they're enthusiastic about this program. they have a desire to teach. and as evidenced by the many letters that are written by members of the program, what makes the program is successful and has people coming back time and time again and has graduates referring to their neighbors and co-workers that this is the great program. it is a free program, and we feel this expenditure is of vital to the continued success and viability of the program. so i strongly encourage you to disagree with this policy recommendation. supervisor chu: thank you, chief. supervisor wiener. supervisor wiener: thank you. i will not repeat what she said, but i agree with it and i am prepared to make a motion on the fire department budget. supervisor chu: thank you. supervisor mirkarimi. supervisor mirkarimi: i will make the motion. it is to accept the agreed upon cuts but to reject the proposed cut to nert.

>> second. >supervisor chu: first, let's go to the report. >> as stated, the agreed upon recommended reductions are $713,389, and our policy recommendation is on page 19. supervisor chu: thank you. just a quick question for the mayor's budget office. a large part of the budget hangs in the balance in terms of where we are with the negotiated mou's. do you have an update on that? >> absolutely. gosset the mayor's budget director. as of yesterday, we have a tentative agreement, which is consistent with the mayor's budget submission. it still has to be ratified by the members of the police officers association, the firefighters' union. however, it is a very significant concession that we have agreed to.

it tentatively. and it will keep our budget in balance. there'll be a few administrative changes we will need to make to implement it, but is absolutely manageable. i just want to thank the police officers association, the firefighters' union for their agreement. they stepped up again to provide a significant help to the city to help us balance our budget. i think we just need to be cognizant of the importance of that and what it has done for us to be able to protect services in this budget. supervisor chu: thank you. supervisor wiener: that is really good news. if i could just ask you -- is it -- i know that the 3% raise is going forward, compensated by a corresponding 3% increase by the firefighters and police to their pensions.

it is that 100% cost neutral, given that the 3% salary increase also brings benefit costs? >> it is a great question, and we should have dhr in here to walk you through the specifics of the agreement. but the big picture is that it is a very close to cost neutral. as you point out, there is a slight difference, for exactly that reason, that we had initially anticipated that it would be a deferral of the wage. instead, it is a pension contribution pick up of an equivalent value, so there are some slight differences as to how it is implemented in terms of how we calculate the impact on overtime rates, premiums, that sort of thing. so there are some small differences, but they are administratively manageable. we will be working with the police and fire department to

manage those changes. it is essentially equivalent to what we had some guy in the budget and will not affect our ability to continue forward. it will not affect the bottom line for the budget for this committee. and we are in balance. the valley of the concession is essentially equivalent to the mayor's budget. >> thank you. i would like to echo what was said from the mayor's budget office and acknowledge the men and women of local 798 and the san francisco fire department and the men and women of the police officers association and to protect our streets each and every day. obviously, these are dangerous jobs. these were close contracts. once again, the members understood that something needed to be done, and they needed to be part of this solution. i know that in my close to eight years working as chief, every time speaking for local 798,

they have been at the table wanting to be part of that solution. i want to acknowledge them, as well as dhr and the mayor's office for the hard work they put in to get to this resolution or near resolution. supervisor chu: thank you. supervisor wiener, did you have further comments? supervisor wiener: wasn't there another step increase scheduled for january? wasn't it a two-part increase with another one coming in in january or am i wrong about that? >> there are slightly different schedules for the poa and the firefighters. do you know what the schedule is? >> my understanding is firefighters, and this is all tentative, but from what i have been told, firefighters would do a 4% increase on july 1. the 3% will be taken with the

offset being 3% contribution into the pension at that time. that 1% will roll to january 2012. poa would do a 2% increase in its january, and that will roll 90 days to april 1. >> and we will have a summary sheet. the dhr is working on it as we speak, outlining the specifics of the agreement. that will be in your hands very shortly. supervisor chu: thank you. i also want to express my gratitude for both the poa and local 798 for the work they have done so far. i know it has not yet been ratified by the membership, but getting to this tentative agreement is a big deal. so thank you to the leadership. supervisor mirkarimi: thank you. i think, probably on behalf of all of us, you speak for us in our gratitude for both local cahow 798 and the police -- for

but local 798 and vdot poa. on nert, i support the resolution to make sure the funding to be not cut. i think nert is a dynamic program, one that deserves the funding, adequate funding. i think the proposal to cut it would subvert its potential in its major contribution. a few years ago when i was on the budget committee, and as i have been every year that i have been on the board, there had been a chance to cut nert then, and it was in its youngest days back then. there was resistance and then. but over the last quarter years, there has been great demonstration of how effective nert is. san francisco depends on this infrastructure for psittacine brigade, for any man-made and natural disaster. it is -- san francisco depends on this infrastructure for citizen brigade.

so, enthusiastically, if it had not been mentioned, i would have motion did. i think we should restore the funding. supervisor chu: thank you. ok, supervisor i to -- chiu. supervisor chiu: i want to echo what my colleagues have said. it has been a tough month, and i appreciate all the work that you have done to make sure that we're all continuing to bear the burdens of this budget. i appreciate the fact that our budget analysts and your office have been able to come to an agreement on the budget. that is good and appropriate. i also want to echo my colleagues as far as support of the nert program. i often wished there are other ways for san francisco residence is to take part in how we keep and protect our city, whether it be working with our rec and park

department, working with our libraries, and working with the first responders. we have seen how valuable it is to make sure that our entire city is prepared for the next earthquake, for the next five years, for the next disasters. i think this program is incredibly important, and we need to nurture it and protected. again, happy to support that. supervisor chu: thank you. so we do have -- we have gone to the budget analyst report, in addition to the chief's comments. thank you to the mayor's budget office for providing the update with regard to the mou conversation. we have a motion to accept the budget analyst recommendation but cannot accept the policy recommendation. do we need a roll call on that item? ok, so we will take that motion without objection. >> thank you, supervisors. supervisor chu: the next debarment is the emergency management. -- the next department is the department of emergency

management. >> chairwoman, members of the budget and finance committee, i am the director of emergency management. i am happy to report that we have worked over the last week very closely with the budget analyst and have come to agreement on the cuts before you today. i would like to especially thank mr. rose and ian hart, our budget analyst, for all the work they have done, and certainly the mayor's office. of course, the comptroller -- controller's office through this entire process. supervisor chu: thank you. why don't we go to -- [no audio] please stand by

to cut the department is in agreement with closing out the in balance for projects and in agreement with the cuts, correct? >> yes, we are. supervisor chu: given that we are in agreement with the budget analyst recommendations from the department, can we take is that without objection? thank you. >> thank you very much. supervisor chu: our next. and it is the district attorney. -- our next department is the district attorney. >> good morning. we have worked out our differences with the budget analyst and are in full agreement, so we are ready to move forward. supervisor chu: ok. to the budget analyst. >> madam chair, members, the

agreed upon recommended reductions, these are general fund reductions, $295,101. as you know, we also recommended the one-time additional general fund revenues of $1,025,000, anticipated to be received by the district attorney's office. the total general fund savings for your consideration are $1,320,101. supervisor chu: thank you. the department is in agreement with the ongoing cuts for the department, in addition to the settlement dollars. >> yes, we are. supervisor chu: ok. colleagues, given that there is agreement, can we take those cuts without objection? ok, thank you. >> thank you very much. to go our next department is the adult probation department. -- supervisor chu: our next department is the adult probation department. >> good morning.

i am the chief adult probation officer. i am pleased to report that we have worked with mr. rose, and public to thank he and his staff, and i would also like to thank the mayor's budget staff. we have come to agreement on the proposed reduction. >> and that includes the project close out? >> yes, it does. supervisor chu: thank you. but an analyst. >> the agreed upon a general fund recommendations are 100 and thousand 592. there is also -- $110,592. total recommended reductions for general fund is a $111,800. supervisor chu: thank you. supervisor mirkarimi: i have a question. i know it is hard to anticipate,

but you have been one of the primary representatives in talking with the state on a prisoner realignment. in this budget that is before us, it is a little bit of an enigma as to what we can anticipate in terms of how to prepare for what might be coming down from the state, since the funding is supposed to escort the prisoners that come down. i am curious if any part of this budget is in anticipation of that infusion of inmate population? >> the current mayor's budget anticipates some funding for the sheriff's population for the anticipated increase. adult probations budget does not anticipate any. we do have cost estimates. we have a realignment plan that we have been crafting. fortunately, because we have been meeting so frequently and working with all the realignment partners, we will be prepared to come forward startin.

starting july 5, we will release a plan for public input on july 12. the funding specifics are blank for what we're going to put out publicly, because we're waiting to hear from the state. what i can tell you is that the revenue will not match what the anticipated expenditures are. i anticipate there could be upwards of a 50% in difference between the two figures. for adult probation, we anticipate a significant impact. we will have up to 700 realigned prisoners under our nauert post- custody release supervision. murder -- under our now post- custody police supervision. supervisor mirkarimi: ultimately, the adult probation is really the backstop in helping process and to manage these significant portion, if not everybody, that has spent realigned back to us.

since the state now has a green light by the governor to sign the budget and they're still waiting to see how funding is materialized based on tax extensions or whatever the funding mechanism is, are you anticipating a supplemental by the adult probation department come mid-year? >> yes, i anticipate a supplemental. the governor's budget has funded a realignment as it was originally intended. there is a slight difference in the vehicle license fee money. there's money for additional court security. there is separate set aside for public defender for representation. also, the district attorney's office. i have a recap relative to what is known right now and what is not known. there are several bills to be passed that will impact the nature in which we are managing the population. but bottom line is that we really think that the probation department will be the first apartment impacted. the reason being is, as of october 1 when this law becomes

effective, cdcr will release prisoners that are non-serious, non-a violent, but they have serious and violent prior convictions to our supervision. effective october 1, the court will begin changing their sentencing, but that will take a while for those court dates to come. so we know the estimated state's population is 412 immediately to us, and then building up to 700. supervisor mirkarimi: what would be your projected -- i know it is a guess right now, but what a supplemental would look like by adult probation? >> i anticipate we will be impacted to probably, when it is fully implemented, and it will only be a partial year, i would say probably $4 million to $5 million. supervisor mirkarimi: so it is literally 10% of your budget. ok. >> i am the mayor's budget

director. i would agree with everything that she said. our plan is, and we have been working with the probation department -- i think we all understand that the probation department is going to be one at the core parts of this realignment strategy, and they are really at the center of the changes that are going to happen, but operationally and financially. our goal is to, now that we actually had a state budget that is giving us some details, is to start getting the numbers ready, both for the probation department and for the other public safety departments and come to you with a plan and a funding proposal that would be part of the larger state budget discussion, where we make a determination about how we allocate out the state budget reserve and how we're going to implement some of the other proposals in the state budget. so we will fold that

conversation together and bring that to the board probably within the next couple of months. the timing is still a little bit uncertain, but this fall, to have bought the policy discussion and financial discussion about what the impacts are on operations. supervisor mirkarimi: now that some of the blanks are being filled in, because the state appears to be arriving at a budget resolution, there will be another meeting, and we have already hit -- already had two on this. we can begin to round out what we expect to win with the first infusion be? january or sooner? -- when will the first infusion be? >> likely, october 2. when they release on october 1, they released into our custody for probation supervision. the court commitments will take a little bit longer. one thing i would like to say is that as we're building this realignment plan, alternatives to sentencing will be key. so the judges are going to have

a core component on how the sheriff's budget and population is infected, as well as a probation. we have been working with the district attorney's office and public defender's office and having this conversation. part of the realignment plan will also be focused on creating these alternative sentences to try and mitigate a large impact to the shares population. supervisor mirkarimi: but there will be a risk assessment based on the population that is returning here. so the community that is also critical is the reentry community. >> absolutely. that is why we felt it was so important to get out in front of it as quickly as possible and to talk to the committee and to the reentry council. we will unveil a draft plan in terms of what the components consist of on a july 12 at a hearing. supervisor mirkarimi: thank you. supervisor chu: thank you for those questions. it is a good segue. i intended to ask the mayor's

budget office to provide an update on the state budget for us. perhaps he can let us know where there might be some questions and where we might have some clarity. >> absolutely, madam chair. mayor's budget director. it looks like there is an agreement on the state budget, but as always, the fact that items have been adopted it does not give us complete clarity on where things stand. my office, the departments are going through the proposal right now and trying to assess what the impact would be. i would say the two biggest pieces that are going to provide us some uncertainty are the proposal on redevelopment. right now, it looks like there will be a significant financial impact on the city as a result of the redevelopment proposal. there are a number outstanding legal questions about how that is actually going to be implemented.

it is probably going to take as a little while to comb through what that means for us. but it does look like the proposal is either we can allow our agency to be eliminated, or if we choose not to do so, we would be obligated to pay a significant sum to the state. it will have a financial impact on the city. i am confident it will take us a little while to sort out exactly what that means. the other part is realignment, and as we have just discussed, we will be working on finalizing our numbers for that item. there is still some uncertainty on exactly what the state budget will look like over the course of the next half a year or so. the governors and legislatures proposal includes an assumption of revenue. it includes an assumption about what will happen if those revenues are not realized. essentially, there is about $4

billion of new revenues as soon, and there are cuts that would be implemented if the revenue does not come in to certain trigger levels. those cuts would significantly affect some of the educational institutions, but there are also cuts that would affect the city government. depending on what kind of news we are seeing in the economy, there'll probably be some level of uncertainty about the impacts of the state budget on our local government program medically and financially over the course of the next half of the year -- programatically and financially over the course of the next half of year. supervisor chu: thank you. just to clarify, we have talked a lot about realignment. i know that supervisor mirkarimi will be calling that item to the public safety committee to have a better vetting of what that might mean. with regard to redevelopment, it

is intriguing what you have said. that the current proposal, as is laid out, is that potentially we have the ability to continue our redevelopment agency at the local level, but that would require a payout to the state in this year. >> that is correct. essentially, the original proposal, back in january of this year from the governor's office, was to eliminate redevelopment agencies and is essentially no longer have that option for local governments. the newer proposal, and again, there are significant outstanding legal and technical questions about how this thing will look and how it will be implemented, but essentially, the centerpiece of it is that local redevelopment agencies have the option of remaining in existence but would be required to make a payment to the state. the total value of that payment to the state is about $1.7

billion from each of the local redevelopment agencies. we are calculating the impact call on the final legislation and on what that will mean for san francisco. but it is probably in the $20 million to $30 million range. in future years, there would be an ongoing payment, but the ongoing payments would be at a lower level. there would be a one-time larger payment required by the city in the current fiscal year. and then that would drop down. there would be a one-time hit and then a smaller ongoing series of payments that will occur over the long term or in perpetuity. supervisor chu: conceptually, we would expect that if you wanted to maintain our redeveloper at agency, it is likely that san francisco would have to pay some kind of lump-sum payment, a onetime payment in this coming fiscal year, and perhaps an ongoing payment in years out

that will not be as large? >> that is correct. one of the issues that is going to prison for us financially is -- it will probably put some strain on us financially in the current year, meaning that the size of our reserve currently budgeted at $15 million is less than the total value of the payment for the current year. although, of course, we have a sales-tax measure submitted to the board which with add to that reserve. but that will put some strain on us in the budget year and fiscal year 2011-2012. but hopefully, depending on what else happens with every development agencies, that will be a one-time expenditure. a portion of that will be a one- time expenditure, rather than a large ongoing payment. so there would be a one-time impact to our budget in fiscal year 2011-2012. but it looks like the ongoing impact will be less than that.

supervisor chu: one final question one of the department coming up later on is the children and families commission. i know that part of the state plans originally had anticipated taking the number, or significant amount of the reserves, from first fives. is that off the table? >> the final budget proposal -- and they are not sleeping the balance from a first 5 at the level that was contemplated in the budget proposal that was vetoed by the governor a week or two ago. and it had been challenged in the court, and that with the governors logic, you did not want to include that in the budget given the legal uncertainty. so the impact on first five will be less than contemplated under previous budget proposals. supervisor chu: ok, thank you. we left off with the adult probation department

presentation. the department is in agreement. did we do the budget analyst response yet? we did, ok. colleagues, if we can, given that there is agreement to take the project closeout balance of $1,208 and also take the cuts worth $110,592. we can take that without objection? thank you. the next department is the asian art museum. >> good morning. we're pleased to confirm. asian art museum, chief operating officer and cfo. we are in agreement with mr. rose's office and are prepared to accept the $53,465 cut to our

general fund budget. the reason that we are able to take this cut is we are in an unusual situation, with several positions that are open. this cut really is reflective of the timescale for hiring those positions in the first several months of the year. with the caveat that we would hope to work with the mayor's office next year to restore funds sufficient to be able to cover the minimum staffing levels at the museum, that is the situation that we face and we are able to take a cut for the current year. we wish to thank the supervisors and mr. rose's office. supervisor chu: thank you. mr. rose. >> the agreed upon recommendations of $53,465, which are general fund reductions. supervisor chu: thank you. given that the department is in agreement, can we