to issue those in late november/early december. this is the first year we are issuing fees for all departments. that means there is even more of a need to look good on going solutions. we have to balance the second year, too. it will really be important that we think about ongoing solutions, and its departments come in with recommended savings and revenues -- if departments come in with recommended savings and revenues. supervisor chu: what will be different this year is the general fund and develop project apartments will come in with a balanced -- will be different this year is the general fund and developmental departments will come in with a balanced two-year budget. >> correct. including potentially limits on

our use of one-time revenues, a position of a fixed budget for enterprise departments where we would not open up the budget and the second year and less revenue and expenses vary by a certain amount, and caught fire limitations on our ability to issue debt cop's and other revenue bonds. again, 27 labor agreements expiring june 30. labor agreements will take place in the spring. obviously that will really factor into the budget balancing process, and our cbo/stakeholder process was very successful last year is already underway, and we have already convene the meeting of that group of stakeholders that will be ongoing throughout the next year. the bottom line, i think, as far as the current year, cautiously optimistic.

we have said the vigorous, but we're seeing good news on local revenues. i am hopeful we will be able to get through this year without having to do a round of mid-year cuts, but it is by no means certain we will not have to do that. in any event, with the looming deficit next year, we may look to get current year savings in anticipation to help balance next year's budget. for example, we could issue targets that require departments to come in with a certain amount of their cut so that we achieve the savings over the next 18 months in what less of an impact on services and programs. projected deficits persist. costs are growing faster than our revenues. it is a fact we have to address, and we need to implement a five- year plan. and continue fiscal discipline. the november ballot will be critical. again, departmental reductions

seem certain a matter what happens in november and the labor negotiations. and then just some key dates that i will not go through. supervisor chu: thank you for the presentation. i know the mayor's budget office has already begun to have conversation with department heads about where their projections might be. at that time i felt it was important that this committee was briefed on what the outlook looks like for next year. i appreciate the presentation. i know you will continue to update us as we hear about any impacts we might have in the current year. why don't we open this item up for public comment if there are no other questions. any members of the public that would like to speak on this item, item number three? >> first and foremost, i would like to revise the person -- i think his first name is rick to

speak slowly. he was rattling too fast. over 300 items. people at home have to have an understanding, because this is our taxpayers' money. having said that, in all of our deliberations i would like you, because this is the first time i am meeting you. i have not met you before. i supported the person who was in your chair before and always asked him, like i am asking you, and at some point i will make that known again, that you have an important position. you have the ear of the mayor, and you need to represent the constituents of san francisco in a very compassionate manner. and i am saying that because the city is named after [inaudible] . we get a number of workers, city

workers who this number is thrown around, but again and again people say this is a moving target, and some say it is 33,000 temporary workers or whatever. so we, the taxpayers, need to know exactly what this number is. if we have a population of 816,000, and if we have only 33,000 city employees who are performing whatever types of works they are performing and getting over 125,000 on an average, we really want to know what is happening about this number, because it ties into what ever is said. for example, the board of supervisors at one point were paid 124,000. today they get over 160,000, plus benefits. i know i could go to the comptroller's office and get a book. i am not an economist, but i

know how to balance the budget. i could speak on the redevelopment grants and what ever, but i do not have sufficient time. i want you to do this on behalf of the people. you notice i did not address the people to that. thank you. supervisor chu: thank you. are there other members of the public that wish to speak on this item? seeing none, public comment is closed. and we continue this item to the call of the chair? item number four. >> item number four, ordinance are perpetrating $1.9 million children's fund designated contingency to the department of children, youth, and their families to a low california department of education title five contractors to provide subsidized child-care funding for low-income families in order to mitigate state cuts in 2011-

2012. for this item i know that supervisor kinm would have liked to have been here for this meeting but she is out of town. supe-- supervisor kim. >> i am machel rutherford, human services agency, program manager for family planning. i have been working to design how we would work these dollars out and support the providers that were severely impacted by state budget cuts last year. there were a number of child cut proposals on the table. the final cut that was taken, the state reduce the contractors by 11 percent signed, which was a really steep cut, and many of them were reeling from those cuts. -- the final cut that was taken,

the state reduce the contractors by 11%. so we did put out an application for funding, and we have 15 of the 30 contractors applied for funds. what you have before you is a request to provide -- to support the providers to help keep their classrooms open and teachers employees and maintain the slots for the families that otherwise will lose their care. if you have any questions, i would be happy to answer those. supervisor chu: any other for the presentation from the department? -- and the othey other further presentation from the department? >> there was over $6 million that was cut from the 30 contractors. of these you have the persian --

portion that is attributable to these contractors, so we did not make the funds available to the public agencies. it is really the contractors who really live hand to mouth trying to keep their doors open and slots in role for these families -- enrolled for these families. we have modeled a parallel process to what the state requires of the reimbursement rates and everything will be modeled after the state contracts, so it is just a separate replacing what the state was doing, keeping the same standards for income level feees for parents, and we're working with the state and modeling that practice so it is not as if -- we do not want to get our contractors in trouble with the state in terms of how they're being financed.

and this is approximately 200 slots. they get adjustment factors for whether it is full day/part day, whether the child is bilingual. this is an approximate number, but really what we are hearing is that this will make a huge difference for them in terms of maintaining their operations. supervisor chu: one of the items the budget analyst did report on was the number of slots we thought we would be losing and what we would be backfilling. it looked like there were 200 slots that we would be losing but restoring 196 lots. they analyst report also indicated we did not think that was going to be a service level reduction. could you explain that? --t the analyst's report also

indicated we did not think that was going to be a service level reduction. the other 15 contractors lost a lot more money than this reduction. for these contractors, some contractors have the ability to enroll private payers, so some of them are doing that. if you work in a very concentrated low-income neighborhood, that becomes not possible. it is different from contractor to contractor. we have been working around psa funding and head start sites the other half of the day, which is a good strategic use of our local dollars there. so depending on the contractor and their current sites, and a variety of factors, this is what

they applied for. so some of them are making different choices, but we made up to the 1.9 million available, and this reflects the request we received it from the contractor from a very simple application process to make this dream wind and easy for these contractors. supervisor chu: thank you. this might be a question for dcwy. it included a certain amount of state budget cuts that we expected to come down the line. if we go forward with this proposal, we will utilize $1.9 million. can you tell me what the long- term plans are so you might be able to save the slots in this car year because there is a $1.9 million reserve balance that is available, but what happens in your out years? >> paris madison for dcwy. we included in the reserves.

we're using $1.9 million. it is my understanding at this point in time that these are one-time funds in using it at this time for one-time funding. we will be working to see what will happen going forward. maybe i did not understand the question. did i answer the question? supervisor chu: you are hitting added that we have this one- time source available for this purpose, but i would imagine the need will continue on to of the child-care slots, so i am wondering what is the plan moving forward for this? will it require a replay toward the starioritzation within your funding? >> there are cost pressures on the city in terms of ongoing commitment, but it is hard to

imagine doing this for just this year and unraveling it, though it will be part of our strategizing together with first five of what the priorities are within the portfolio investments, in making sure we are supporting the title five providers to our system and helping support low- income families. this is important. not to say that every single dollar might make sense, but analyzing what is really needed based on what is used and what the best configuration of redirecting funds might be. supervisor chu: thank you. why don't we go to the budget analyst report? >> madam chair and members of the committee, attachment one on page 5 of our report provides details of the application for each of the 15 cbo's the totals

1,814,722. as you know, the requested amount was 1.9 million. the requested amounts would paid for an estimated, as you stated, 196 slots in early child care programs, and that would be an estimated average cost of $950,000 for each lot. on page four, our recommendation based on the budget details, we recommend you approve it to reduce the appropriation by 56,00875. -- by 560, 875. we recommend you approve the ordinance as amended. supervisor chu: thank you. are there members of the public

that wish to speak on this item, item four? >> i am the new executive director of florence creed and services and whitney young development center. we have several hundred slots that we operate, and 700 families in the lowest economic strata and the city, and we serve five different string districts. with the support, we will be able to support them for the ongoing needs as they try to work and go to school. >> we are not able to open a full time slots to families that come in, because realistically families will go there if they have a choice. this is really saving our

school. we will lose up to 10 slots, children-wise and four teachers if we do not get the money. supervisor chu: thank you. next speaker, please. >> i am the director of environmental justice advocacy. i focus a lot of my work in district 10, in district 11 in district 5 when it comes to young people. i want to ask why one in three children go to bed hungry in this very rich city? why do we have 10,003 wind0 tru/ s? i want dcwy to give us a long-

term plan and encourage all of the city departments and the representatives that represent the 11 districts to have a plan so that they really represent our children and our youth. there is a lot of fluff in what people say, but when it comes to the practical, our children and youth are not getting our services. in the short time you are giving me, i cannot go into the juvenile area and stuff like that, but let me point out to the witness circle -- whitney circle child care center, the whole area is being bombarded by asbestos particles and other just, and we continue to have child care centers in this area, and we continue not to pay

attention to the adverse impact to our children. so that needs to be a factor. i say that because people think they can come and conduct a child-care center, but they have to do that in a good and clean and are meant. think you. -- but they have to do that in a good and clean environment. supervisor chu: public comment is closed. supervisor mirkarimi. supervisor mirkarimi: i am a former member of the first five commission and very much welcome the proposal that is before us. there are two challenges that are on going to san francisco. one is in our attempt to become more family friendly -- family friendly and confronting the notion that this is a cost- prohibitive city. in our aim in order to maintain class diversity, i see no other

choice in the choice that is before us today. at least trying our best to preserve the slots for child-care. i very much would recommend we passed this forward to the full board. -- we pass this forward to the full board. i think supervisor kim is just during similarly. supervisor chu: while we're waiting, i am proud to support this as well. i am really glad we have the four sought -- foresight to put some of our funds in reserve. early child care is file in the city to protecting our young people and their future.

>> good morning. it is important to have the introduction to do a task force to look at the department's and how we communicate, how we coordinate, and how we finance the early care and education system together. what you described, look at administrative deficiencies, looking at administrative contracting alignment. i believe the next step is

introduction of that legislation. supervisor of a los is having some conversations with private foundations to look at a funding support consultant for that effort. those are the last conversations i heard about a month ago. and i believe the process was to introduce it in this current year, so we can move forward with activity going into next year and present something by the end of the year. >> that being said, in the meantime, we still work closely together. marty and i are working together all the time. they have a bigger band width to move contracts out. we have a master contract for subsidies. so it made more sense to do it this way. that is kind of the way we work closely together so we're not duplicating work, and we're streamlining work. how we leverage the work they do with the pilot.

i believe that is the answer, but be aware that we're not waiting for that. we have always worked closely together. it is sometimes difficult to have three masters in the field. supervisor chu: i appreciate that dcyf and hsa is not -- is here. can you tell me why first five is not here? >> actually, they're retrieved is going on. i will be going there as soon as i leave here, because you're so on the commission. supervisor chu: how his first five in terms of helping us with the lack of slots we have for subsidized shelter? >> in this particular instance, i think i outlined what was being done with the money. i think that has not always historically been the approach. it is an example of -- i hope we have more of that. first five is facing a big deficit this year and having to

reduce their investments. soap week -- so we have done a good job to kind of counterbalance each other's cuts and fill in a strategically where we could. but it is coming to a place where we are all taking the cuts, and it is going to be hard to have everything be supported in the way it has been historically. supervisor chu: i appreciate the presentation today. i am not convinced that we're working as closely as we can with the three organizations, frankly, and the share resources we have a the to those locations, so i am interested to see what the task force would bring about. above and beyond the task force, i would like to hear from the departments, including first 5, about those slots and their resources to help us expand that. >> i will make sure i carry that message back to laurel today and to the rest of the commission. supervisor chu: i appreciate that. supervisor kim: i want to

confirm those sentiments. i hope that by the next fiscal year that the task force can have a proposal about how we can blend the services we provide for our zero to five. to be completely frank, i have been very frustrated with first five. the city has allocated a portion of our public enrichment fund, proposition h, which was passed in 2004, to the first five commission. and i know they're building up a reserve, you know, since the beginning. i have not really been seeing first five pitching in to replace some of the losses in our state funding bucks for our child development centers and our child care programs. i hope the next time we have you here the first five will be here with you with proposals on how we are going to work together. we need everyone to pitch in. i understand there on a retreat today. i look forward to this task force coming together before us.

but i think it is urgent that we move on this and have something in place by july 1. supervisor chu: thank you. just on the item itself, i would say what concerns me overall about this proposal, and i have talked to advocates about this, is the fact that i do not see what the festival -- what the sustainable funding source is on an ongoing basis. i understand, from the departments and from the advocates, that they hope that this will be a priority if you have to read prioritize within a restraint budget, that this would be something people would want to support and would continue to support through the years. if there are folks that come in today senior funded as last year so you definitely have to find us this year, i do not think those are the statements being made, but it is a statement saying we think it is important to fund this, and we would try to figure out what happened the following year. i am going to be supportive of

this at this time, but i do continue to have reservations about how we're going to continue to fund these items. mostly i am concerned because we have a number of different things and we're going to see in terms of state budget and tax and cuts that will be going down to local levels. how is it that we're going to prioritize all things? someone said before that just because we did not find it in the state funded it, it does not mean it is less important that some of the things we do. that is true. we have to reevaluate the services that we are providing. do we have a motion for this item? supervisor mirkarimi: i am sorry, yes, i made a motion earlier, and i believe supervisor kim seconded it. i will accept the budget analyst recommendation and to move forward as amended the proposal with recommendation. supervisor chu: we have a motion

to amend or accept the recommendation, and send the item to recommend it -- to the board with recommendation. we can do that without objection. can you call item number 5, 6, and seven, please? >> item number 5, resolution approving amendment number 1 to terminal 3 newsstands least number 04-0165 between pacific gateway concessions, llc, and the city and county of san francisco. item six, boarding areas b and c principal retail, number 98- 0228. item number 7, a man and number 3 to the north terminal bookstore, lease number 00-0176, between books inc. and the city and county of san francisco. supervisor chu: thank you for

these items. we have kathy here from the airport. >> good morning. i am with the san francisco airport. the airport is seeking your approval for two short term lease amendments with pacific gateway concessions, llc, as well as the lease renewal with books, inc, for a series of construction projects related to seismic changes in security changes throughout the terminal. the first ad requests the approval of amendment number 1 with pacific gateway concessions, llc, for two newsstands locations in terminal 3, to retroactively extend the existing leases on those locations on a month-by-month basis through march 13, 2012. the second at the request approval of a fourth amendment with pacific gateway concessions, llc, for four newsstands locationsi