund and the subsequent years back to local jurisdictions.