tv [untitled] June 19, 2011 10:00am-10:30am PDT
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supervisor chu: good morning peter i am joined by supervisor mirkarimi, supervisor cohen, supervisor renner, and supervisor chiu. the clerk is victor young. we have members from sfgtv here. do you have any announcements? >> yes, please turn off all cell phones. if you wish to speak during public comment, turned in a speaker card to myself. if you present documents to the committee, please provide a document to the clerk. items from today will appear in the board of supervisors agenda on june 21, 2011, unless otherwise stated.
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supervisor chu: thank you very much. call item one. >> and to consider release of reserved funds for the supervisors in the amount of $34,515 for the temporary relocation of the board of supervisors meetings. >> madam chair and members of the budget and finance committee, i am the deputy director of administration, clerk of the board. on february 2, a hearing was held at the budget and finance committee. placed on committee reserves, funds in the amount of $51,054, pending additional details and the temporary relocation. based on a new quote and estimates for media services, the revised costs or between $34,515 for poorer meetings -- for four meetings. san francisco government tv
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slide, please. >> can we have the overhead display, please? thank you. >> the budget and finance committee directed the clerk of the board to temporarily relocate to room 416. if room 416 proves to be an adequate, then the north light south courts would be utilized and the cost of the relocation would be $34,515 that would be incurred. although the north and white south courts are not available on all of the meeting dates, and the event occurs on august 9, and for the regularly scheduled meetings of september 6 and october 4, room 416 we need to be used at no additional costs. therefore, the clerk of the board is requesting the committee to release the funds from reserve of $34,515. i am available to answer any
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questions. thank you for your consideration. supervisor chu: thank you very much. we do not have a report with this item. this item did come before this previously, and we talked in length about the potential locations for the temporary meetings, or the temporary locations for the meetings. at that time, we have not released the reserves. we had to come forward separately with the actual request of the release of reserved funds. that is what this item is. before we take action, why don't we go to public comment. are there any members of the public who wish to speak on this item? >> supervisors, my name is francisco da costa. as no, i was present at that hearing, and i would like the controller and those who are involved with this item to pay careful attention. first and foremost, i have
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qualified experience as an ada program director with the national parks service, the department of interior, that has the highest standards regarding this issue. the way i look at it is that at this time, it is a waste of money. we're putting too much emphasis on the ramp, and in doing so, we're not even revealing the truth. i can tell you that expenses are more than at the 51,707 $4, because this whole area will be torn up, and the amount of money that is going to go into putting the electrical stuff in and upgrading has not been included in this amount. so really, you're not telling us the truth. we would like to know if these meetings are shifted to the other venues, exactly what is going to happen here.
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if you're just going to be dealing with the ramp or if you will also be dealing with the upgrading and what has been done in this area and exactly how much money it is going to cost. again, people are suffering. people will talk about health and other stuff. we do not need to spend this type of money when anybody with a wheelchair, and i am physically challenged, can go up those ramps and conduct business in a very excellent manner. thank you very much. supervisor chu: thank you. are there any other members of the public who wish to speak on item number one? seeing none, public comment is closed. colleagues, we have an item before us, a request to release reserves. we have a motion to release. -- the reserves made by supervisor mirkarimi. the instructions to the clerk was to try room at four hundred 16, and if we can continue, we will do that to save money. if not, will take the further
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option to go to the night courts. with that motion, can we take that without objection? ok, thank you. >> thank you. supervisor chu: would you call items number two through six, please. >> item number two, interim annual salary ordinance and positions for the annual budget an appropriation ordinance for the fiscal year ending june 30, 2012 and june 30, 2013, establishing these positions, in enumerating and including all positions created by charter or state law for which compensation are paid from city and county funds and appropriated in the annual appropriation ordinance. number 3, interim consolidated budget an annual appropriation ordinance for all expenditures for the city and county of san francisco for fiscal year ending june 30, 2012, and for fiscal year ending june 30, 2012 and june 30, 2013, for the airport commission, port
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commission, and public utilities commission. item four, antrum budget of the redevelopment agency this city and county of san francisco for fy 2011 and fy 2012. 5, approving the interim budget of the treasure island development of 34 fy 2011 and fy 2012. item number six, hearing to receive a report from the comptroller's office on the revenue letter of a discussion of the mayor's fiscal year 2011-2012 proposed budget. supervisor chu: thank you very much. these are a number of items that are going with the budget. number 6 is a hearing to provide the mayor's budget office the opportunity to give us an overview about the budget that has been proposed. it includes the opportunity for the controller to speak about their revenue letter. in addition to that, with four other items which comprise the interim budget. as you know, our fiscal year ends june and 30. we typically do not end our budget process and have it signed into effect until august. so we have one month, which is
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>> good morning, supervisors. i am the budget director. sorry for the delay. we are working through the mechanics. i will just take you at a very high level through a summary of what is in the mayor's proposed budget. i think a lot of this, you are familiar with, from previous discussions at this committee but also from additional discussions that we have been having over the course of the
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last couple of weeks. as you know, the fiscal year 2011-2012 budget, at the joint report, we had a $306 million projected deficit. this is the latest in multiple years' worth of projected budget deficits. is this overhead working? >> i think i got it. again, this is the latest in several years worth of significant budget deficits and driven by the challenges we are seeing in the economy.
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we had a $306 million projected general fund bang deficit, and that is driven by a number of things. we have city-wide high rate of growth in our employee costs, driven primarily by fringe benefits, including pension and health care benefits. we also built into our deficit the loss of a significant number of state and federal revenues that we have used to balance over the past couple of years, primarily in health and human services, that are leaving our budget. they are offsetting the modest recovery that we are seeing in our economy and local tax revenues. so the mayor had asked, in the winter of this year, in preparation of the budget department, to propose to
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increase in reductions to general fund support, and an additional 10% contingency. and those are significant targets that we issue. just in terms of the very highest level of how we balanced, this pie chart shows you the balance between revenues and expenditures and the solutions that were used to close the $306 million budget deficit. a significant portion of the budget was closed with revenues. some of that is due to new initiatives. a significant amount of it is due to improving conditions in the economy. both in the current year and in -- projected for next year's budget, and about 56% of the solutions are on the expenditure side. just to walk you through some of the high level summary of how we balanced -- these numbers are
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compared to the joint report, and they represent the total incremental general fund that we used to balance the budget, compared to the joint report. the first line is our current year expenditure savings and revenue increases. we have had some good news in the current year, which you are going to hear from the comptroller about, on the revenue side, and our property transfer taxes, our payroll taxes, but otherwise, just general, modest revenue strength, as we are starting to see some signs of life in the local economy. the second line on capital budget reductions, that is, as anticipated in our five-year financial plan, we had proposed -- and in the final adopted plan, recommended resetting the
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level of recommended capital spending, and that will be implemented in the next version of the capital plan. but this involves reducing the projected cash general fund spending on capital project by about $35 million. that is projected to, again, reset the baseline and those expenditures will grow again over the course of the next five years, until we catch back up and are once again spending at the level anticipated in the capital plan. general fund revenues, again, these are revenue updates. but for the budget year, rather than the current year. the comptroller will talk through that in the revenue letter discussion. debt service restructuring, again, this is something we discussed in the five-year financial plan. the comptroller's office has been spending a significant amount of time looking at our
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debt service projections, thinking about where we can restructure that, refinance debt, change our payment schedules to smooth out those payments. that has resulted in a significant level of savings. in the current year, the biggest part is the decision not to prepay some debt service on bonds. the next line, this is an inflationary increase. this is a projected increase to keep pace with inflation and contracts, materials, and supplies. we have not funded that increase in the budget. the biggest impact of that, i would argue, the short term, is on our cbo, partners who will not receive an inflationary increase. i believe this is the fourth year that we have not provided that increase. again, that is discussed as part
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of the five-year financial plan. prop h trigger, a plan deferral of 25% of our obligations. also anticipated in the five- year financial plan. on the state budget reserve, i think this is something that is going to be an active discussion over the next couple of months. it looks like the state is moving down a path where we could start to get a little bit of certainty about what its budget is going to look like. we had originally anticipated in our deficit projection holding a $30 million general fund reserves against state reductions. in this budget submission, we reduced that to $15 million, leaving as $15 million worth of general fund that we can use to balance the budget. the rationale for doing that is that the mayor, along with several members of the board of supervisors, are proposing a
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sales-tax proposal that would go into affect that -- if the state allows its tax rate to drop. at the sales tax rate drops 1% at the state level, this proposal would impose a half cent sales-tax locally, so that we would still see a half cent drop in sales tax rate. but that would provide as a backstop against the actions that the state is going to take to balance this budget. the value of that in fy 2011- 2012 is about it be million dollars, so that has allowed us to take on some of our general fund reserve and use the sales tax backstop as a reserve against the cuts. other items on this list are relatively small, so i will not go into detail, but you can feel free to ask questions about those. in terms of department
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reductions and revenues, this is a list of some of our bigger departments and what the value of their share of the balancing plan is. at the public health department, our largest department, in terms of total size, and as always, they're asked to play a significant role in helping balance the general fund budget. of this $31.7 million, a significant portion of that is revenue, federal revenue, as part of a new program associated with planning for health care reform. we have been able to leverage those revenues to offset a general fund that also includes a planned expansion. so some of that revenue is used for expenditures to expand our capacity at clinics. and to prepare for new requirements imposed as part of the waiver. additionally, within the health
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department, you heard last night about some expenditure reductions. those include about $3.4 million of reductions to non- residential mental health and substance abuse services. it is dramatically down from was it had been originally contemplated in the department's 20% proposal, but there are some expenditure reductions remaining. lastly, this figure also includes a proposal to change the way that we use staff security at the hospitals, which would allow us to reassign sheriff's deputies back to the jail, a savings of2 about of million at the health -- a savings of about $2 million. at the police department, this is another one of our largest general fund departments and a very significant contribution to how we balance the general fund deficit.
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there are a couple of key parts in this number. the two largest our decision to not fund additional academy class is for the coming year. so there are no academy class is -- classes anticipated for the budget in the coming year. that saves as the cost of administering those classes, and it will result in some salary savings within the department, as we have retirement and attrition. of course, the flat side of this is that it means as officers retire, our ranks are thinning of the police department. but that is about $11 million worth of savings included in the budget. additionally, this figure includes a request that we have made to employees at the police department to defer or renegotiate a wage that is contemplated -- wage increases contemplated in the contract.
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that is about another $10 million that is assumed in the mayor's budget, and we're optimistic and working closely with our employee organizations to talk through how we can make that work. the human services agency, this is also a combination of revenues and expenditure reductions. i think there are a couple of pieces that are significant in this $14 million value that are noncontroversial and some that are tougher decisions to make. the department has been able to identify some savings in its operations and some revenues that are associated with drawing down federal revenues as part of the safety net programs. but there are some remaining expenditure reductions in programs that i am sure you have been and will be hearing about, including some remaining
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reductions in the department of aging and adult services, some of our homeless housing contracts, and other expenditure reductions. the fire department, two components to this number of note. number one, this assumes that the continued closure of one fire station, closed due to renovations. that is about a $2.5 million savings that is anticipated to come back on line in the following fiscal year. that is a one-time savings. that is a significant dollar value. additionally, we have also assumed that a planned wage increase for firefighters and will not occur in this budget. on the other items on this list, i will not go into detail on all of them. those four departments at the top are significant share of our general fund budget. that is why they have a
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significant share of the solutions. again, if you have questions or particular is that you would like to discuss about any of these departments, more than happy to do so now, and of course we will have them starting on monday, coming to talk in detail with you before this committee. just a note about how this budget submission it lines up with our five-year financial plan, which we have been talking about at this committee over the last month and a half and which was recently finally approved by the board of supervisors. we are, i would say, pretty close to where we had planned to be in the five-year financial plan. i think that is partially because we designed the plan with a sense of how we would be balancing the budget, but i think that is good news and that we're making a real effort to try to make that plan a
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document that is going to guide budget decisions in the this year and in future years. the biggest of variations, compared to what we had adopted in the plan, is the last item on going, department revenues and savings. we had anticipated that we would need about $63 million of those initiatives, and the actual budget includes about $53 million. that category, expenditures savings, was kind of the catch- all for the remaining reductions that we would need to get our budget balanced. and we are able to avoid some of those reductions through the third and fourth categories, some additional savings on capital spending and debt restructuring. that is primarily in the debt restructuring category and on wage and benefit expenditures. all-in-all, i think we have made
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a real effort to try to submit a budget that is consistent with the five-year financial plan, and i hope that will be the trend and the guiding principle that we use over the next five years to try to follow that road map that was adopted by the board. just in terms of where we are, we have got a $6.8 billion budget. as has been the case in the past, a little less than half of that is in our general fund. a little bit more than half is outside the general fund. the total budget is about $266 million increase, compared to the current year. one of the things that we have discussed quite a bit here and elsewhere is why the budget is growing when we are also cutting, and i think that that is both expected but also a
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theme of some of the analysis that we have been doing about our city's finances over the past couple of years. the trend that we have seen in the five-year financial plan is that we have our costs outpacing our revenues. so we can anticipate this to occur into the future as our budget is growing and our revenues are recovering. we're still going to have a lot of tension in the budget, and we're going to have continuing budget deficits because our expenditure growth so far outpaces our revenues. but other pieces that are included in the growth, there is a little bit of a list here, but a couple of notable items. the health department's budget is increasing by over $100 million. there are a couple of big pieces to that. the two largest are, as i mentioned before, there are some new expenditures associated with the new medical waiver that requires us to increase capacity at the clinics and elsewhere in
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order to prepare for federal health care reform. additionally, there is about $40 million worth of expenditures that are associated with transfers to the federal government that are then matched with federal dollars that come back to us in revenue. public utilities budget is increasing by about $62 million as associated with their infrastructure investments. that is also planned in the five-year financial plan. then we also have about $30 million at other non-general fund departments of growth. a couple of notable pieces, the department of building inspection's budget is starting to recover after the last few dismal years, and that is a sign of something good happening in the economy. and lastly, the airport's budget has grown as part of the opening of terminal two and the first
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before it -- the airport the budget has grown as part of the opening of terminal two. in terms of positions, we have a slight increase in the number of positions compared to last year. however, looking back historically, we're still at a very low position cannot compared to where the city has been for the past decade or so. of our 164 fte increase in the budget compared to the current year, the bulk of that is in a couple of categories. it is in a non-general fund departments. the puc and the airport are the two larger increases associated with the capital investment and the opening of terminal two. we also have a significant increase of the health department associated with the medical waiver. overall, we're still at a relatively lean tt
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