with citybuild to do it post graduation placement services and follow up with the project. there are some basic numbers involved here. the union has -- we need to talk with them further but there is a set number of placing 5 community folks, essentially joined the union lines because they are being placed on call on to the harrison street project. four males, one the number graduation cycle. working with the citybuild model, similar to ours, five summer graduates. they would be guaranteed union positions. i think as the developers said, they are trying to get going on this. i think the way the schedule looks, we are still in discussions on that.

the training programs are generally 14 to 16 weeks. if we can get citybuild set up for the next cycle, when that cycle graduates, which is still kind of in flux, then they can be placed onto the developer's project site. the schedule is in flux. i would say the only basic numbers are looking at roughly 15 per year, specifically on the side coming out of the trading programs. there are still opportunities for other folks coming in through other venues on the project also. supervisor kim: i am not sure if you are even the right person to ask, but what does 30% mean? what is the number for that? >> in terms of the actual projected the entry-level jobs? >> are you talking about --

there are long-term permanent jobs that will be somewhere between 12 and 15 actually working on the project. that could increase depending on what happened with the park. we do not know where that will stand. we are guaranteeing the 30% of those jobs will be from soma local hire. we have agreed to do that, absolutely. supervisor kim: but roughly what does that mean, 30%, what does that mean in numbers? >> if you are talking about 15 jobs, five permanent jobs for soma residents. supervisor kim: so when we talk but and you some jobs, approximately 15? >> it is just a big apartment building. supervisor kim: i appreciate the percentages. i just want to know what that number means. i know that our programs are small. i just want to make sure that we are able to meet that goal.

>> there are way more jobs in the whole union. i have seen estimates that are around 400 jobs in building the project. and you have to understand, one thing that would help is never good design. when you actually start a project, under virtually no jobs, very few jobs. you are doing excavation, digging the foundation's. it is really three, four months before as a given number of jobs. the peak of the jobs is -- in this particular project -- 12 months down the road when you have all the trades working. but the initial, not too many. they are waiting until fall. supervisor kim: so we feel confident that the training programs and existing workers and soma will be able to meet the needs that we have agreed to in this resolution? >> i cannot imagine not.

supervisor kim: since you are here, i know this is about the soma stabilization fund expenditures and not about the resolution passed in july. i wanted to ask some questions in terms of -- i know you committed to 25% local hiring. part of the legislation which you are not necessarily bound by is that you wanted to be bound by trade. what are some of those challenges to meeting those goals by trade? if not in the front end, over the long term. >> but we did last july was execute with webcor and subcontractors, the contracts subject to faa approval for the jobs. those bids were basically binding. we are subsequently going back -- actually, the first time i ever saw this was on february 7,

2011 when i got the document from the mayor's office of housing. i had no idea that we would be subject to something that we had already picked up a building permit for. in answering your question, we are going to make every effort to do it by trade and we will track hours by trade, but we are committing for 25%, which is higher than the 20%, but we cannot actually legally commit to do it by trade. there are a lot of trades -- for example, plumbers only have 18%. they live in san francisco. it is very hard for us to actually do it by individual trades. we will make a best effort to do that, we have agreed to -- both webcor and i will be running the

original subcontractors, asking them to give preference. we have done business with the electrical pension funds. we are going to sit down with them but they are going to lean all over the unions. we will not try to do it our best by trade as well but we cannot legally commit to that. supervisor chu: thank you. supervisor mirkarimi? supervisor mirkarimi: just a couple of statements. one of the critical pieces to this is the fact that there is strong compliance with our first source law. after we upgraded the first source lot in the last several years, that obligation has now got to be delivered upon. if i heard mr. erickson correctly, they will have to deliver by making sure that this is all solidified with them in the next 48 hours, with regard to their ability to proceed. that is a vital portion.

the second part is, there are a number of other reservoirs of bodies, other than just citybuild, where we can be recruiting and enlisting people. but citybuild is through the primary reservoir, in particular. i think citybuild is the most well-known, but it is disconcerting a little bit because there is sometimes a cog in the pipeline of them being able to keep pace, especially now with the economy turning around, and then being able to turn out graduates and people who are ready to hit these work project areas so that we have the skilled talent so that we can put them right to the job sites. so there has to be a more concerted effort in working, not just with that central reservoir of citybuild, but working with the one-stop job training centers that are also located in

a variety of neighborhoods, in particular, like chinatown, western addition, mission district. not everyone goes through citybuild or those one-stop job training centers and vice versa. that is why the nets need to be more splayed in a way that is more better at attracting people in those impacted neighborhoods. i often hear about citybuild, which has been very effective and we hope it can continue to be, but it is not just citybuild. supervisor chu: thank you, supervisor mirkarimi. we have taken public, already. the item is before us. i believe there are recommendations and amendments. to the city attorney, those recommendations would not be sensitive? do we have a motion to take the recommendations as articulated by the department? ok. we will take the motion to amend

without objection. on the item which have a motion to send this item forward as amended to the full board with recommendations. without objection. thank you. item five please. >> item 5. hearing to consider release of reserved funds, department of technology - committee on information technology fy2010- 2011 budget, in the amount of $6,393,373, to fund the consolidation, standardization, and optimization of the city's technology operations and applications. supervisor chu: thank you. i believe we have mr. walton hear from the department of technology and mr. vincent. >> thank you, supervisors. john walton, the part of technology. we have a brief presentation for you today regarding the item you are hearing, the release of

reserves. associated with the presentation is an update under way to consolidate data centers around the city. we are handing out an updated presentation for you because we just did a few of the numbers to make sure there were up to date. there were no significant changes in and out provided to you. with that, if you do not mind, i will go through a few slides. and then i am sure you will want to have a conversation about this. a bit of background about the project, the technology reserved established would generate savings through city- wide technology, accomplished through across department corporation. i.t. is very centralized. some allies in the technology budget. a lot of the staffing and expenditures exist out in the individual departments to provide the maximum amount of flexibility and operational

needs of those departments. over the last year, we brought together those departments to work together jointly on a plan to consolidate individual data centers around the city into combined share data centers. the data center project that has become a key indicator of how well the city is working together to achieve these technologies savings. in that sense, the reserve has been successful. and data center operations, to put it in context, i am sure you have seen the report, consists of $70 million annually of what the city spends city what the technology expenditures. we have been working on a plan with coit. many of you are probably familiar with them. the government audit and overseas i.t. expenditures and policies city-wide, department heads, for supervisors, mayor's office, in a two-year plan to

consolidate data centers. the department's is presenting some ideas about what we think it is of benefit to data center consolidation. we think there is significant operational benefits related to this more efficient model, rather than everyone building their data centers. probably, in light of a lot of things happening in the world right now, i would like to stress it is really about disaster readiness. the traditional way we have done things in creating data centers, although some of them have been low cost, have not been the most disaster ready facilities. this new plan really improves the readiness of the city, of the equipment in these facilities, to be prepared for disaster. it is also an opportunity to become much more grain. rather than having individual pieces of equipment scattered around the city, by joining these together in consolidated centers, we are saving energy. there are some significant

environmental benefits. and then germane to the budget conversation, it generates savings over a period or after the capital investment is expected to create the centers and people move into them, then we start to see savings over time. rather than spending individually, people are pulling their money into shared centers which will save the city money. having said that, let me give you a quick update on where we are at in executing data center consolidation because we are taking actions in this area. the committee on information technology did approve some consolidation sites in the city. one is a site where we have moved data center operations from the space you heard about on march 2200 paul. we would try to maximize the utilization in the we have already leased. and then the airport -- and this

example of partnership, has agreed to construct a new data center down at the airport, using the airport staff and space at the airport to construct a shared space that the entire city should use. also unique to the project and i would like to stress, again, as an example of a partnership, rather than proposing new staff for this project, what we asked the departments to do was to look in their existing pools of staff for i.t. staff the already had and assigned existing staff to this project. i am happy to report the department of technology, health, comptroller's office, human services agency, dpw, puc, and police have all done in a dedicated staff to this project. understandably, it is an impact on their department to reassign

step away from this -- from their own projects, but they recognize the importance of it and will milling -- and were willing to make that sacrifice. also, we have tried -- i realize this is a big e eye chart, but this is a document we update frequently appeared aside from the corporation, we want to demonstrate, we understand there is a desire to see a return of the spin on this project. we're trying to show in this chart -- i will be brief about this. we are assuming the project starts this year. we are already under way with much of the virtual causation efforts. the part of technology and health are leading the way in setting the template for the city, where the project might go on this. there are some investments we

have to make over the next few years regarding staffing, construction of the new facility at the airport here. and those are the lines you see in fiscal years 11, 12, falls, 13. we are making some capital investments, buying equipment. what we are proposing to do in the short term, and in the long term, to achieve savings in the project, is reduced -- if you look at the bottom under assumptions -- reduced the level of expenditure the city makes every year on the annual replacement of equipment. across the city for technology equipment. rather than continuing the previous cycle of expenditures, we are going to reduce those traditional expenditures of equipment and redirect our efforts to the consolidation sites. around staffing, the entire i.t. community knows in the city, just like the rest of the city is faced with challenges regarding budget and staffing,

there will be levels of reduction in staffing. everyone will be able to account for a level of staff production related to this project. that is also figured into the roi calculations of this project. supervisor chu: i believe there is a question from a committee member, but i also wanted to welcome david chiu to the committee. >> thank you for the work that you have done. by way of background, we, during the budget process last year, have placed the $6 million-plus amounts on research. in part, because we recognize our city spend a lot of money on i.t., over $200 million. there is a general consensus around the city that we have a lot of inefficiencies and redundancies within our i.t. world that we need to focus on, particularly, during these tough budget times. some of the areas we have tackled in the past has been to

move to consolidate the 700 different e-mail systems we have in the city, to try to create master service agreements, rather than the contracts that different apartments have all with the same outside vendors. to work on the justice project within the law enforcement role, -- try to consolidate that project. a product of mr. walton was talking about around data center consolidation, the fact that the city has several dozen small id departments outside of the department of technology with a similar number of data centers. i'm very much appreciative the work that has been done by dt, as well as other departments, to take the several dozen data centers that we have and consolidate them into two major data centers. i want to also thank the work that has been done at coit with our budget director, controller, and others, trying to figure out if there are ways for us to both invest in good 21st

century infrastructure and save money at the same time. i do want to say, having seen six or seven iterations of this particular chart, i do hope that we will be able to squeeze out even more cost savings than this chart shows, which will require an investment of money initially in years one and two. but will hopefully lead to savings over time. i want to let our colleagues know there has been a lot of work done. while i am not excited about releasing these i.t. reserves -- i had hoped during the budget process last year that we would figure out a way to save $600 million. -- save $6 million. i understand we have made a lot of progress, and that the risk of not wanting to knock it any of that progress off-track, i think that this committee should

release these reserves and move this forward. that being said, i think we will continue to have budish conversations, as we did last year and the year before, another real conversation about other cities begin by the i.t. process. i very much hope that different cio's, it teams, dt, as well as local 21, i can help to find these cost efficiencies. supervisor chu: thank you. supervisor kim? supervisor kim: thank you. if i could ask again, what were some of your hopes in terms of the savings this year, compared to what is being rejected? and is what is being projected the $308,000? what were you hoping that we would get in terms of savings this year, year,dt had summarized? -- savings this year, opposed to what dt had summarized?

>> i think a bit closer to 2 under 25 or more. assuming the 200 budget, i thought we would be able to save 3% of that across city departments. the efforts that have been going in the last nine months on the data consolidation effort. what we found was in order to move from three dozen different centers into two, that that requires an initial upfront investment. we have to make over the next two years. while that was a disappointment, unfortunately, it is a bit of a fiscal reality. supervisor kim: given the unexpected cost that we currently have -- sorry to ask all of these questions. do you think we are on track to make these savings? i have to be honest. while i want this project to move along, and i appreciate the efforts made, i think given the current budget deficits that we

are looking at, we really need to ensure that things are moving along at pace that has been set at the past. i would be inclined not to support this release or during a smaller release and getting a report back to make sure we entr'acte -- we are on track. >> supervisor kim, you are expressing the exact concerns i have heard raised in this planning process. as some of the current members of coit, mr. rosenfield, mr. walton no, i have been frustrated at the pace of which has -- of which this has taken. i had hoped to see more significance cost savings. but i do know there has been a tremendous amount of work put in by working groups around the city to get to where we are now. i do not want to discourage that work. that being said, it has been

mind-boggling to me that we have had as many data centers have to be have had. i thought that we would be hopefully shutting down several dozen data centers in consolidating, but do it in a way that will still require millions in investment was a surprise. absolutely, i understand your concern and frustration. and as city staff knows, when you are proposing is something i have been digging about for some time. given where we are, it makes sense for us to move forward. that being said, i think this is absolutely a fairer topic of conversation for the upcoming budget. we just have to get our hands on bringing down our i.t. costs. this is something i have been focused on ever since i got to city hall. now in our third year of doing this, i feel like people are saying the right thing but we are not seeing the impact on the bottom line. at a time when all of us are looking at wreck centers in our districts being cut, street cleaning being cut, public

health centers being cut, we have to do better. supervisor chu: thank you. just a common as we talk about the data center consolidation issue. i would be the first to support and say that we need to consolidate our data centers. we do not need 50 of them across the city. we have a lot to do with master lease contracts, which i know the department is working on. there are and the number of opportunities that exist for i.t. consolidation, improvement, cost reduction. to be honest, the reason why i think we are wary are now, about where the numbers should be, are we hitting the goals or none of cost savings, is the fact that we did not have any information to base with a 10% reduction would look like, 3% with books like, when we started the conversation. we had a policy in place that we would see consolidate -- we would like to see consolidation happen, but we never put in the effort to go to the departments and say, what with the savings

likely be in a situation of consolidation? so we find ourselves where we ask, the rate of investment is not what we thought it would be, but what was it to begin with? we did not have a basis to determine what it would be. i just want to caution my colleagues. i do not believe this is a conversation about whether we have yet to meet a target or not, but that is because we never had a realistic conversation at the outset. i take issue with placing blame on the department for that reason. i still think we have a lot of work to do, but i just want to be clear, in the future, as we talk about investments and were cost savings should be, let's have a conversation with the promise to ask, what is realistic and achievable? the truth of the matter is, you have these apartments who might have a server in a little closet. are you going to be able to generate savings from rent reductions? not likely, because you will still have that cause it.

the concept of how it is that we do the cost saving is one thing, but really going to the details and talking through the departments with the likely savings would be at the outset, at the beginning, helps to setup a clear expectation of whether we meant anything or not. so i guess one to be sure that when we put this reserve on, we never had a target, we never had an outset of a plan to see but the savings would be. in terms of meeting expectations, there was not at the beginning. supervisor kim? supervisor kim: if i could ask another question. i was looking at your time line, so when are we beginning to implement the consolidation? >> we are under way right now. there are two pieces of consolidation. the physical relocation of the physical and equipment from one site to another, and then what we call the ritualization, which is taking physical devices and

creating virtual devices on fewer pieces of equipment. that part is already underway. the department of technology is consolidating our equipment to make more space for other departments to use the extra space for the consolidation effort. the department of health is under way with a study to consolidate. we anticipate the consolidation equipment, fewer pieces, not only under way, but will be done in the next 18 months. really, the physical relocation of the equipment is pending on the final construction of the new facility at airports. the construction will not be completed for another 12 to 14 months. while we will be virtual laws in place, we will not be able to physically relocate until that space is available to us. to supervisor chiu's point, we

are trying to relive it things from not ideal situations into a real data center, so we need to wait until that space is available. supervisor chu: thank you, supervisor kim. i would like to go back on the expected savings. i would like you to finish your presentation first. >> i will not spend any more time on the timeline. i would like to talk, in summary -- i think i have been most of the high points. we are asking you to endorse data center consolidation plans and the release of reserved for two reasons. one, i think the data center consolidation plan shows a new way of doing business and i.t. in the city. the city is not in a unique position of other government agencies we see around the country, large cities, states.

historically, i.t. has been treated as expenses simply buried in department's budgets. over the past few years, the help the conversation we have been having at coit and at the board is what does it really mean, what are we getting for our money's worth from technology? that has raised the visibility of i.t. spending in the city. to supervisor chiu's point, we have more data. i think now you are in a better position as you enter a new discussion about the budget. you know what we are spending across the department's city- wide on i.t. you will have the baseline data to make better policy decisions about the level and where money is being spent, the level of reductions that can be achieved. i would just like to point out, i guess, really we are dealing i guess, really we are dealing with a complex problem of -- we