president chiu: good afternoon. welcome to the san francisco board of supervisors meeting. could you call the roll? supervisor avalos: present. supervisor campos: present. president chiu: present. supervisor elsbernd: present. supervisor farrell: present. supervisor mar: present supervisor mirkarimi: present. supervisor wiener: present. mr. president, you have a quorum? >> thank you. ladies and gentleman, could you join me in the pledge of allegiance? >> into the republic for which it stands, one nation under god, indivisible with liberty and justice for all.

president chiu: 2 we have any communications? >> i have no communications. president chiu: could you read our 2:00 special order? >> the first item will be the formal policy discussion between mayor ed lee and the board. at the mayor may i address the board for up to 5 minutes. then he will hear from the supervisors from district 1, 3, 5, and nine who will present their own questions. president chiu: mr. mayor, welcome back to question time. i want to congratulate you on your election last week. if you would like to address the board, i will give you the opportunity to do that. mayor lee: good afternoon, supervisors. good afternoon to our public. we emerge from this election season, and i'm very excited to work with you again, supervisors, and i commit to you

i will do everything to continue our solid working relationship and i would like to, as soon as we can, schedule individual meetings, and your welcome -- not only for question and answer time -- but to call on my office anytime. with that, i am eager to get right to the questions. thank you. president chiu: our first question will be from our colleague from district 1. supervisor mar: thank you. recently we held a meeting looking into the creation of a municipal bank. san francisco currently divide its 200 bank accounts between three massive firms -- wells fargo, union bank of carolina -- union bank of california, and bank of america. the city needs to look to its own assets and strengths and

reinvest locally. as you know, it is not a new idea. it was a demand of the 1975 san francisco community congress, and the board of supervisors commissioned a legislative analyst report at the request of supervisor matt gonzales in 2001. i municipal bank eventually invest millions in low-interest loans for alternative forms of development in san francisco, prioritizing nontraditional business models. at a time when millions of individuals are taking their money out of large banks and putting them into local institutions, it seems necessary for the city to consider this option as well. in addition, throughout most of the city, including all of the neighborhood commercial districts, formula retail stores and restaurants are considered conditional uses. this means the must be approved by the planning commission on the case by case basis. this gives residents more control of the development of their communities. however, the planning

department is interpreting the formula of retail lot to nearly exclude banks and other entities not specifically listed in the formula of retail law, despite the fact that formula retail is defined with reference to a catchall category -- sales and service, retail. all of these, including banks should be covered. do you support the creation of a municipal bank for our city? mayor lee: thank you. you covered a lot of ground on your question. i will try to answer in the allotted time. first, let me address the neighborhood commercial corridors. i share the conviction of the voters and the board. that formula retail control helped create the environment for small businesses to thrive. our neighborhoods are defined by the unique commercial corridors

that are built around them, and i think we need to protect the distinct culture and feel of each part of our city. i also share respect for the law that the planning department and the board of appeals have applied to the issue of conditional uses for retail establishments. if we want to change that law with straws on citywide rezoning, and proposition g in 2007, we have that opportunity. we are restricting all banks. not just formula retail banks. well we can do more, we must keep in mind that -- while we can do more, we must keep in mind that while we may be restricting any bank to formula retail standards, including credit unions. banks can be in commercial orders providing access to

communities with traditionally low rates a banking. but the city's formula retail controls are undeniably a work in progress. within the last four years, there have been a tense to expand them on nine separate occasions. -- there have been at chance to expand on nine separate occasions. turning to your second question regarding municipal banks, and of this is something the board has been considering it recently, and i understand the motivation for this. i would also consider the fact that the state law explicitly prohibits us from doing something like this. we need to investigate why the state fund did not in the public interest to set up banking institutions. i would also want a thorough analysis of the unintended consequences of a policy like this. i know the city of los angeles the about the same issue. they would face $20 million in

termination fees. they would also have to refinance much of their debt with a much higher debt costs, putting a lot of their capital plants in jeopardy. i understand logical reasons you're talking about this, but we have to make sure the realities of our financial picture are taken into account as well. president chiu: i will ask our next question. earlier this year, i requested that the budget and legislative analyst perform a review of the frequency and cost to the city of contract order changes for large construction and professional service contracts. the report found that half of the contracts had modifications, which totaled almost $300 million, which was close to the size of the city's budget shortfall last year. the report also found that there is less public scrutiny of contracts in our city than other jurisdictions, and contract

information is not kept in a uniform manner by various departments. i would like to know what your reaction as to the findings in the report and whether you agree that we need to reform the way we approved, monitor, and report these contracts? mayor lee: thank you for that question. i am unsure whether the report tells the entire story. additionally, i have not seen the report. when i know from my time as the director of public works, not all change orders are bad. if you move forward with this legislation, i would urge a word of caution, something i learned from me dpw days. is important to separate construction, nonprofit, and i.t contracts. . for construction contracts, there are categories changes go into. these categories include unforeseen site conditions.

this can be a construction site that turns out to include unknown utilities or pipes and unexpected locations. and by the way with all the focus on utilities, you know as well as i do that people and companies do not know what is lying underneath even though they put their. second, owner-initiated changes. imagine a contractor discovers the adjacent pipeline is leaking. we ask them to repair that leak. category 3 -- areas in domitian's. construction drawings and specifications for some projects over 1000 pages long -- as much as the city strives for perfection, there are some conflicts, and i agree our goal should be zero mistakes. it is for these reasons that most construction products have a 10% contingency fund.

the decision to change the field has to be timely. if not, it could cost the city more money. the longer we delay a project and approvals, the more we will pay and increased overhead costs. our construction contract in task force agreed with this principle. study after study -- from this task force, the grand jury, the comptroller, legislative analyst -- have all recommended shifting from the site monitor to improve efficiencies, streamline, and expand. i have experienced in this field and i understand your frustration, president chiu. all documentation must be appropriate and necessary to deliver city projects on time and on budget. president chiu: thank you, our next question will be presented

by our colleague from district 5, supervisor mirkarimi. supervisor mirkarimi: thank you. this is regarding job creation, mr. mayor. according to information provided by the mayor's office of economic and workforce development, san francisco's human services agency and the economic work force the bill -- i said that. started. at $25 million in federal stimulus funds available from may 2009 until september 2010 to use port jobs and now placement programs. with these funds, hsa was able to provide job services to over 4000 low-skilled or unemployed san franciscans in less than a year-and-a-half. city data also indicates the sense federal funding stimulus ran out over a year ago, they have only been able to serve approximately 550 san franciscans in these programs annually, a significant

decrease. what level of funding for these programs do you propose in the upcoming budget to the full year campaign pledge of job training and creation? mayor lee: thank you, supervisor. first of all, let me congratulate you on your election. supervisor mirkarimi: thank you. mayor lee: i look forward to working for -- and working with you as your. one of my top priorities in taking office was job creation. as you pointed out, the jobs now program was originally funded entirely by the stimulus fund that resulted in over 4000 san franciscans being placed in jobs. i am proud that we've been able to maintain jobs now with local funding even after the stimulus funds have expired. this year, over 700 unemployed san franciscans have been placed in jobs, including 200 individuals who are now

maintaining our streets and our parks while building career skills. additionally, the city has been awarded an a grant from the department of labour to provide employment for low-income, non- can -- low-income, non-custodial parents. this program will provide job training and placement, transitional employment, and incentives such as adjusted child support obligations to assist non-custodial parents need their child-support responsibilities and gain employment. public-sector programs like jobs now and transitional sf are important, but they're only part of the solution. equally important -- private-

sector employment growth. at the end of the day, the only way our job training and placement programs are going to be successful, is to make sure there is a job for every san franciscan. that is why i would join supervisor avalos in providing construction jobs. i support initiatives that focus on our manufacturing sector. i have also called for the creation of jobs investments, and i look for to working with supervisor chu in particular, as well as others. as you know, we're in the early stages of the budget development process. in a few weeks, my office will be releasing our initial deficit projection, and we will be eliciting from departments

measures to offset the deficit. i can assure you, supervisor, programs that spur job creation and it support economic growth will be prioritized in the budget i submit to you next june, and i look forward to working with you to get your support in implementing these programs. president chiu: our final question will be asked by our colleague from sault -- from district 9. supervisor campos: thank you. i am joined in my question buying supervisor avalos from district 11. hopefully this will not lead to confusion, because we're confused all the time. as you know, mr. mayor, the san francisco municipal transportation agency work orders total $60 million to other city departments for

services, including services that may not have a direct connection to public transit, and one example of that -- we are well aware a significant portion of that money goes to fund the motorcycle fleets for the san francisco police department. clearly, that fleet is an important -- plays an important part in the life of the city and should be funded. the question is whether it should be funded by the mta. would you commit today -- i know it is difficult to get any of us to commit to something of this type -- but would you commit to reducing the amount of work orders by least 20% by fy2011- 2012 so the mta will have more money to increase transit services for all riders? mayor lee: thank you for your work on the mta.

i agree needs to find a way to achieve cost sufficiency is for muni, but i do not know reducing mta work orders is the way to do it. a work order is simply an agreement to provide services. reducing recorders will mean mta has to provide services, which in just about all cases will be in areas where they do not have a core competency. either that or they will have to purchase those services from elsewhere, potentially through third-party vendors. it is not as if a reduction in work orders will necessarily lead to a commensurate decrease the need for services to keep the new system running efficiently. one more quarter targeted for reduction is the work order for the san francisco police department traffic division. mta gives some money to the traffic division for assistance for officers managing the

streets and effectively, which increases muni travel speeds. producing this work order would reduce the sfpuc -- reducing this work order reduce the asset -- sfpd is on the streets. this would reduce service speeds. i am not sure we would reduce the work orders to help traffic. this is just one example, and that would be happy to discuss the specifics with you. like i said, i am open to discussing areas where work orders could be reduced to enhance services and bring down costs. but to do one without the other would be counterproductive. that said, while bringing muni cost down -- that will most likely come from strategy is like savings under prodigy. we can see impacts of this in future this will years. also, we d