number of journey level positions compared to managers, so we are trying to keep those ratios in line. we are trying to look for additional efficiencies and savings. likewise, we are trying to move toward bigger contributions to the retiree health trust fund, so we can eventually start to pay down the poor $0.60 billion liability -- the $4.60 billion liability we're trying to pay down. chairperson chu: that must point is we ask new employees to put 2% toward the health care trust fund for their future expenses for health beck's what it sounds like you will be looking for is whether active, existing employees can do the same.

>> exactly. chairperson chu: before we end come on the premium side, i appreciate try to make sure that as mous expire you will look at premiums and whether they are providing a value for what we are paying. one of the topics supervisor chiu and i were looking at was the issue of language access. there may be folks who were getting a premium for language, whether or not departments were using those employees to provide that benefit to the public. that was something we were not very clear about. as this item goes forward, that will be an interesting thing to watch for. as it relates to language issue, that would be something i'm more interested in hearing about. what do we open this for public comment? are other members of the public who wish to comment on this item? seeing none, public comment is closed. do we have a motion to file this item? we can do so without objection. thank you for your presentation.

let us go to the next item. >> item 3, hearing for an update on the fiscal year 2011-2012 budget submission from the human services agency. chairperson chu: this item is the beginning of one of many public hearings we will be having on the budget. one of the things that was brought to us was whether we could start having an earlier conversation around what the choices were for some of the budget cuts we would be seeing. we wanted to bring forward not every single one of the 60 plus organizations in the city budget, but some of the largest general fund and direct service organizations. the first today is good to be the human services agency, which also comprises the department of aging, or aging services. we do have an overview from trent, i believe. >> anne is out of town, but

shireen is here. >> i am the director of human services agency. i appreciate the opportunity to speak and present early in the process. as you know, it is another tough budget year. it is always welcome to be able to start the public dialogue early. to that end, but i will be presenting is a fairly high- level overview of our budget and funding in general, and then talk specifically about the cuts we have proposed to date to get into line with the mayor's directive to reduce our general fund by about 20%. there you see the mayor's budget instructions. two areas of cuts. one, 10% of our base. the second would be a 10%

contingency reduction, should the city need to go to the second at 10%. i will walk through the list of cuts later in my presentation. we have brought our proposed budget to the human services commission. the commission approved the first 10% reduction. the commission did not approve the 10% general fund contingency reduction. what i will be presenting to you is a whole list of possible reductions which will total more than the 10%. it will give you a sense on the areas where we have to cut to get the general fund target. the $18.60 million -- 20% represents 20% of our general discretionary fund, which is only $93 million. the agency budget is over $680 million. but when you look at the required maintenance of effort and entitlements, in the form of

cash assistance to families and individuals, the amount of money we really have discretion over is about $93 million. as in years past, we developed some guiding principles. this helped guide our thinking through the months of discussions with the community internally, and with our commission on where we would reduce. they are framed and given the environment of fiscal austerity. these principles would not look the same if we did not have to make budget cuts. the first one is to preserve programs and services that meet basic human needs. given the extent of the cuts we have had to endure in the last number of years, we are down to looking at the overall safety nets, and being defined as

housing or shelter, food and nutrition, protection from abuse and neglect for elders and children, access to health care, and income support to families and single adults. you might say that seems like all human services does. i will give an example of where we go beyond simply providing basic human needs. our support of housing portfolio, for example -- we provide services over and above a safe building. we provide case management with hopes of helping folks find employment, helping folks address substance abuse or mental health needs, manage their money. you can look at that and say it is over and above us in providing housing for the population, and it is. a set of our proposed cuts does just that, reducing services will not jeopardize in housing. that is one example of how we

use that as a lens. second is to minimize production to services that use out said revenues. we at the human services agencies -- we leverage significant amounts of federal and state money. we do not want to cut in areas where we will be leaving state and federal money on the table. our food stamp program, which dropped 85% federal and state dollars. it seems silly to cut one position to save 15 cents on the dollar. at the same time, that limits fortresses. you will see later among our discretionary general fund, there are very few areas that do not leverage dollars. it produces hard choices. the third is to maintain client services. there are mandates to go with federal and state money. we do not want to cut in areas that would jeopardize us meeting

those mandates. the fourth is to develop business process improvements and efficiency. we have done this significantly and are processing of applications for public assistance. i can talk about that a little more later. the last is considering program effectiveness of specific programs. this is to avoid across-the- board cuts. for example, all community-based organizations will be cut x%. rather, we target areas where there may be underperforming contractors or underperforming areas internally. the aging and adult services, the principles are similar. serving the most vulnerable consumers, including those who are isolated or living in poverty. the rest of it is maintaining access to information services for seniors and disabled adults. it targeted rather than across

the board approach to budget reduction. communication is important, especially in times of uncertainty like we are in now. communication internally and externally maintains the effectiveness of our programs and services that we deliver. continue to seek other financial and revenue scenes -- streams. that is another way of saying leverage more ofs' the state dollars. the award collaborative ventures among cbo's and city departments to create efficiencies and save money while not jeopardize and services. chairperson chu: i know you are going to start to go into the budget a bit. in terms of feedback we have received from folks, during the budget process we do not often get the chance to talk about a department's overall policy objectives and core areas of where you see the long term vision of the department go. that is because we have so little time to do that during the budget process. we are talking about cuts and

other things. given that opportunity, can you speak a little bit about the longer-term policy objectives that you are seeing? are there areas where you believe the department will grow in terms of desire and to provide more services in one area? are there areas where you see shrinking because of changes in the? -- in aneed? >> that is a good question. i could go into a lot of detail. we have done a five-year financial plan, which is required now, looking at what the human services agency would look like. we know there will be significant growth in our medi- cal population, given passage of federal health care reform a year ago today. because of the large eligible populations that currently do not receive medi-cal, we

anticipate a 50% caseload growth, adding about 36,000 sentences since -- san franciscans into our program. that is a big increase. at the same time, we are not anticipating an increase in administrative support dollars to address a caseload that is good to grow by half. when we look internally and long term, we are looking at our business processes. what can we do more efficient -- efficiently with the same number of staff, and anticipating no increases to our state funding for food stamps, medi-cal, etc., or funding on the margins that will not really help us add staff. an example is a call center model and a task management

model in terms of making eligible families and single adults, moving away from a model where a client would have to reach a particular case worker to get the problem addressed. rather, they would call a central number and get assistance right away. that works with ongoing eligibility as well as intake. in addition, we have developed a web application for food stamps and medi-cal and will soon expand to other programs. it is a way not only to increase access to our programs to those who are entitled and deserving of the benefits, but also to simplify our processes, to allow technology to do a lot of the front end work that his workers had to do prior to this technology. this is not an effort to privatize our work through web- based services. it is not an effort to reduce staff. it is recognizing the growth in

our programs so we can provide the same or better services with the limited dollars we see down the road. another point is our foster care program. we have seen significant decrease in the number of kids in out of home placement in foster care. we have seen a decline of 50% from a high of 2500 kids a few years ago. we now have 1300 kids in care. that is great. we want kids with families. we want them adopted. we do not want them in foster care. we do have an opportunity to provide foster care payments up to age 21. that is a significant shift in terms of what we do for youth in the san francisco who are in the system. now they are 18 years old and no longer get support payments. within three years, kids in foster care will receive assistance up to age 21. it is a huge opportunity to

provide the money to go to college and to support their housing needs and the like. the other area we are experiencing nationwide is significant growth in our senior population. it is the fastest-growing population in san francisco. in health supportive services, the city strongly believes, as stated in federal court cases, that seniors should be served in the lowest threshold environment possible, meaning the community. health supportive services service over 20,000 seniors and disabled adults every year. we will see a significant increase in the program. at the same time, we are seeing a significant ratcheting down at the state level. even this year, we have to come to terms as a city on what our role and responsibility is for that population as the state

retreats from supporting some of our most honorable citizens. we will also see likely growth in adult protective services as well as needs in our office of aging programs in terms of transportation and the like. we are bracing for those changes as well. the last big area is in terms of our welfare to work self- sufficiency programs for single adults and families. given the success of our jobs and now program, which is federal money to provide subsidized employment for families and single adults on public assistance -- given what happened there, where we sought a significant number of families leave public assistance and retain their jobs after the subsidy -- this is a strong direction where we're going to go. we are looking to reengineer what we do. the state has recognized this. the budget language this year is

providing more flexible dollars to allow us to do this. it represents new partnerships with the private sector that we have not historically had. it really turns us into not only an agency that can help families get out of poverty, but an agency that can contribute to economic growth in san francisco. those are some of the high points. i could go on and on. this next slide it breaks down where funding is across the agencies, so across both departments. $683 million budget. about $420 million of that is from federal and state sources. the rest is general fund. our largest is adult services, which is largely in-home supportive services and health protective services. the next largest is our foster

care and adoption system, which i noted in my comments a couple minutes ago. this provides a good overview of what the agency does. we provide to of care subsidies to low-income families on public assistance. we provide welfare to work services and public benefits for families who are low income. food stamps for a smaller population. metical for a similar population. public assistance to the county for single adults. that is primarily cash assistance and housing assistance for single adults. the last area is our homeless services division. i highlight that last because it is the largest percentage of general fund, as you will see in a second, among those program components. it is comprised of everything from emergency shelters to the back end of the transitional housing.

and, you can see as a go from side to slide how our options -- as i go from slide to slide how our options narrow as we look at what the general fund supports in terms of programs. 125 $5 million is in jobs, cash assistance payments, foster-care payments, and in-home supportive services. these are areas that we cannot reduce because they are entitlements mandated by county ordinance or state or federal law. you can see also in the green our operating $93.90 million. this is what we call our discretionary general fund. the last two slices are special funds mandated by ordinance. the human services care fund,

the $13.70 million, and the community living fund of 20 to play $5 million to support disabled adults to live in their community. chairperson chu: if i am understanding your sled correctly, out of the general fund budget that we have of the 230 million, only about $93 million is what you consider truly discretionary? >> that is correct. chairperson chu: the rest of that is the amount you see in the blue. >> $120.50 million in aid. that is county assistant payments to single adults on welfare. it is in-home supportive services, wages, and foster care payments. chairperson chu: so we do not have discretion to change that

because those are mandated amounts. >> we actually do have the authority to change the amount on the county assistance program side. the level of cash assistance is governed by local ordinance. currently, we have a bifurcated program where individuals who are pursuing employment or a federal disability application to get a higher crude amounted than individuals who are simply engaging in services. there are several options that we have. the will talk through them if you want more detail. they could save money on the county home assistance program. but what that means in the real- world are lower cash grants for single adults. already, the highest cash grants are about $440 a month. living in san francisco, that is not sufficient, unless you have housing or a shared housing

situation, or supportive housing. chairperson chu: clf stands for community living fund and hsc is what? >> that is a special fund to provide housing-related services. further narrowing down our general fund, where does it go? you can see the bulk of it goes to housing and homeless services, 36%, with the second largest area being cap, and then office on aging. when i walked through the proposed reductions, they largely come in those three areas. we simply do not have a lot of options. when you start looking at the general fund and other categories, that is where you start leaving federal and state money on the table. we will talk about how we

leverage dollars to those programs. family and human services, if you eliminate one child welfare worker, you will save about 60 cents on the dollar. the other problem that creates an, and you see this in counties across california -- as you start eliminating staff in those areas, the start leaving state and federal money on the table. in subsequent years, the allocations from the state get reduced, the allocations for the budget year and a budget year plus one. those are based on what counties spend the year prior. as we start leaving that money on the table, you start to get a spiraling down of our state funding and corresponding federal funding, which limits our ability to hire staff to serve needy families and single adults who are trying to get assistance to us. chairperson chu: on slides 7,

you show the breakdown on general fund expenses into these areas. taking one example, if we were to take food stamps and reduce 4% general fund amount, for every dollar we reduce in food stamps we are really losing more, because we leverage 85%. >> correct. for every food stamp eligibility worker we eliminate, we will save only 15% of that individual's wages and benefits. >> basically, we put $15 in and get $85 back. >> correct. food stamps is our fastest growing program. we have seen the caseload increased about 40% over the last year and a half. we have not added a significant number of staff. chairperson chu: is their capacity to grow in that area? >> due to hiring constraints, we

are leaving state and federal money on the table with food stamps. year end, we will have a million and a half dollars of state money we cannot spend. given the general fund constraints, even 15% of that has been difficult to argue for. the way we deal with such a huge increase in caseload -- we are talking 40% of a base of 20,000. this is a large number of families and single adults. we look at our business processes. this was a pilot for our call center and/or web application. it was a way to serve thousands of people with the same amount of staff. i think the quality is measured by some of tricks we have in place around payment accuracy and timeliness of payment. any other questions?

this lays out of leverage. you will never seen the proposed eliminating a medi-cal worker, because we will not save a dime of general fund. the way medi-cal works can reduce our general fund spending because of the way it contributes to our overall cost of running the agency. cal-works, similarly. we have a 2.5% match on grants. we have a small maintenance on our allocation. it is ostensibly 100% money. family services are child welfare workers, social workers. adult protective services have a significant leverage of state and federal dollars. cap, we leverage 100% -- we leverage about 20% for stuff,

largely due to advocacy. just to give some context as well when we are looking at reductions for this year, we have been in, as you know, city and county budget deficits for the last number of years. we have responded not only by cutting internal operations and community-based organizations contracts. we have reduced staff by 11%. if you look across our caseloads, we are serving more people every year. it represents 219 positions. i highlight this because when we were deliberating about our cuts this year, looking at our staffing, we did not see any options, or we saw very few options, a position here and there in the administrative ranks. in terms of front-line staff, given the pressures of federal

and state mandates and increased demand on our services, the dire situation of some of our families who are coming to us, we chose not to cut those areas. we cut 67 positions in family services largely because our foster caseload declined. but we only save 60% of their wages. you see in our budget proposal that we have not proposed in the making any positions. we are, however, carrying a vacancy rate well above our salary savings percentage. a board vacancies right now -- probably carrying about 250 vacancies right now. that is a denominator count of about 1600. that is about 18%, 17%.

even though we are not proposing to reduce any positions, we are struggling getting approval to higher positions, even with the leverage. i think that illustrates the difficult position the city is in. even finding a match, 15%, 40% match, is difficult in these times. here is our first 10%. i argue our first 10% would not impact services at all. we looked at internal operations. we looked at understanding by our contractors due to a number of factors, whether it was a housing development that was slow because of construction delay or spending by a large contractor because of staff turnover and attrition. you will see that thread throughout our proposals. our first 2.5% was internal operations -- i.t. and

contracted services. the next 7.5% -- administrative savings, savings anin i.t., adjusting salaries of new hires, savings in real-estate, and the like. contract savings, not affecting services by reducing contracts, but recognizing there will be underspending at the end of the year. there are a few policy decisions in the reduction. the first is looking at the benefits that the in-home supportive services workers get. the currently pay a health premium of $3 a month. we are proposing an increase to $10 a month. i should say that cannot i should say that cannot providers, given the current