>> as to the closed session item, real property negotiators return the property of 85 natoma, the board directors unanimous -- unanimously passes an agreement [inaudible] $740,000. >> thank you. with that, this meeting is adjourned.

both chu supervisor chu: hello. welcome to the regular meeting of the budget and finance subcommittee. our clear today as mr. victor young -- our klerk today is mr. victor down -- our clerk today is mr. victor young. do we have any announcements? >> if you wish to fill out a reduced make a comment, please fell at a speaker card and submitted to myself. items discussed today will appear but on the board of supervisors vision on may 17,

2011, unless otherwise stated. supervisor chu: thank you very much. would you call item one place? >> item 1, resolution approving and authorizing execution of modification one of lease and use agreement l-10-0084 was emirates for lounge space in the international terminal, boarding area a, of san francisco international airport. >> good morning, members of the committee. the airport is seeking your approval for release modification to its existing lease with emirates in order to add an additional 9502 square feet for the airline to construct a post-security lounge for the passengers in the international terminal. the current lease with the air force for 1696 square feet of

boat ticket counters and administrative offices and has an annual rent of approximately $250,000. this lease began in 2008 when the airline started service at sfo. emirates was among the first wave of airlines to sign onto a new lease and use agreement with the city. they were part of a group of airlines approved by the board of supervisors in may 2010. when they signed onto the new lease and use agreement, they essentially extended their existing term of their least for an additional 10 years through 2021. the airline would now like to add approximately 9500 square feet of club space to their existing lease. this would have a new annual rent of approximately $1.8 million and represents a $1.5 million increase in rent to the airport. under the proposed lease modification, all construction costs associated with building the new club space will be the

responsibility of emirates. the budget analyst has approved the lease modification, and i will be happy to answer any questions you may have. supervisor chu: thank you. why don't we go to the budget analyst report? >> as indicated, this increase in space would result in an additional $1,538,374 in rental revenue from emirates, payable to the airport. as you know, because of the airport's break-even policy, there would be no fiscal impact. we recommend you approve the resolution. supervisor chu: thank you very much. if there are no questions, why don't we open this item up to public comment? are there members of the public who wish to speak on item 1? seeing none, public comment is closed. supervisor mirkarimi: motion to approve with recommendation.

supervisor chu: we have a motion to send the item out with recommendation, and we can approve that without objection. thank you. item two. >> item two, resolution authorizing the director republic works to execute an amendment to the constructive services management agreement for the laguna honda hospital replacement program, changing the amount from $15,303,429 to $16,196,764. supervisor chu: thank you. i believe we have a representative from dpw. >> good morning. program manager for the laguna honda hospital replacement program. you have a resolution requesting approval for the modification of the services agreement. our last modification provided for services through the anticipated completion of the new buildings at laguna honda. these were substantially completed during 2010 and

approved for occupancy by the office of statewide health, planning, and development in november 2010. the facility is now occupied since december. this modification now provides for services for the next phase of work, completion of the remodel of the wing of the existing facility. that remodel, which includes provision of seismic upgrades as well as electrical and mechanical and other improvements. this is anticipated -- this phase of the work is anticipated to be complete in 2012, whereupon the program will then undertake final site of fruit -- improvements and abatement and demolition of wings. i'm happy to answer any questions you may have. supervisor chu: thank you. mr. rose. >> as we point out on page four of our report under fiscal impacts, this modification of $893,000 would increase the not to exceed amount of this existing contract from $15.3

million to $16.2 million, about a 5.8% increase. i would point out that the existing agreement was previously awarded based on a competitive rfp process. although the original award of the contract was $601,000 and now the new not to exceed amount, if you approve this, it hundred $93,000 modification, would result in a total not to exceed amount of approximately $16.2 million. mr. thomas notes that the significant increases occur because the agreement was negotiated in stages. where the agreement was modified annually based on the work plan for the particular year involved, but we recommend that you approve this resolution. supervisor chu: thank you very much. supervisor kim: i just have two questions for dpw.

actually, my question is just in reference to our budget and legislative analyst's report. just wanted to hear from dpw in terms of the rationale for increasing -- negotiating the increase rather than doing a competitive rfp process. >> as was mentioned, the intent was to have a consistent and continuous presence of particular positions, specifically, the firm has provided us with cost estimation with schedulers as well as with engineering support and inspection support. specifically, we have provided inspectors of record, which, when the state approves an inspector of record to be assigned to a program inspector, they have continuous inspection for the life of that program. the lion's share of this contract has been for supplying

additional inspectors of record for the program. there have been three specific inspectors provided for this job. supervisor kim: thank you. also, the source of funding for this additional increase -- was that budgeted within a $584 million in the table two, sources of funding for the replacement program? >> yes. supervisor kim: there was a budgeted amount that was not put into concrete -- in the contract in case of an increase? >> correct. there was an overall expectation of professional services within our budget that was to be distributed amongst master architect, city support staff as well as consultants supporting cm services. supervisor chu: thank you. we have no further questions from the committee, why don't we go to public comment? are there members of the public that wish to speak on this item? seeing none, public comment is closed.

do we have a motion to send this item out with recommendation? ok, we do have that motion and a second, so we can do that without objection. item three please. >> item 3, resolution declaring the intent of the city and county of san francisco to reimburse certain expenditures from proceeds of future bonded indebtedness, authorizing the director of the mayor's office of housing to submit an application and related documents to california debt limit allocation committee to permit issuance of residential mortgage revenue bonds in an aggregate it's about not to exceed $8,100,000 for pell street apartments. supervisor chu: thank you very much. the sponsor would like to say a few words. supervisor mirkarimi: this resolution authorizes the mayor's office of housing to apply for the california debt limit allocation.

the target population of the project on fell street is for families at 50% and 60% of the area median income. it is currently home to 207 low- income residents with an average tenure of 11 years. the building population includes 28 children and 62 seniors. average occupancy is 99%. the target population will not change as a result of the project, and current residents will remain in their units during and after the rehabilitation process. the rehabilitation will be green, including the installation of portable tape and/or solar thermic systems, replacing the elements with more environmentally conscious alternative materials. supervisor chu: thank you. >> good morning, the mayor's

office of housing. we request your authorization to apply to the california debt limit allocation committee. these are bonds that will be repaid from revenue from the project itself, and the city is not responsible for repayment of these bonds. it is true conduit financing. the -- we will be back, should we get an allocation in july, for the fourth authorization tax. supervisor chu: thank you very much. for this item, there is no budget analyst report because there is not a general fund impact on this piece of legislation. if we do not have further comments, why don't we open this item up for public comment? are there any members of the public who wish to speak on item 3? seeing none, public comment is closed. supervisor kim: motion to move forward with positive recommendation. supervisor chu: we have a motion to send the item forward with recommendations, and we can do that without objection. thank you very much.

can we call items four, five, and six, please? >> item four, resolution approving the fiscal year 2011- 2012 emergency shelter grants program and authorizing the mayor on behalf of the city and county of sentences go to apply for, accept, and expand the city's fiscal year 2011-2012 emergency shelter grants program in thailand from the u.s. department of housing and urban development in the amount of $1,253,445 and to expand reprogram funds in the amount of $124,000. item five, resolution approving fiscal year 2011-2012 community development block grant program, authorizing the mayor on behalf of the city and county of san francisco to apply for, accept, and expend the city's fiscal year 2011-2012 community development block grant program in thailand from the department of housing and urban development in the amount of $18,583,517 and to expand program income and reprogram funds in the about

$1,966,471. item six, resolution approving the fiscal year 2011-2012 home investment partnership program and authorizing the mayor on behalf of the city and county of said it is good to apply for, accept, and expand the city's fiscal year 2011-2012 whole program entitlement from the u.s. arm of housing and urban development in the amount of $7,576,727 and to expand program income in the amount of $430,000. supervisor chu: thank you. we have two representatives on this item. >> good morning, supervisors. director of community development for the mayor's office of housing. we have in front of you three resolutions. we come to you on an annual basis to ask for the approval for the acceptance and expenditure of our community development block grant funds, emergency shelter funds, and home funds. you see in the attachment to your materials the list of community-based organizations

for which these funds are intended. as you recall, our office, along with the office of economic and workforce development, met with you earlier this year to present what was then a draft allocation reflecting a much more significant cut that was actually received at that point. the house had proposed a 62.5% cut. we tentatively went forward with the 30% cut allocation. when congress finally revised their budget, the final cut was 16.54% for the community development block grant program. the emergency shelter grant program actually received approximately a 35% increase, so we were able to offset some of the decreases in cdbg by moving some of our grantees that would be eligible to receive esg funds over into that pot. this is the culmination of a long process, starting off in

december when community-based organizations submitted proposals for the competitive review process. those proposals were reviewed by the departments. the initial recommendations were issued in march after review by our committee on community development. as you recall, that committee has been restructured to reflect up with its by both the mayor and the board of supervisors. the committee first submitted the set of recommendations at a 30% level. when we learned that congress was probably going to not significantly decrease allocations, we presented the committee with a 20% allocation by moving some of the organizations that we have cut back into the portfolio and decreasing some of the reductions we have previously made. as i think i indicated to your offices earlier, we were asked

by the committee to not make simple across-the-board reductions but instead to make strategic reductions and increases that reflected our ability to best serve the neediest of the population. i think that when you look at what we chose to decrease and what we chose to replace, we did try to preserve those services for homeless residents, for victims of domestic violence. we also chose to focus our services in areas that would avoid duplication with other departments. we have been an active participant in the ongoing cbo task force that has been bringing together representatives of networks of cbo's in an attempt to best align our priorities with those of the of the department's. you can see that we have been focusing in the areas of -- in terms of work force, economic

development, housing development, financial literacy, transitional age youth services, homeless services, domestic violence services, and general community centers. we feel that this portfolio, while it was a difficult decision to eliminate some organizations, and i think i presented you with the spreadsheet that shows we did have to make some very difficult decisions -- this was the first year in which we had to propose the defunding of organizations that were high performers. we have never had to do that in the past, but this year, with that cut, we did have to make those tough decisions. in terms of fiscal year 2012 funding, to give you a preview of what it looks like for next year, having talked to our congressional representatives, we are concerned about fiscal year 2012. this year, the cdbg budget was increased.

the 62.5% cut proposed by congress would have brought it down to $1.5 million. in the last meeting with one of the minority staff representatives from the house, he did state that he sees that cdbg for fiscal year 2012 could be proposed to be reduced all the way down to $1.25 billion. while we did not get as drastic a cut as we had thought this year, it is still on the chopping block. it is still seen as a very vulnerable element. we are also in the difficult position of competing for other worthwhile elements. for example, the section 8 program is also under attack, so it will be a difficult balance hud to determine where to cut next year. overall, that is the portfolio we are asking you to go forward with. we plan to present this draft

action plan on monday may 16. when we get the final numbers, we will ask you to comeback to the full board. we anticipate there will be virtually no change, but the full board vote, instead of going forward next week, will probably be at the end of may or early june when we get the official numbers. we are starting to work with our community based organizations as soon as possible so we can get them to contract by july 1. it is a tight time frame because of congress oppose the delay in the budget, but we want to make sure there are no service gaps. that is an overview of the process and what you have in front of you. i'm glad to answer any questions if you have any. supervisor chu: thank you. quick question with regards to the grants. you talked about this year the cuts were not as severe as originally was anticipated, but that in and out year, it could be reduced potentially even further. i just wonder what is the

difference in your fiscal year? i know that our local fiscal year begins july 1. the federal fiscal year is different than ours. when you do these grants, what time is covered? >> what was just recently voted on in congress back in april was the final budget for congress's fiscal year 2011. their fiscal year 2011 budget is what binds us for our 2011-2012 budget. their fiscal year 2011-2012 budget, which they are beginning to discuss now, would be coming to us for services that would start on july 1, 2012. that is the calendar system. it is offset by a few months. supervisor chu: thank you. it looked like you had anticipated roughly about $18.6 million coming from cdbg funds, recruitment -- reprogramming

previous year funds that were not extended, and then there was $1.53 million in program income. i'm not familiar with what that is. >> on the program income side, that is usually income that is generated from revenues from, for example, properties that are sold -- i actually have the list here. here we have program income generated from loan repayments, from the small business loan program, from loan repayments from economic development, programs that are administered through the redevelopment agency. for reprogram dollars, that $400,000-plus, from a combination of grants that for one reason or another do not actually come to fruition.

for example in this past year, there was a capital grant for a grocery store in the tenderloin for $200,000 because they were not able to locate that site. we recapture those dollars and put them out again for the same program and wanted to make sure you have the opportunities to see how those dollars would be used. supervisor chu: thank you. why don't we go to public comment on this item? these three items do not have a budget analyst report associated with them. >> good morning, supervisors. i am program director at central city hospitality house. i wanted to ask for your support for the funding and also to thank you for the hospitality house. we provide our shelter program and our employment services are funded out of this funding, but more importantly than that, i wanted to ask your support for advocacy efforts for ongoing

funding. it even this year we're having to make terrible cuts to programs that are highly performing. that is a pretty sad picture. i know in the past, the board has authorized a resolution for advocacy efforts, so i just asked various support of that as we move forward because they think that would be really important for next year. supervisor chu: thank you. next speaker please. >> good morning, members of the board of supervisors. i am from asian-pacific islander legal outrage. i want to first acknowledge the moh staff and the citizens committee for their hard work. we know this is a financially challenging time, and we all have a difficult task in balancing the budget and retaining important services. while we would like to express our appreciation for restoring our funds, which would enable us to continue our services city- wide, specifically to the most

marginalized population, we also want you to know that we could not do this without our partners such as asian women shelter, cameron house, self-help for elderly and many more groups. the word collaboration has been thrown around the city, that we need to collaborate. the fact of the matter is that true collaboration takes a lot of work and some of us have been doing this for the last 20 years, not because it is a trend, but because it is necessary and we cannot afford not to do so. we do not have the luxury to be specialists. we are challenged every day to figure out how to work within our means and how to do it effectively. that is the duty of the city. we need to remember that while we provide deliverable goals and measurable outcomes, and that is a visible and tangible consideration, our long standing collaboration built on trust and common interest for the well- being of the community and our clients. to that end, i would like to urge the city to demonstrate

strong stewardship by continuing to seek and support and maintain efforts for those who have also been denied and to value holistic approach in making our community whole. thank you. supervisor chu: thank you. i'm going to call the rest of the speaker cards, and i apologize in advance if i incorrectly stated -- say. [reading names] >> good morning, supervisors. this is to thank the mayor's office of housing, in particular, the group particularcdbg -- the group of cdbg, brian, and luisa, who had a difficult time this year.

they reinstated some of our brands. i want to say that this is not a big amount. we are able not only to allow homeless people to contribute to the community but also be part of our neighborhood. and we need to really find to keep fully -- to keep hold the funds for next year. thank you. >> i am just filing a speaker card, so i do not know. good morning, members of the board of supervisors, there's office, and everybody in here. i worked in the community youth center as the project manager. i wanted to express my appreciation for the citizens advisory committee staff for really engaging the community and all the community-based organizations to really get their idea of what is important in terms of servicing our youth and families. i want to thank brian for his

leadership. for all these years, he has been a community activist, putting community first. second, i want to really thank the department for understanding the needs for a population of traditional asian youth. their understanding of financial literacy and the importance of education in the future. on the other hand, it is also about the department's full understanding of the needs for the asian-pacific islander population, who are often an underserved population. there may be stereotyping that plays a part into the spending process, so i want to thank the department for their understanding. for us, it is definitely our transitional aged youth programs that have helped. also, with the expansion into the bay view, especially with the u.s. leadership and

development program that will be starting in july, that is very important to us to have the leverage of funding to help us to promote racial harmony. when we in the city and state -- right now, sometimes our educational schools and institutions become pipelines for the prison complex, that is unacceptable. we need to start focusing on the future of our youth and put our money where our mouth is, so i want to thank you and urge the supervisors to support the recommendation from the committee. supervisor chu: thank you. next speaker please. other members wish to speak on these items, please line up in the center aisle. >> good morning, supervisors. i am representing asian women's shelter. i want to express our deep gratitude to the mayor's office and housing for their partnership and for continuing to recognize and understand how important our services are for immigrant modeling will u