martin. i am here because i want to support them. about a couple of years ago, i had a very said time in my life. it made me realize how privileged i was before. it is good now, but i did not realize how much i had. since this thing happened, it happened that i needed help from people. i am glad i lived in this city which has a very strong community and has helped me a lot. if recommended this. as a consequence of what happened, i came with financial problems, physical issues, and psychological problems. the really good friend of mine

recommended me to lyon-martin. they have helped me a lot with everything. i always respected me and motivated me to do things, and they still do. i am a patient. this week, i am going to see them. it was very professional, very caring. i really needed them, and i still need them. not only me. i know other people who rely on them. this is my first time i have spoken in public. but i needed to do it because they have been there for me and i want to be there for them. please help them. thank you. supervisor mirkarimi: thank you. next speaker, please. this is the last public comment, if nobody else wants to step up. >> thank you so much for having us. mining is vanessa pratt -- my name is been suppressed. i have worked at the clinic for

a year-and-a-half. i have worked on the administrative side of the clinic, looking at money and budgets and how these services work together. i would like to speak briefly to the fact that -- the economic side of this, given that you are the budget committee. we all know that patients, when the clinic closes, do not stop needing health care. they definitely continue to need it. because they may not have a primary care provider lined up broadway, -- wind up right away, and may never want to go to another, they will delay until the end up in the er. er care costs exorbitantly more than primary-care. if you are looking at an economic argument for keeping the clinic open, it really is

cheaper. it really can be cheaper to keep us open then to close us down, to have to transfer care for our patients. of course, there is an ethical and moral argument as well. people die when cannot close. people kill themselves when the clinic closes. that should be said and has been said. i want to drive home the fact that these patients will end up costing the city money. if we can't predict it now because we do not know how they will use the system -- but i would very assuredly are you there will cost far more -- argue they will cost far more than they do today. they do for your time and support. supervisor mirkarimi: thank you. this will now close public comment. we synchronized that well.

i want to thank everybody for your participation in the hearing today. first, i would like to extend and _ our compliments -- and underscore our compliments to the community that has come out in masse for your creative eloquence and loyalty in rallying to the cause of saving lyon-martin health clinic. i want to thank the department of public health. i want to thank the consortium for their professionalism and for their ability to dispatch, as best as they possibly could, with a very constructive -- constrictive time perimeter, in

working with the directors of the lyon-martin health clinic. we want to thank lyon-martin for being cooperative in doing everything you can to avert a crisis. in my opinion, and i do not believe i am alone, i think many here in the elected family would see this as a profound loss, devastating, if lyon-martin health clinic or to close. the expressed intent of today's hearing was just that, a hearing, because we have not been able to conduct a forum because we did not have empirical data until this point. we did not have the data we have been waiting for. that way, there is at least some financial assessment and policy

assessment as to how we got into the position we are in and what we can do to make sure this position and reality is not repeated. now that we have gone through that, this now informs and enables electeds like myself to come to this conclusion. i will go out on a limb here, but i do not think it is unpredictable that it would be a complete and unconscionable posture of our part if we did not, i think, step forward, should lyon-martin be in a position of still needing some financial assistance by the city and county of san francisco, to not do our part to be able to help provide that assistance, should the need arise. department of public health and the city family is right to exhibit some of the tough love

and some of the conditions would be obligated so that prices would be averted, and there would be conditions to make sure that any of the evan district of or governments -- any of the governance this function would repeat itself. that does not disprove that lyon-martin serves a population that is of special importance to any of us who recognize the role it plays in serving 2500 patience -- patients, that is culturally competent, that is class reverse -- diverse, and that makes us all proud, city and county wide, as it is well recognized both in california and nationally, and by signs of

support, internationally. everybody has come here today with i think a really outspoken desire to make sure we do everything we possibly can to save lyon-martin. that demonstrates the political will and intent that we leave this hearing in formed and empowered with a strategy. but that strategy also has to be shouldered by the clinic and by the community. as we heard, there is an hourglass. there is a pendulum up until march 31. that is not something to take lightly, despite all the good efforts, and i mean very impressive efforts. we have been to a number of the fund-raisers. i have to tell you it makes me proud to be a san franciscan. when i see lines around the block at any of the events and

the town halls, it reminds me that we are san francisco, and we are no stranger to crisis. and yet we have been able to navigate these moments before. when i see the level of turn out that i have seen in community and here in city hall, it warms my heart. we will be prepared to see what occurs over the next 29 days. i would be more than happy to help, and i know my colleagues will want to also stand tall with this idea that if a supplemental appropriation is imperative, that is an imperative we are prepared to advance. thank you very much for your participation. supervisor kim? supervisor kim: thank you. i want to thank you so much for calling this hearing for lyon- martin. it has been amazing for the last

two months to hear how lyon- martin has touched so many people in this community. public comment was a reiteration of the stories i have already heard. it was amazing. everybody has talked about the overwhelmingly positive experiences they have had their. i have been very lucky not to have health care needs. i understand how challenging it is to find health care that i feel comfortable and safe going to, that i enjoy going to. a place i know they are giving me the care i need. as a woman and an asian american, i find it challenging already. it is amazing to hear how much of a home this is for many folks in the san francisco community. having worked extensively as an organizer in chinatown, it reminds me of how chinese hospital is for many of our immigrant seniors, or working

class families that come here, and also our newcomers, and how important that service is for that community. when chinese hospital has had needs, the community has rallied very strongly to make sure we keep the hospital here. i think that as a city we need to make sure we keep lyon-martin clinic open, and i am committed to that. the one thing i will also say is that this story reminds me of the importance that as we cut and cut and try to protect services, that we also look at the importance of capacity building for nonprofits. we expect them to serve and serve, and we cut their infrastructure needs and leadership development, h.r. finance, all the things that help keep the services going. that is something we need to keep in mind as we continue to do gramps, particularly our city grants. i know we as a city do not fund

capacity building, and that is important for our nonprofits that provide unique services. lastly, i want to concur with supervisor mirkarimi m. think the outpouring of support from the community for moving much quicker than the city has been raising close to $300,000. i think that is amazing and speaks volumes about why we need to do our part as well. thank you everyone for coming today. [applause] supervisor mirkarimi: we will go ahead and motion to continue this to the call of the chair, this hearing. thank you, everybody who participated here today. stay tuned as to what transpires of we the next few weeks. we will stay in touch. we are on top of this. thank you again to the consortium. thank you to lyon-martin health

clinic. thank you to the department of public health. i think we have a bit of business. i am going to entertain a motion to rescind the boat on item 3 -- the vote on item three. motion to rescind the vote on item three. instead of it to date certain, i would like to continue this to the call of the chair. very good. we will continue that to the call of the chair. >> that completes the agenda for today. supervisor mirkarimi: very good. budget and finance committee is now adjourned.

supervisor kim: captioned by the national captioning institute --www.ncicap.org-- supervisor chu: welcome to the regular meeting of the budget finance committee. today is the first day that we are expanding to our by person committee. today we have two items before us. before we get into those, our clerk is mr. victory young. are there any announcements? >> please turn off all cell phones and pagers. if you wish to submit public comment, please fill out a speaker card in provided to myself. documents for the committee should be duplicated for the

file. supervisor chu: thank you very much, mr. young. just a bit of information, the office has put out a schedule of hearing dates for the upcoming budget season. primarily we will be seeing a number of enterprise departments in the month of may as well as a number of general fund departments in the month of june. i believe that that schedule is posted on the boat -- on the board web site. the two months before june we will be having a number of hearings relevant to understanding the budget that we are seeing before us for 2011- 2012. if we can, please go straight to that. please call items one and two. >> item #one. hearing to receive information regarding budget instructions issued to departments and

plans to close the budget deficit for fy2011-2012. item #two. ongoing hearing to receive updates on the state's budget for fy2011-2012 and its impacts on the city and county of san francisco. supervisor chu: mr. wagner is here from the budget office and the comptroller's office might add a few words. >> thank you very much, madame chair. members of the committee. i will walk you through the high level picture of where things are right now. kate howard from my office is going to talk to the state budget picture. just to kind of frame where we are right now in the process for

the last several years it has been an ongoing process, balancing the budget in the budget year. where we are right now is the apartments have submitted their budgets and have been going through the submission process for the last couple of months. they have submitted their budgets to the mayor's office. i guess that this marks the official starting point of the process of digging into those department proposals and policy implications and what they mean for the budget. right now we are still looking at things at a very high end broad level. the chair had asked if we could summarize what we are receiving

in submissions, although i think it is early for me to be able to paint an accurate picture of that for you. we will dig through that as we do our submissions. we will continue to share information on where we stand. i know that the supervisor has invited the departments to talk more in depth of their proposals. i will walk through what the big picture looks like today and what we will be trying to set in the background for what we will be talking about with you. repeatedly for the next three months. as you know, no surprise, we have to balance the budget. our budget instructions, which we submitted in the winter of 2010 included the mayor's office

deficit projection. as you know, it showed a reject -- reduction year-over-year by and revenues and a growth of $293 million in expenditures. our projected budget deficit has been $380 million for the coming year. since then, a number of things have changed. there are all of these moving pieces. expenditures to grow. revenue that changes. we have had revisions to our estimates. let me go through a couple of those quickly to give you a sense of what is moving. we will have a formal update to the deficit projection and a joint report coming out late in march. in a few weeks we will have all of the pieces put together for a better sense of what the full picture is.

also, just very high level and not new information to any of you, but put in perspective, as you know we have a $6.5 billion city budget. about 45% is in the general fund. within $2.9 billion we have other significant restrictions on our options to take to balance the budget within that period a large and growing contribution to our pension system. an obligation we are required to make. other approved requirements locked in a portion of those expenditures. the big pieces that we are working with, by definition, the

chunks of spending in the general fund, they fall into essentially three major categories. the parcel budget, whether it is discretionary general fund, it is public safety. and then held and to treat human services. primarily the health department. another roughly 45%. not surprisingly, that is where much of the discussion has been in previous years and will be in this year's budget as well. since the deficit projection last winter, a couple of things have changed. you all know that we asked departments to meet their budget reduction target partially in the current year to try to get a jump on next year's problem. in december we received those

ideas and about $19.8 million in savings. that was sort of a down payment on the budget instruction targets. as you have heard, since then this committee had a controllers six month report come out, controlling revenue projections. looks like the new news will be $14 billion in good news in the current year. and then a significant portion of that will annualize into next year. we will look at some portion of that again. another piece of caution out there, deficit projection had assumed that we would be able to withdraw from the rainy day reserve. it is unclear if that will be the case. we are still working on the

exact projections. we are near the border in terms of charter formulas about whether we can or cannot withdraw. we had assumed a $17 million withdraw from the reserves. if we pass that point, it would be a setback in terms of original projections. we have also had losses and projections for the health department revenues in particular. a number of these will be made up by other revenue sources within the health department. it is a step back. projections that you saw in the six month report. some of our projections came in during the current year, so we had to write off those revenues. and we had some movement in our

largest expenditures. we got some good news on the health rates. there are still significant cost growths for health insurance. because of the package adopted by the health services board, there will not be as quick of a rate of growth as we have projected. that will feel like some savings. that has been offset by an evert -- even greater increase in employer pension contributions. there are about $23 million in additional growth. we had already projected that our employer contribution would go from 13.5% of salaries to 16.5% of salaries. the actual figure is 18.1% of salaries.

growing faster than we projected. we know that these expenditures are going to continue to grow over the coming years and be one of the fundamental questions that we will need to answer in the current year's budget and for the long-term. i guess that the point of this is that we have a lot of things moving around. little pieces of news coming and going. the big picture is that we are back where we started after all of these changes. the fundamental picture has not changed. not substantially. we will have a more formal update. we might have some new news in a few weeks, but essentially things are where we thought they would be. nothing has fundamentally changed in terms of the big picture. >> we had a deficit of $379 million.

given the changes throughout the six month report, we are netting a bit worse currently? >> correct. supervisor chu: we will see an update again in the joint report? >> i do not want to overly- suggest that this $383 million number is science. it is a little bit in the back of beyond the globe. but that is essentially the big picture for all of the changes going on. looks like we are right about where we were two months ago. in terms of some of the big cheeses available for us to look at in terms of balancing the step to set, what the committee saw last year was a couple of regular items that we usually consider or use to balance the

budget deficit. we projected inflationary growth in the current track of $19.2 million. that is cost of living adjustments to our providers. so, we do project that we will experience that growth. we do have the option and will likely exercise the option not to fund that growth. meaning that providers will have to adapt to providing services with fewer resources as many of them are experiencing the same crop -- cost growth pressure as the city. under the option to the school district we can defer one quarter of our contribution in a given year. we have exercised that option in the last couple of years and it

is likely prudent to do so again. there is the long-term issue of the charter language that requires us to pay back at some point unless prope h is renewed. something to consider for the future. another big piece of the deficit projection is the capital budget plan that assumes we will be spending $73 million in general fund cash over the coming year. the deficit projection historical the includes that full value for the last two years we have used a combination of reductions to spending and applying other funding sources to reduce general fund costs. it is likely that we will have to do that again. we have been talking about that at