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 providers, given the current collective bargaining agreement, have to work $20 a month -- 20 hours a month to qualify for benefits. the benefits package is a good one because they are doing important work and their wage is relatively low, about $11.40 an hour. we are proposing to increase the health premium from $3 to $10 a month.

this would affect about 12,000 ihss providers. increasing the dental premium from $1 a month to $10 a month. you can see the general fund savings there. >> those are the same population, 12 dozen workers roughly. >> correct. in human services, family and children's services savings -- again, not impacting services. a lot of that funding has to do with standardizing our group home payments. in foster care, we unfortunately have to place some kids in group care, which tends to be more expensive than family foster care. it could range to $7,000 a month. we propose to standardize those rates because a court decision

which was implemented a number of months ago increases across the board group home rates set by the state 30%. there is not a need to pay on top of the base rate anymore, which generates savings. two programs/policy decisions that are affected -- one is our cap grant program sanctions. this is implementing sanctions, meaning you cannot apply for aid for a time if you violate program rules. typically, an individual participating in our employment program signed an agreement that he or she will perform certain activities, typically participate in training, ged, or esl, something to improve

individual skills. when we find a client is not participating in those and after given a second chance to participate does not, under sanctions they could then apply immediately for the lower cash assistance program. we are proposing a 30-day wait between the sanction and reapply and for the program. there is what is called a remedy, if the client feels that he or she should not have been sanctioned. they can appeal to a hearing officer. in addition, if they can demonstrate that losing a month of cash assistance would generate their -- would threaten their housing, we would give them a onetime payment so they do not end up homeless. the bottom line, our working families credit -- to retain this for only first-time applicants. this is a program started a

number of years ago to incentivize families to apply for their earned income tax credit. the incentive was a local payment of $150 if that family applied for a current income tax credit as well as the child care tax credit. families get 3000 $0 or $4,000 in tax refund they did not -- get $3,000 or $4,000 in tax revenue they did not realize the qualify for. we assume that candidates who have applied in prior years -- getting the refund would be incentive enough to keep applying. chairperson chu: the mayor's office has accepted the 2.5% cut in the 7.5% reduction? >> ar commission has approved those reductions. we are currently in discussion with the mayor's office about those reductions. chairperson chu: is there

anything you would add to that? >> mayor's budget office. i think we have accepted the majority of what is submitted. chairperson chu: meaning the 10%, roughly. >> the first few items. chairperson chu: so you're still working off this list a bit. generally, they look ok? >> obviously, the mayor continues to review budget submissions. everything is moving. >> the next 10% represents contingency items. the human services commission did not approve our contingency list. the commission on aging and adult services did, however. if you think seven minutes ago to the slide on where our general fund goes, it is not a surprise that a our cuts have to

go to where we spend the bulk of our general fund, which is homeless services. these are not necessarily policy decisions we are making. it is not proposing reductions in these areas as a repudiation of the service. it is not a claim that these services are not effective. it is simply a lack of options, and reductions that we do not think will jeopardize families or single adults' housing. we are proposing reductions in supportive housing. we did propose a reduction of $1.30 million. there would be fewer staff on site to assist clients to address some of their needs in addition to the housing. we propose a 1% cut across the board to transitional housing. it represents a very small cut to individual community-based organizations. emergency shelter reduction

moves the shelter on the corner of polk and geary from a 24-hour operation to a 15-hour operation. individuals would not have access to their bed 24 hours a day. we could reduce some stuff on the upper floors. there is a proposal to reduce our resources centers or homeless drop-in centers by 80%. resource centers do not provide -- they may serve as a link to housing and shelter, but it is not necessarily a direct housing cut. "we are proposing is reducing about 80%. the remaining 20% would be used by the resource centers to provide shelter reservation services. we would increase access to emergency shelters, but eliminate the ancillary services, which is access to voicemail, case management,

laundry, showers, respite from the street, and chairs during the day. the staff associated with that would be eliminated under this proposal. the last is employment services to individuals in support to housing. we do have a one-stop center now in the tenderloin. this would eliminate not the entire program, but the general fund branch. children services -- the sort of policy decision here is to focus on families and children already in the welfare system. the home visiting and kinship services are things to provide to families who are not currently in child welfare. they may be close to support, but the level of crisis has not risen to the point of removing their children from them and putting them in foster care.

you might say that is prevention money you are eliminating. the answer is that is correct. looking where to save, we decided to focus on families in crisis within our system, retain the funding there, and scale back some preventative services to families not engaged in child welfare. the last is a match of a youth's death and four kids living foster care. there still is some funding there, but this represents our general fund independent living skills program. chairperson chu: just for the context, this represents the general fund overmatch. what is still there? you can get back to me. >> i think the program overall is probably funded $800,000 or $900,000, federal funding. the stipends are for you to our

emancipating. as of january 2012, foster care will be available up to age 21. each subsequent year adds a year of eligibility for foster care. so the need for the stevens will go away. other options -- reducing child care. direct subsidy elimination for 17 infant-toddler slots. this is less subsidy for families that are low income. we are also looking in at reducing the country to the entity that oversees the system. given some state proposals are run child care, these could have a significant impact on our ability to deliver the child care subsidies to families on public assistance. proposal to eliminate the working families credit

entirely. we save 800,000 by eliminating it to first-timer's. this would eliminate the program entirely. i mentioned earlier cap program reforms. the first would recoup county general fund that is spent on providing a homeless shelter services and housing to cap families who have applied for federal disability. currently, we recoup cash assistance that we pay, but because of our care not cash model of providing entitlements to housing -- those are not able to be recouped. when an individual gets ssi,

the city or county removes the portion it has spent on that client, who would receive less money. the caap program freforms -- reforms. this would make it a single program with a single grant level. individuals in the higher grant program would see a great reduction. individuals on general funding would see a net increase. again, i show this to show you that we have limited options and most of our options would harm people. move to cash assistance is already at a significantly lower level. supervisor kim: i am sorry? >> we currently have the county assistance program -- we have the general assistance program, which is the state-mandated and

county-funded safety program. we have our employment program for single adults, which is a higher grant. we have a social security pending program for disabled adults. we have a set-aside program for individuals report -- individuals who receive medi- cal. we would eliminate those programs. not the services within the programs. we would continue to provide services, but we would eliminate the three programs through ordinance and a line the grant levels. currently, i believe one is $400 a month, one is $345 a month. this would move to $380 for the standard brand across the board. there might be administrative savings, which we have not built into this, because clients would not be applying for different

programs at different times. you would have a more uniform standard for eligibility. winding down, these are the options that were approved by the commission. office on aging is our third largest general fund expenditures. a lot of these reductions come from office on aging. they include a reduction in case management services for senior centers, nutrition are feeding programs, services to address individuals who are hoarding and clustering, legal services, and naturalization services, and transportation services. these are direct services provided to seniors and dependent adults. they would simply be scaled back under these proposals. the last bullet you see is out

of in-home supportive services, which is to eliminate the dental coverage entirely, which would save the county almost $4.20 million. just briefly, state budget issues, as i said -- our agency is funded significantly with state dollars. state budget proposals have a direct impact on us. the realignment proposal proposes to realign child welfare services and adult protective services to our agency and to create a set-aside revenue stream for those programs. in terms of child welfare services, there is no increase flexibility, as argued by the governor, because our child welfare program is mandated by state and federal law. the federal law specifically establish a statewideness, which means each county has to have

similar support for kids in foster care, a similar range of services and activities. we would have a program realigned to us, meaning we get a set-aside revenue source, with no increase level of flexibility. the concern in addition to that would be the amount of money that is realigned. currently, we argue that we are underfunded in child of her services by hundreds of millions of dollars. if the base is realigned, at the deficit level we will be locked in as a city and county to that law were amount. we continue to negotiate with the governor's office about setting that base. in-home supportive services -- the legislature approved reducing expenditures, unallocated reduction of about 8.5% of $20 million throughout the state. there is no specific policy shift. it is not specifically eliminating services to the

category of recipients. it is just saying we will achieve this amount of savings through a series of reforms and policy changes, to be determined by the legislature. it could mean changes in eligible populations. it could also mean other options. the second proposal is recipients are required to provide a dr.'s certification that without in-home supportive services the individual would end up in institutional care or nursing homes. the state assumes a savings for that, assuming some individuals could not get that certification the interesting piece about ihss, as the state passes its savings down to the counties and we see a reduction in caseload, we actually save money. a series of reforms the governor proposed -- between $12 million

and $15 million of general fund savings because we would not be paying the county sheriff for clients who are no longer eligible. the policy decision for us and for our community partners is what we do with those general fund savings. should we see a safety net or in-home care for thousands of seniors go away? that is an important discussion we need to have with community partners, as well as the board of supervisors and the mayor's office. cal-works reforms primarily affect families and not our budget. it eliminates the time on aid from five years to four years. it does not affect our budget director. it certainly affects families. there is a proposed $100 million cut to our cal-works

administration money. we would see a cut there. medi-cal, a small cut to administrative allocation, about $24 million statewide. a series of reductions in child care that threatened to dismantle the system of early childhood education that we put together in san francisco, specifically at a 15% cut across the board to reimbursements for all state contracts, a decrease in reimbursements for a license- exempt care, decreasing the income limit from 75% of state- median income to 70%, eliminating funding for the eligibility list, and eliminating or reducing the administrative fees that our administrative agencies get to

assist in implementing our child care program. those are huge cuts to san francisco. our providers are already struggling to make ends meet, given the high cost of operating to of care in san francisco. this reduction of 15% would further compound the problem. we would see, unfortunately, licensed centers that would have to go out of business. with that rather lengthy presentation, i will go ahead and wrap it up. i certainly welcome questions and comments. chairperson chu: a quick verification on slides 13 and 15. did you indicate earlier that the commission had approved these contingencies? >> that is correct, supervisor. chairperson chu: not the contingencies for hsa. >> there are two commissions.

human services did not approve our contingency plan. they directed us to come back with more options. the other commission did approve. chairperson chu: the mayor's budget office -- you have not finalized any decisions with regards to contingency yet. >> just to clarify, the mayor has not signed off on any proposals, either in the 10% target or the 10% contingency. the 2.5% in the current year obviously was taken by our office, but not the 7.5% or 10% contingency. the mayor is committed to an open public process. he has invented stakeholders to meet with him to discuss these proposals. we are having a budget town hall meeting of the next few weeks. but i think the point is that whether it is the specific proposals or others, we will likely have to take all of the 10% target as well as some or

all of the contingency. we are looking forward to working with you to figure out what specific proposals we should implement. but i think it is likely, if you look at the targets -- even if we took all the targets we received, i think it is $18 million to $100 million in savings toward our deficit. that leaves us very far from solving the problem. i think we have to start seriously considering the contingencies by departments. but the mayor has not made a decision. chairperson chu: less time, i remember when the mayor's budget director provided the tentative balancing plan. he indicated that if the mayor had taken all the 10% reductions and the 10% contingencies we would still be out of balance by about $120 million. i remember