we have estimated the additional city costs and we have worked with the fire department, muni, etc.. there is a cushion of $7 million, $8 million to the general fund beyond just the property tax revenue. >> if i understand this correctly, currently the property tax margin is 8.8. payroll tax and etc., we are expecting $20 million in revenue from that with $40 million incurred in expenses against that. >> correct. there are police officers there nell, so this will be an additional cost to the city, using today as the baseline. >> given a scenario where we might see finance is not coming out the way that you expect,

what are the options for reevaluating the investments? >> we have a fairly large cushion of seven or $7 million to protect against that. to your second point on the infrastructure improvements, when the developer makes those initial improvements, they will be paying for them with the anticipation of future property- tax revenue. they will issue bonds to basically buy back those improvements. the streets, the sewer lines, the water lines, etc.. really, they bear the risk on the future development not generating enough revenue to buy back those improvements. the bondholders in the situation only rely on property tax. bondholders have no resort --

recourse back to the general fund for those bonds. it is really the risk of the developer, whether they will be reimbursed or not. supervisor chu: thank you. with regards to redevelopment, there are still a number of things that aren't certain that -- and certain that the state level -- under certain at the state level. can you tell me why we should be moving forward with an ifd, given that the finances there are not as good as a redevelopment area? >> there have been a couple of bills over the last couple of weeks that have been put forward regarding the development. those bills have been tabled by

the legislature. it is still uncertain what will happen with redevelopment. the amount of increment propose to be available would be significantly less, perhaps even less than what is available. while we do not know what will happen to redevelopment, we are fairly certain that it will not be as robust a tool as it is now. the mayor is certainly on record as saying that he would like to see redevelopment continue. that we do right. our anticipation that the state level, given the vote that happened a couple of months ago, it narrowed the past by just a handful of votes. we anticipate something happen to redevelopment. in this case, with the

amendments proposed, we could get back to it redevelopment scenario in this project. supervisor chu: is there anything that would prevent us from reverting back towards to redevelopment plan? if we go backwards to create an ifd, is it better financially than ifd? could we switch back to the redevelopment area? >> absolutely. we would have to switch back to a redevelopment plan, which we were actually doing. but it is prohibitive to go the other way. if we could form a redevelopment plan, we could not go to an i fd. supervisor chu: the budget finance committee had before us not long ago an ifd that was put

forward as a pilot. one of the reasons i was comfortable with that proposal is that we said we would put together parameters under which we would approve future ifd's. under what circumstances would be ok for us, the city to, to forgo. given that the budget and current situations are always something we have to look out for. we said we would create protections with parameters, but we are not at that point. we have no parameters that have been approved in any draft. how should i think about this or feel about this even before we have considered it. >> a great question. this does not necessarily fit into what we were discussing before. we may have to, after we figure

out redevelopment, after the state figures that out, if ifp is going to be a tool in the future, there may have to be other projects. like in the mission yard. with a substantial amount of that revenue being put back into the project for infrastructure redevelopment. i do not think that we are able to make that argument. but for open space improvements, we would not have development. our office is happy to work with you in making that distinction between the projects that are like redevelopment as opposed to the nicer to house projects, where development would happen, i believe, but you might want to maximize actual amount of general fund revenue to ifd-type

improvements. supervisor chu: thank you. supervisor kim: i wanted to thank the chairman for asking some related questions. i wanted to clarify, in terms of if you could go over the breakdown of property taxes that the general fund receives, what are the two great papilla >> under redevelopment, if there is a dollar of property tax, currently how it works is 80% of that property tax could be used for redevelopment. 20% of that is set aside for affordable housing. the remaining 20 cents is distributed to taxing entities. much like the dollar property

tax. the school district would get 7.7%. under this scenario, the city is able to allocate a portion of its 65 cents. the general fund portion. it continues to go to taxing entities. the school district actually benefits under the ifd scenario. they would continue to get 7.7 cents on the dollar. under redevelopment, they get less. they only get 7.7 cents of 20 cents. other taxing entities also benefit from an ifd supervisor kim: the one thing -- an ifd. supervisor kim: could you clarify again, the city general

fund gets the same percentage between ifd ifand redevelopment? >> you make that determination. you would determine how much of it is gotten. in this case we are asking for ifd to get 50 cents in. under redevelopment, the general fund would get 65% of 20 cents. about 13 cents of every dollar, with 80 cents going to the redevelopment agency. supervisor chu: by a understanding is that the previous boards have approved the policy goals of the plan under redevelopment? previously? >> from the plan areas, yes.

supervisor chu: supervisor mirkarimi? oh. supervisor mirkarimi: to sum up, based on the important exchange, we want the ifd certainty. but financially, redevelopment would be more beneficial. the problem is that it is dubious about redevelopment cost longevity. so, this is the right way for us to be able to structure the financing mechanisms now. we do not know if redevelopment has a future. >> that is exactly right. even if the bill proposed before redevelopment, the state was proposing 25% that would have gone to redevelopment. we would have wound up with, if that bill passed, with the rest -- with less revenue.

supervisor mirkarimi: i know that in the press conference this morning, a great amount of appreciation to our sacramento delegation in attempting to forward with a bill that helps us in shoring up about 5% affordability. but have not heard people talking about aiming that lobbying effort on the governor to make sure that he signs the bill. >> you are exactly right, we do. supervisor mirkarimi: i have not heard anyone say that. >> there have been a lot of discussions with the governor in his office. we got ifd the got -- we got the signal that ifd is the future of redevelopment. supervisor mirkarimi: right.

but to assist the senators, ultimately speaking it is governor brown the stands at that intersection, whether this will become a reality or not. >> true. supervisor mirkarimi: wanted to make sure that we were clear on that. supervisor mirkarimi: fight -- supervisor chu: i know that we have two suggestions before us. one is to change it from two years to a five-year period of time. if i would like to confirm with that the department, that is something the department submitted as a change? and the second is a suggestion by the supervisor regarding ap current transaction fee in downtown san francisco. it's out of like there was an agreement to make that change.

>> revised copies of the financing plan, they did make some changes and those are on file. supervisor chu: let's take action to except those submissions and changes without submission. with regards to the items before us, my understanding is that we should send the item out without recommendation, pending questions to the eir, making sure that we are completely compliant. if i can entertain a motion to send out items 9 through 12? supervisor kim: i was going to move forward with positive recommendation. and we will -- can we do depth at this level? but there is no final document in place until there is action

-- >> there is no final document in place, no final secret document, and in that case of the board is not allowed to take action on the underlying project. the recommendation from our offices that this committee forward this to the board without any recommendation. supervisor kim: understood. supervisor chu: thank you. we have a motion to send items 9 through 12 to the full board without recommendation at this time. we will say that we have got the motion and a second. thank you. supervisor mirkarimi: can we be clear, when this returns to the board is on june 7? is that right? ok. supervisor chu: we are running fairly late on our schedule. we do have a regular, fully constituted committee starting

supposedly at 1:00. we have one more item before us. if we can call that item, this is the release of reserves for i.t. for people here in the room for the 1:00 session, likely will go to a short recess and then come back. thank you.

supervisor chu: if i can as

those here for the previous item to lower your voice is or move forward so that we could finish our agenda? that would be great. mr. young, please call item no. 7. >> item number 7. hearing to consider release of reserved funds, department of technology - committee on information technology fy2010-2011 budget, in the amount of $3,196,686, to fund the consolidation, standardization, and optimization of the city's technology operations and applications. supervisor chu: thank you very much. this item did come before the budget and finance committee previously. we released half of the reserve. it is getting to the point where we need to consider the remaining portion. i believe that supervisor david chiu had intended to join us, but we are getting started given that we are running late on time. please provide the presentation.

>> thank you, chair person. john walton, chair officer of the department of technology. i will give a short presentation, given that we are running short on time. we have some handouts for you quickly and hopefully we can get into the question and dialogue where you can ask their questions and hopefully feel comfortable moving this forward. since the last meeting that wanted to highlight that we have continued to make progress on the data center consolidation project discussed previously. we have moved forward with this idea of continuing and using consolidation as a way to save the city money. the progress that we made was finalizing the two sides with a new facility at the airport. they are now partially staff and

actively working with the department of human resources to fully fund the staff. all of the departments participating are donating time back to make sure that we stay on schedule. there are a lot of volunteer effort going on to make sure this moves forward. it is a template to show how this type of technology can be beneficial to the city. the service to be directly maintain. we will be virtual lysing 70 of those servers over the next month. we will report back you during the sixth period. we have been going down as fast journey of consolidation. there is the e-mail project we are under way with no. another good example of how we started to bring the other

disparate systems in the city. we have talked about enterprising agreement we have done in the last year and how they have saved us money in the city. we are well under way in replacing those city fiber lines. the thing that i want to stress, when we talk about datacenter consolidation, it is just a slice of apply. when we talk about shared services and consolidation, i know the data services get look that a lot. that portion of the business really only represents less than 10% of whatever is spending our money, a citywide. we talked about other areas where we could continue to push this idea forward to make improvements. again, we are talking about continuing to leverage.

we are talking about cisco systems, microsoft, doing these things city-wide. we have talked about moving to new types of technology to replace traditional systems with bases that are much lower cost. a pilot project was done to consolidate support services in geographic areas. as you know, most of these departments have the roads that. hsa was a leader for us. bringing together how they could share staff and looking to expand the program to look at, seeing how we can shares that. another technology we are currently looking at and considering in terms of a way to save the city money, we spend quite a bit every year in replacing personal-computer is

around the city. it has somewhat of a negative impact in terms of waste and things like that. there is a movement in the industry where we are replacing physical personal computers with virtual personal-computer. we will talk about how that can benefit the city. there are discussions of combining the mail functions in the city. the one that is exciting to me, as we think it is an area where we can stop looking at i.t. as an expense that looking at it as a revenue source, but would like to start aggressively marketing the dark fiber that the city helms, generating revenue for the city, working with other companies that are at that -- interested in attempting to market that capability, making the city some money and offsetting the deficit in the

general fund. i know that that was brief. i cannot think that you need me to be the slide for you. what we are asking today, i know that in the last conversation my feeling was that she wanted to be sure that we got the message that we needed to be smarter about how we were doing i t. so the to feel like we were making progress in that area. if you need specific discussion answers, we are happy to enter at this time. i would -- supervisor mirkarimi: -- supervisor chu: i would like to turn it over to supervisor chiu. supervisor chiu: i do support the release of these reserves today, although it is not with overwhelming excitement. last year these amounts were placed in reserve in order to

live the incentivize departments to find savings. i am glad that we went through this significant exercise of moving forward the data center project, but unfortunately it will not yield any savings this year. i very much appreciate the work that the department of technology has done around the city to focus on the next set of tasks that we need to do. i very much hope in the coming weeks that we will get more specificity of what these proposals mean, as well as what they both say it. with respect to the work that has been done that so far, without wantin to knock off momentum with these projects, while not a voting member of this committee, i would like to suggest that the release these

reserves and move things forward with the understanding that when they are back before us with next year's budget, we will get more answers to how these efforts will yield fruit. supervisor chu: thank you very much. quick question for the budget analyst. i believe that she may have presented previously on this item -- that you may have presented previously on this item? >> the only thing that i would add, we have not been presented with any specific budgetary savings, as the president indicated. my recommendation to the committee is on page 9, in addition to looking at this in the forthcoming budget process, we recommend that you request the department of technology provide status reports on the data center project every six

months, with the first report on june 6 of 2011. providing details on project cost for constructing the airport datacenter. the transfer of data equipment and physicians from city departments at the airport. fiscal year 11-12 reductions in budget for treatment positions and other costs related to data consolidation. if the city department has not achieved its budgetary savings from the consolidation project, the department of technology should provide the reasons for not achieving the savings. that is our recommendation. supervisor chu: thank you. supervisor mirkarimi? supervisor mirkarimi: thank you. i wanted to close the loop on something that i have yelped about a few times and i know that your department responded

in favorable and positive ways. let's have you provide the update, i do not want you -- i do not want to steal your thunder, about the unresolved issues that i thought you had close the loop on that are not currently covered by a 50 tpg and whatever other monitoring public access so that, as i brought to your attention, concerns about our dealing with larger issues, until a certain point, not taking care of sort of an outdated or unresolved business. it feels like this is one thing that you can check off. >> we agree with you. we do not see it as our thunder, we see it as a collaborative process. we appreciate your leadership

and reminders about how well we can do the big things. highlighting to the public, we have released a few memos about this and we will continue to advertise through restructuring some of our priorities. we have found the means to refund the equipment that we would need to capture the audio portions of all of the commissions. we started creating training plans for the staff. we have renewed our agreement and contract with our web- hosting companies. going forward we have what i consider to be a very good, aggressive plan to get all of the commissions and task forces reported and posted online so that people can listen to them going forward. supervisor mirkarimi: you opened it up in your remarks, which is why i wanted you to have that opportunity end of our. the i.t. department is release

synonymous with that facilitation of open access for all people. yet when we have passed legislation that has been a source of frustration for me and others that for something up that cost consuming, but we should have been able to provide that. which is consistent with a very robust sunshine law system. quite frankly, having access might actually alleviate some of the sunshine requests that in that city attorney offices. they are actually able to get that information in real time, as it is or are on this. i would encourage you to be much more promoting of the fact that this is a service that is coming on linso