supervisor mirkarimi: that is helpful to know. footnote it, that's all. supervisor chu: to the extent it he would be happy to have a conversation with the school district, i would be happy to work with your office. thank you. >> so the next slide, on the stabilization reserves, a new reserve was created last april to augment the rainy day reserves. the purpose was to allow for a more extended cushion for the city given our experience at the rainy day reserve. and i have the chance to deposit money sooner.

this is supplemental to the rainy day reserves. under the terms of this reserve, it can come from three volatile revenue sources, and these include property transfer taxes above the average of the past five years. and not already appropriated as a source for the subsequent year's budget. that would feed this reserve. and finally, non-property asset sales of those occur. withdrawals from the reserve are triggered also in the case of a revenue downturn. the terms are supplemental to the rainy day reserve and it is intended to provide for at least three years of support for the city of the budget -- city's budget. plus the stabilization reserve

is no more than 10% of reserves. if or when we are able to reach that level. we do it just for changes in the rates. the results of the rate change are not considered part of the average. there are also a couple of smaller reserves that are written into the charter. there is the budget incentive reserve created some time ago that allows for 25% to be

carried forward and used. this is also allowed to be suspended when the controller determines the city's financial condition. it was suspended given the major budget shortfalls, so this has not been a major factor. there is also the recreation and park savings that was written into the charter that says the recreation and parks department gets to keep any savings. it will be dedicated to capital. there was $1.2 million carried forward that was appropriated. from the prior year. as a reminder, we are going to

be reviewing them. by the end of march, the five- year financial plan in early may. i would be happy to answer any further questions. supervisor chu: thank you very much. any other questions from the committee? just confirmation with regard to the budget stabilization reserve, we don't have any balance in there? >> that is right. supervisor chu: you probably aren't there with anticipating the five-year horizon. >> it is really unforeseen revenues. you probably but did them in terms of the -- budget them in

terms of the year's end. we are not doing that at this point. supervisor chu: ok. thank you. why don't we open this item up for public comment if there are no other comments from the committee? any members of the public that wish to comment on item number one or two? >> yes, walter. ♪ i feel the earth move under my feet i feel the budget raining down ooh, when i see your place it's always like the month of may ♪ ♪ oh, city hall i want mental health better that way

i feel the earth move under my feet tumbling down ♪ supervisor chu: thank you. are there other members of the public that wish to comment on item number one or item number two? public comment is closed. can we have a motion to continue item #one to the call of the chair and file number two? without objection? item number three, please. >> appropriating general fund reserve for the ethics commission campaign finance fund for fiscal year 2010-2011. supervisor chu: think you. -- thank you.

perhpaaps we can start off from the controlelr's offic -- controller's office to explain whtaat this is. then we will go to the analyst's report. >> supervisors, i think this is the first supplemental appropriation. this is the process where the board appropriates money outside of the budget process. this was an item introduced by supervisor avalos. the city borrowed money from the public financing campaign fund that is required both as a function of the city charter and the board adopted ordinance to balance the annual budget.

there were conversations regarding making this money available for the fun began as needed to meet requirements of the upcoming mayoral election campaign. i know you have a very detailed report that talks through the available balance in the expected drop. supervisor chu: thank you. budget analyst report? then ethics commission. >> i'm from the budget and legislative analyst's office. i want to refer you to page three-five of the report. under the government code, the board appropriates money based on the fund each year.

the mayor's budget actually took about a total of $7.3 million from the balance thieu'to balane budget. there are annual appropriations each year. in addition, you will see the board of supervisors has also approved a supplemental appropriations to this fund that will total about $1.8 million. this supplemental appropriation ordinance will appropriate another $1.3 million of the general fund reserves. it would restore the balance if

it is appropriated. i believe the ethics commission can speak to this. there is very rough estimates. without this appropriation, up to about $4.7 million, there would be a fund balance of about $300,000. if this committee appropriates -- [inaudible] supervisor chu: thank you very much. ethics commission. >> good afternoon, supervisors. i don't have a prepared statement.

i am here to answer your questions about this. i do want to point out that although may oral public financing was available in the last mayoral race, it was not used. our assumptions and our estimates are based on a lot of conjecture and a little empirical evidence. we have done the best we can to come up with numbers that are reasonably comfortable. supervisor chu: i believe the sponsor of the legislation will be on his way, so i wanted to let the committee members know. can you walk us through this? it is a pretty important thing when the committee is considering supplementals because it is coming out of the general reserve. can you walk us through the anticipated need for the mayor's race?

>> i am working on the assumption that the candidates are going to qualify. based on the prior history of individual candidates, there could be as many as 10 or as few as six that will qualify and have the potential to raise the full amount to hit the caps. the working no. i am using, they can raise the full amount that they are allowed to, hundred and $75,000 each. -- $575,000 each. that would be available with the current balance in the anticipated deposit into the fund at the beginning of the fiscal year. supervisor wiener: i am just

curious in terms of projecting for a mayor's race, to what degree will they happen to the fund? -- tap into the fund? we have never really had a -- we know we have a track record to make intelligent projections. it's so much bigger. in terms of the ability of mayoral candidates to raise up to $500 checks in san francisco, i'm curious what your thinking on that -- what you are thinking on that? >> in the last race, hot the amount of money raised was in excess of $6 million. there has to be a saturation

point somewhere. i don't have any way to tell. there is only so much money available to all candidates. it has to be somewhere between $5,000,000.9999999 dollars. -- between $5 million and $10 million. i am comfortable assuming that the lease eight candidates can raise $575,000 each. some of them will have the fund- raising prowess beyond that expenditures will probably allow those candidates to be able to continue to get matching funds. the independent expenditures, does that answer your question?

supervisor chu: just a question. i understand the calculation for the mayor's race, it looks like you are assuming six candidates will receive a current $900,000 maximum for to get to the $4.5 million? the ceiling could be raised if people fund raise to match. they indicate that what you have reported is that you will need $4,000,000.700000 -- $4.7 million. we have five candidates raising $575,000.

>> the $4.7 million estimate was based on the fact that there are currently six candidates that have raised in excess of $50,000. six candidates currently have raised in excess of $50,000. we know this because there are filing requirements in the public finance race. any time a candidate raises in excess of $50,000, they have to report to us that they have surpassed that. they don't have to report back to us again until they have raised in excess of $1 million. and there is a big gap between the first report in the second. -- and the second. it isn't due until the end of july. to have an accurate count, you will have to listen to this of reporting of the candidates --

th the self-reporting of the candidates. six candidates had raised a combined total of approximately $800,000. we assume that six candidates before the end of this fiscal year would all qualify giving them -- it would mean a total disbursement of $300,000. we assume that at least two candidates will raise an additional $50,000 that would add another $400,000. three of those candidates would raise an additional $200,000. that would be $2.4 million. one of those candidates will raise an additional $400,000,

$1.6 million for a total of -- supervisor chu: the $5.4 million is based on who has qualified so far? >> yes. there are at least two more candidates that will be able to raise those kinds of funds. supervisor chu: even under your conservative estimate of of the candidates are able to raise however much it is, even if all of those candidates were to raise aggressively in the next three months and you were able to get to the $4.7 million, how much do we have in the current account balance? >> in just over $5 million. >> we have enough to be able to cover that.

>> we made some rough estimates to make those assumptions. we decided that based on current numbers, a candidate that already raised 200 could raise more. supervisor chu: with regards to the current balance, there is the anticipated deposit? >> the statute requires two. -- $2.75 be deposited each year. that brings us with the 5 million that we already have. it will be that way if a candidate to back out.

as you know, there is another $5.5 million. it was previously appropriated. i anticipate that we are going to need some of that money should independent expenditures raise the additional caps. because this is an open mayoral race, i believe the expenditures will be significant. supervisor chu: the current capas $1,000,475 -- cap is $1 .475 million to qualify. that would get them the first $50,000. they would get $4 from the public finance fund. the next $450,000 gets to a 1:1

ratio. to the extent it is for each additional candidate. they can apply on a 1:1 ratio. what is your process for determining what is available to candidates? could we get to the point where it has been exceeded? >> that determines, if you divide that number by the number of candidates, there is a theoretical ceiling when you exhaust the funds that would be the maximum for each candidate. supervisor chu: based on your conservative estimate, we have enough to cover it.

in addition, we expect a deposit of another $2 million at the very least because of the law in the ocming -- coming budget year. and to the extent that this boar d decides to add additional funds, it would be available next year? >> right. supervisor mirkarimi: i think you covered it pretty well. i was more interested may be in a little bit more information about disbursements, the distribution of funds, what that is beginning to look like between navajo into the next few months. -- now and the next few months. it sounds like you were keeping pace with your expectations. >> we have had to candidates apply and both qualified last

week. each received $50,000. we have appropriated with the male raise $100,000. it was appropriated earlier in the fiscal year, that is water under the bridge. for the male race, the candidates will get that grant. at this point, they have met the minimum qualification. he will continue to be matched. supervisor mirkarimi: two have qualified out of eight? >> there is at least two announced candidates that easily have the capability to raise that kind of money. supervisor mirkarimi: has

anybody said that they are not going to pursue public financing? >> no, and to my knowledge, all the candidates have sought information and attended trainings. one candidate is not qualified because of highprior fines owed. supervisor chu:wh why don't we o to public comment? are there any members of the public that wish to speak? >> you know, your constituents will not dislike you if you actually have a surplus in your general fund at the beginning of the next fiscal year. the ethics commission now has $5

million, which is more than adequate to cover the may are zero candidates -- mayoral candidates in november. there is no need to take $1.3 million out of the general fund at this time. if there needs to be any adjustments, perhaps you can make them at the beginning of the next fiscal year. supervisor chu: next speaker, please. >> ♪ i feel the city ices slowly metling -- melting it seems like years since you have been here i'm glad you got money in the fund ♪ ♪ i say it's all right little city budget

i feel the city ice is slowly metling elting it feels like years since you've been here ♪ ♪ i'm glad you've got money in the fund i say it's all right sun, sun, sun here comes the sun in the election fund sun, sun, sun here comes the election sun with lots of fun it's a new day ♪ ♪ i'm glad the election money is not all gone it's a new day new dawn bring the election money bring it along ♪

supervisor chu: do we have any other speakers that wish to speak on this item? public comment is closed. just one final question from thme. given you have the $5 million, i know there is a certification that you do about whether or not there are funds to proceed with the financing. what is going to be your determination if you have not made it? >> at this point, i assume that we have the funds. unless something strange happens. supervisor chu: i believe we have been joined by the sponsor of the legislation. thank you for joining us. what would you like to make a few comments?

>> kennellcan we [unintelligibl] supervisor chu: based on the fact we have been joined by a member, we are convening as a full body. the supervisor avalos: this appropriation is going to be able to enable the ethics commission to be able to carry out the public financing program for the mayor's race this november as well as set in

motion the public financing program for the 2012 elections that will happen that year. according to the budget analyst report, we could end up with about $300,000 depending on how many candidates will be receiving public financing for the mayor's race. it could be that we have less money than that. to me, it makes a lot of sense that we find as full as we can be public financing programs that we have the type of campaign that the voters have approved a about a decade ago. the real intent behind the program is to level the playing field for candidates