supervisor campos: good morning, and welcome to the thursday, november 10, 2011 meeting of the board of supervisors government audit and oversight committee. my name is david campos, the chair of the committee. i am joined by supervisor mar ferrell, as well as president david chiu. the clerk of the committee is andrea ausberry. covering the meeting for sfgtv are mark and derek.

do we have announcements? >> yes, i would like to ask that you turned the cell phone ring nurse off. any documents presented will be included as part of the file and send it to the court. items acted upon today will appear on the november 22 board of supervisors its agenda unless otherwise stated. supervisor campos: thank you. please call item number 1. >> hearing on the status and effectiveness of the police in the community loan program. supervisor campos: this was introduced by supervisor mar ferrell. supervisor farrell: thank you. i called this hearing today. this has been a number of months ago now, really to get a sense of how our current police in the committee loan program is working in san francisco. this will be a relatively short hearing, but i have asked a number of people to speak about these statistics and how the program is working and how we can make it better. for me, the genesis of this is a belief that having our police

officers, but i think we will also expand that conversation in a future date to include the first responder community in san francisco, having them live in our city and neighborhoods makes this a safer city. you can think about living in our neighborhoods and in san francisco on a daily basis, but also as you think about san francisco, and we have to be ready for the next big earthquake. it is not a matter of if, but when, that comes. we need to have the first responders on the ground to make sure our city gets back on track as quick as possible. i have asked three people to come better here. first, brian from our mayor's office of housing. it currently administers our police in the community loan program. second, i see mickey and jennifer from our department of human resources, to come talk about some statistics about our police officers here in san francisco. also, gary, the president of

our police officers association, to have an inside view on how this is working in the police department and what we might be able to do to make it better. i will ask brian from our mayor's office of housing to come up. >> i think we will rely in the handout. i am the director of community development within the mayor's office of housing. with me is the manager of our down payment systems loan program. what we put together for you today was a brief series of slides describing the police in the community loan program, a program that was created back in 2008, and we issue our first loan on may 28, 2008. these loan funds are made available pursuant to the mou

between the city in the police officers association. it allows up to 220 out of the dollars be placed in the city's mou reserve fund to be drawn down upon by our department. since the time of its creation, 14 police officers have applied at have been approved for loans. all loans have been for the full $20,000. the property's purchase must be single-family residences. that must be owner-occupied. the borrower must be a full-time police officer in good standing. the borrower must never have owned a primary residence in san francisco. of course, that must be able to qualify for a 30-year mortgage. the loan can be used for either down payment or closing costs. and if the officer remains with the police department for five years after the loan is approved, the loan will be forgiven in its entirety. then, of course, if the police officer is rendered disabled or

four killed in the line of duty, the loan will be forgiven immediately. with those 14 loans, we were able to give one alone in the first fiscal year, five in 2008- two nine, three loans in 2009- 2010, and then five loans in our last 2010-2011 year. i have some information about the kinds of houses being purchased, the average purchase price for those 14 loans was $510,000. the average household income, there is no income eligibility requirement on this loan. the average household income was a little over a $130,000. i also included a permission about what the borrower contribution toward the down payment was. it was almost $36,000, and the first mortgage loan amount in the dumping about $456,000. on the last page, i included the zip codes of those loans made, so you have a sense of what it is -- it should actually be 14.

you can see is a mix of locations and neighborhoods. the program itself is wrapped into our overall down payment systems loan program, so the information is placed on our website. if you go to the web site, you'll see a listing preparation for potential homebuyers. then a listing for all of the downpayment assistance loan program. down the list, you'll see the police in the community loan program listed there. interested parties will call our friend does, and the front desk refers them to us, and we will work with them and their brokers will help them through the process. supervisor farrell: thank you for putting this together. as i understand, you said there is 225 out of dollars per year potentially in this program. obviously, given these statistics, it has not been used up every year. that money goes back to the

general fund, right? it does not roll over into future years? >> no, it is not rollover. supervisor farrell: image and its single family residences. does this account condos, as well? >> yes. supervisor farrell: ok, thank you. those were my main questions. is that correct -- can i talk to you for a quick second? i would love to understand kind of the beginning of the process and what happens. someone will call the mayor's office of housing, and the call will be routed to you. how you interact with them and provide assistance? >> we will point and to our website, so they understand the procedure. we have an application process there. we ask them to go to the homebuyer education housing workshop. then they go to a lender. the lender will do the approval process.

once they do that and they know how much they can qualify for the loan and how much they can qualify for the housing, they look for the purchase price. then we help them go to the -- go through the application process. supervisor farrell: so they have to go through a home buyer training workshop that you put on. in terms of the qualifying for the market loan in the private market, are there any additional criteria that you or the program itself puts on a them or is it just it you can qualify, if someone will lend you the money, that is great? is there anything else that the press room it's on the them in terms of the debt to income ratios and so forth? >> we do want to let the debt to income ratio, because we want to make sure the person is qualified for a loan and able to make the payment. we want to make sure the debt to income ratio was there but there

is no purchase price limit. they can do any purchase price that they can afford. as long as they can afford the mortgage payments and the purchase price, they can buy anything with in the city of san francisco. supervisor farrell: as i looked through the criteria the other day, the debt to income ratio, but also qualify for a 30-year fixed loan. that seems to be pretty critical. a lot of people in the country and in san francisco got in trouble with floating-rate mortgages and so forth. to put our officers are anyone else want to support in this program into that situation, that is obviously some the will want to avoid. i was really happy to see that. so that is great. anything else in terms of, from your point of view -- i think this is the first step, and informational think of anything from your end that you think would improve the program right now operationally, the program itself, anything from your end? >> knowing that the san

francisco purchase price is a very high, [unintelligible] i think the $20,000 might not be enough for downpayment assistance right now. supervisor farrell: i think most people would agree with you. >> the loan program is a very good, because it is more like a grand, and to five years for a given. supervisor farrell: thank you very much dih. supervisor campos: i think this program is really important, and it is actually something that i worry about, what happens if there is a natural disaster and we have so many of our first responders who, for economic reasons and other reasons, cannot live in san francisco. has there been any thought of connecting with some of the other city agencies, not just

city government agencies but agencies like the school district, to essentially expand the pool of money that is available or expand the opportunities? i know that at the school district, for instance, with the teachers union, it is actually part of the union contract that the school district is supposed to develop housing for teachers. whether it is teachers, firefighters, nurses, doctors, you know, whoever is, wondering whether or not that is something that has been explored. >> we actually do have a teacher next door program. it is a similar down payment system for teachers with a similar upper limit of $20,000. the funding mechanism is a different. we can get into that at a later point, but we have a similar program with slightly different eligibility. we have received some degree of interest from some other law enforcement agencies, such as the sheriff's department. we have not actively pursue that, because this agreement was agreed pursuant to negotiations.

but there has been some interest. supervisor campos: i am wondering whether the mayor's office has also considered the city itself developing any kind of housing. i know that in some jurisdictions, i think this is like santa barbara, where cities have -- or the one asset that you have made the land. that could be developed. i know that the school district has at different times considered that. is that something we're, you know, you guys have looked into or thought about? >> i can say it has been the topic of discussion. certainly the concept of work force housing has been of interest around the country. but i can go as far as to say it is a topic of discussion. supervisor campos: thank you.

>> thank you free questions. opri next, the department of human resources will give you a perspective. what i have asked her to talk about is not only statistics for our police officers, but i have also been working with our department of emergency management had to think about how we can find our first responders in san francisco that relate -- that are really critical. i will ask her to talk about that. >> thank you peter i am from the department of human resources. just a follow-up on the presentation, i will not restate the fact that you have already heard that i tnk the police in the community loan program has been underutilized, but the rental relocation, which is part of the -- only four officers had taken advantage of it in four

years, and of course the 17th or so with the home purchase assistance. when we first negotiated that in 2007, was the chief negotiator. the board at that time was interested in trying to promote this. we viewed it as a pilot program. frankly, we figured out an amount of money, and it was not scientifically determined, but we thought, well, this would be enough to help people move into the city. i think that what we do not know is whether people are going to move here anyway and we just helped them to move or -- i think if somebody was laboring, that might have put them over the edge to move into the city. we have heard that for a $36,000 down payment average, a gut $20,000 from the city and state in the job for five years, that it's a pretty good portion of your down payment. i think on the whole it is a good program, it has been underutilized, and i would favor considering amending the program

on a future date. we can talk about whether the police union would be willing to consider that although the contract is closed, it is a mutual interest. the union has been supportive of programs that support the police in at the community. so it is a conversation we could have in the context of our general fund concerns. to look at this in a broader perspective, as you may know, the population of this city work force, the majority -- it is just shy of 50% to san francisco residence, generally across all groups, and it varies. interestingly, it seems to be the case that the lower paid york, the more likely you are to live in san francisco. it is a little bit counterintuitive. you would think that the higher paid people would be more able to afford to live in san

francisco. but there are a variety of housing options. many folks who live in the city and our city employees are renters, for example. in addition -- so the police, i will point out, have just shy of 25%, at 24.7% residency in san francisco. went looking at it from a first responder perspective, i think it is reasonable to include san mateo in the analysis because of the difficulty of going over bridges or needing to be a swimmer. if you add cent potato, we're pretty close on 55%, i would say, accessibility of our police force it to san francisco in the event of a disaster. >> for me, the idea is two-fold. one is to especially think about our police officers, firefighters, and sure of speed

up their part of the first responder group, but they're also part of the daily living in san francisco. to me, i think it is amazing to me 75% of our police force lives outside of the city. i think that is a really big statistic. but when you think about first responders and disaster, actually those s and the tally of folks that can come overland is a good thing. -- those san mateo folks that can come over land is a good thing. >> this is people who are employed and where they live. if you look at the firefighters, we have a slightly higher number. 33% of san francisco residents, residentssan mateo ed 16%, for a total of 59% who are accessible by land in the event of disaster. we also have language in the fire fighter contract that we negotiated in 2007 to the effect

that they must be able to respond within four hours of a disaster or being called back. it is interesting question, because, as you may know, we cannot require residency under the california constitution. it is precluded. it is kind of ironic the city is pursuing local hire, and while we can have requirements for contractors, we're forced to do things on an incentive basis in terms of reaching out to communities and recruitment. or programs like the police in the community loan program. >> so the firefighters have to live within four hours? >> they have to be able to show up within four hours. it has not been tested. i think one lives in idaho, and he must have a helicopter. it is a very sticky legal ground. the firefighters, although they have a higher percentage to live

in the city itself, there also have clients -- interestingly, there are more firefighters who live in a cinema than in marin -- in sonoma and in marin, which i thought was interesting. i think firefighters are able to live far away, because the number of days they work is fewer and they work longer days. they do a lot of shift-trading. people who live farther away gather up their time and might work many successive days and then have many successive days off, making the can you less onerous. you inquired about a deputy sheriffs, i believe. we have a similar residency pattern. we have slightly lower than 25%, 24.46% of the deputy sheriffs live in san francisco. in san mateo, it is slightly

higher than that. just shy of 50% of a deputy sheriff in san francisco and san mateo. this is typically a lower-paid classification, so i think it is not so -- when you look at the patterns of when they live, it is interesting that they have a lot in contra costa county as well. very few in sonoma. very interesting. there was mention of registered nurses. we can do any of these groups that you like. we do a zip code run basically against employer records because some of the considerations when looking at first responder are that you actually might not need all of your people to be there right away, because let's say you called in all your firefighters because of a natural disaster, they need a place to work and a track to be on or a station to work out of.

we're more concerned about the second shift toward the third shift and the fact that people might need to stay longer. those are considerations that i am sure respect of fire and police chiefs are taking into account in their disaster plans. it is not as urgent that they be there immediately, but they need to be building in a response and recovery program pretty quickly. supervisor farrell: we have been working very closely with ann, who cannot be here this morning, to really define first responders. your comments and a lot of other questions. i remember after the 1989 earthquake, living down there, my family home was a blockade it off. we cannot even go in the area by the national guard. spending so much time at the red cross shelter, it was the building inspectors that allow people to come back to their homes. not even speaking about a first responders, the building inspectors need to be a part of that group when the deal about

returning people home. it is interesting dialogue and probably not something that is necessarily intuitive but something that we're going through right now. >> we do have the building inspector, which are a little over 44% san francisco resident, and when you add san mateo, another 22%. it is really -- probably first responder is not the term we will use when looking at building inspectors. we're looking at emergency personnel or recovery personnel. it is pretty limiting if we look at what is typically police, fire, and ambulance when we talk about emergency. supervisor farrell: thank you. >> my pleasure. supervisor farrell: next, we have asked gary, the president of our police officers association, to come up and

talk. as i mentioned to him earlier, there are two questions. one, how currently the police in the community loan program, how is it viewed in the department? is it even on people's minds? >> and now that they have to live in tents, their thinking about that. that is a joke. there are a lot of reasons. first, talking about where they live. two-pronged problem. a lot of the officers that we're now recruiting are now from san francisco, so they never lived here. so they are already used to living where they are living in commuting in. it is a matter of getting those people to move to the city. the second problem is that i think that young officers that are renting would like to stay in the city and to stay in the city. what happens after they are married and have a kid, we get into the -- i need more square footage, that whole conversation.

to change behavior, which i think is what we're talking about here, to change behavior and not get up to 50% or 60 cents. i think two things that to happen to do that. maybe three things. i think you're going to have to, as generous as $20,000 is, when you're talking about a $600,000 house, it is not doing it. it is pretty much closing costs. i do not know how cops are getting four hundred $56,000 loans, by the way. i am not sure how the heck they are doing that. that is well over half of their take-away, so they're over 50% ratio, which is not good. that is what got us into this mess in the first place. i have been thinking a lot about this. to give them, let's say, half of the down, and to $120,000, which would be 20% of the six and a thousand dollars. if you're to give them $60,000 toward the $120,000, because they're trying to save the down,

and you are able to somehow lower the interest rate by maybe 1%, 1 point, now you're talking about a difference in your mortgage payment of maybe $500 to $800 a month. now you're talking. i just do not think $20,000 is the number. i think it is a great effort, but i think to really change behavior, which is that we want people to stay here and we want people to come here and live better emerges to respond those -- responders. i did it is equally a report for teachers and nurses. banos we need our nurses during a disaster. we will need our teachers immediately to help care for the children. firefighters, police, sheriffs, these are all important. the third thing is i wonder if it would help to not limited to first-time buyers. because you might have some who owns a town house condominium and would like to move up to a house.

the buyer and you have already bought. i say the three components are a slightly small interest repayment, more help on the down payment, and then also to not limited to first-time buyers. that would be my recommendation. supervisor farrell: from your sins in the police department, do people think about this a lot -- from your sense in the police department, do people think about this a lot? i think it is great first start, but our housing costs are a tremendous. do people view it as a liable thing? >> it is not going to change behavior, $20,000. our officers have gone further and further and further with the affordability situation. a lot of them come up from windsor, which is a heck of a ride every day. we have a lot of officers in antioch, pittsburgh, contra costa county. we have several officers, believe it or not, that the vine

sacramento beat up on the 10- hour workday, you're talking about basically a 14 or 15-hour day. i think a lot of people would like to get those four or five hours a day back. it is a big part of your life. when you get into the area of, ok, i am married with two kids, maybe i want to explore the feasibility of the public-school system, maybe i want to explore the feasibility of park and recreation, those types of things, then other factors become involved. but i think you'd be able to increase by 25% to 30% if the offer was really substantial. and those things that i am talking about, from talking to my officers, i think that would actually change behavior. supervisor farrell: following up on that, can you say a little bit more about the level of the interests, because when i have

spoken to officers, many of them to live in san francisco, but some may not for other reasons. i am just trying to understand what the interest really is. >> i think it is a valid point. i think we're talking about a couple things. we do not want to drown the people in mortgage payments. you know, it is pretty tough for a police officer to be carrying more than a $300,000 mortgage payment. with property taxes, you're of about $3,000 a month, and that is over half their take-home pay. the weather is a concern. some people want to go to the suburbs because the weather is nicer. the sunset district, maryland beckham of bernal heights, the mission are attractive to officers, but the question is, can they buy a home for their families for $600,000? i used that number, and i do not think in our profession, unless you have a huge down payment, i do not think cops should have those kind of

mortgage payments. to answer your question, i think there is an interest in living in the city under the right conditions. but not at the expense of drowning in the mortgage payment. and i think that is a big part of it. i am hearing more and more cops, and mark and i talked about this a few weeks ago, we get a lot of empty nesters. 20 years in the business. they would like to move back to the city into a town house or condo and get rid of their car. there is that group of people, too, that would like to come back to their city and retire. i might do that myself and run for supervisor. you never know. i do not know what district. supervisor campos: is there a way to