and seven years old. now, it is not like that. we are able to help those who are otherwise unable to get there now. i have seen the work we have done at hunters point and the new mission club. ii am ecstatic that we're moving it club down to the western addition so we can serve more kids. thank you. supervisor chu: thank you. >> good afternoon. i am the club house director for the tenderloin club. i want to talk a little bit about the wider impact that this is going to have it this comes to fruition. some have been to our club, like supervisor kim, and we're one of the smallest clubs. in terms of space, we have a social recreation room, and we have a learning center. and most days, except for

tuesday's food bank, we have an art room. otherwise we share everything else with mercy housing. so we are at their whim. we use the committee, so our kids walk five blocks to the tenderloin rec center, and we share that space. if you are familiar with the space, you know that the gym is not even a half-court gym. if you have seen it the rims, and i am sure you are aware that we're sharing that little tiny space. we use the court, the outside area. and just to paint a picture for you, there's an outside hoop, and my social rec director was talking about, on a thursday, when the rec is doing the skate park, his basketball practice, because they cannot use the gym, was in between cars shooting free throws. now, if this works out, our kids are going to be walking a

shorter distance than they do even to go to school. [bell rings] to carmichael or tenderloin community school. and they will have a full gym and other resources as well. thank you. supervisor chu: >> good afternoonm alumni of the tenderloin boys and girls club. i was a member for 12 years, so i know what it is like for us to have fewer resources compared to other clubs bit of for example, we walked five blocks to the tenderloin rec center to share a small gym space, which is also used for a dance class, roller rink, and for basketball games. the programs for the kids -- the rec center is also used for programs for the kids. so our kids are always the one-

like, we cannot always use space. however, if we were to walk seven blocks to fall to an end gough, our kids would be a what to play with these and have appropriate space. in closing, this possibility will help allow the kids to explore their interest and have an additional programs to benefit their future. supervisor chu: thank you. are there members of the public who wish to speak on item number 8? aca none, public comment is closed. jennifer, did you want to add anything? >> yes, i think we would request that we move the amendments, which are to the purchase and sale agreement. they're not to be underlying resolution. and we're happy to include a for the amendment that would require the housing development, per supervisor kim's questions, and if we could do so at this time, we would request that the

item be moved to the full board. supervisor chu: thank you for your request. question to the city attorney. technically, given that this is the underlying agreement, the first three items, in addition to the fourth item with amendments, do we have to take a motion on that? >> madam chair, deputy city attorney here. no, you do not. the new agreement would be lodged with the committee. and if the committee desired to move the new version of the agreement for work, then that would be the vote could you do not have to move to make an amendment. supervisor chu: thank you. colleagues, given the presentation, i think that we certainly got more information today. we certainly have improvements with regards to the amendments, the first three, in addition to that last suggestion. but i would be uncomfortable sitting this item forward to the full board at this time because there are so many moving parts to it, and i prefer we get most of this information solid at the committee before we send it forward.

it would also get the budget analyst time to reflect the changes in the budget analyst report, which i think will be useful as we continue to talk about the speed of at the end of the day, we will be able to make improvements through the amendments to change the financial picture for the city and to provide additional guarantees that strengthens this deal that we would be able to consider. but with regards to the process and how it came forward, that will ultimately be a policy called for the board. and i understand that part of it. there's nothing you can do to kind of change the way that this transaction came to us. i understand that a but i think we should spend some time to ensure that we're submitting, at least on the financial component, the strongest language and the most tight package possible. so i would request that we continue this item to january 4. that will provide supervisor mirkarimi -- that will be his last meeting. but he can be part of that, given that he is the sponsor. and it will give the department of to make sure that this

information provided to us is complete but i am a hopeful that the department will be able to sharpen your pencils around some of the public amenities that were promised through the selling of the parcels could do -- to make sure that those are what they should be. so those are some of the outstanding issues i think we can work on, sharpening the language with regard to financial, and two, making sure the information that we are provided under the public amenities we promised under the central freeway agreement is committed to and we're prioritizing that. supervisor mirkarimi: thank you, madam chair. i find that reasonable. i think that with some of the refinements that have been discussed here, and in the conversation has been good, there is an anticipated standard of what kind of contacting data should come before us. so use the next few weeks in order to perfect that. of course we want to see this happen. i do. but let's just get to that next

step in making sure that it is well-secured. supervisor kim: i support as well, and i really appreciate the work that has gone on over the last couple of days to strengthen and clarify some of the questions and concerns that were brought up. again, i am really a fan of boys and girls club, and i actually think that this is a great parcel, both for the western addition and the tenderloin, i see how this will benefit the tenderloin as well. and in terms of the western addition, i think more of the families, anecdotally, seem to be more closer to the eastern side of the western addition than the western side. and with sfusc and the ballet, there are many great partnerships for our young people. i think that will be important. i am glad to see that this is being brought before us.

i am happy to work with all the partners before this comes back to the board, the budget committee, on january 4. supervisor chu: thank you, colleagues. thank you for the presentation and information but hopefully the department will work with us and we will receive actual language of the amendments as well before the january 4 meeting. so, colleagues, we will continue this item until its january 4, our first but a meeting of the year. thank you. supervisor chu: thank you, can we call item number 7, please? >> item number 7, resolution approving the amendment of the resolution approving the second amendment to the refuse collection agreement between the

city and county of san francisco and trichology sentences go, recalling to golden gate, and recall it is and this scavenger, increasing the total not to exceed the amount of the agreement from $23,537,527 to $29,337,527 under charter section 9.11b. >> the resolution request an increase in the not been -- not to exceed amount of $5.8 million to the mou agreement between the city and rheology, formerly known as sunset scavenger, which provides to the collection and disposal of solid waste generated by the city. oca inherited this agreement, which was originally proposed by the then deputy city administrator. the terms and conditions of the agreement, as previously

approved by the board, remained essentially the same. they are simply requesting approval to increase the dollar value of the contract to allow user departments to pay for refuse collection services through the end of fiscal year 2011-2012. it has been approved by the board during the budget process. the services provided include the collection of waste from city receptacles located on city streets, the three boxes of various capacity, located on city property and public parks. it does not include commercial or residential collection. we wanted to provide you with a little bit of history regarding the agreement.

their original term of the agreement was april 1, 2007 to june 30, 2011. at time of approximately four and a half years. and not to exceed amount of $29,337,527. the agreement included two one- year options to extend the contract, which could be exercised at the sole discretion of the purchaser. amendment 1 exercised the first one-year auction, extending the term to june 30, 2012. it also added half a million dollars, increasing the not to exceed the total to just over

$23.5 million. in the amendment, we also made changes to various standard terms and conditions to bring them to the latest versions, which is a standard practice for oca when amending agreements. although the march 2007 resolution gave the purchaser the sole discretion to exercise the two one-year options, the resolution specifically approved a not to exceed amount just over $23 million, which was less than the original requested amount of $23.5 million. because the board designated a lesser amount, oca interpreted it that charter section 9.11a, subsection b, requiring board

approval of any contract estimated to exceed $10 million or amendments exceeding half a million dollars to such contracts was applicable. again, the business terms of the mou, has reviewed and approved in 2007, are essentially the same. with the exception that oca has negotiated for the elimination of the cola increase that recology was entitled to for fiscal year 2011-2012. that cola adjustment would have been 3.25% or approximately $182,000 for the year. the mou agreement includes pricing for the collection of city refuse, based on the commercial rate schedules, with the following adjustments -- there is a rate discount of 25%

off of commercial rates for their recreation and park department and a 17% discount off of regular commercial rates for all other city departments. we would like to note though that in practice, recology has actually provided a 29% discount to recreation and parks. there is also a recycling incentive program, and it is sometimes referred to as a diverse and discount, based on the volume of waste that departments are able to divert. finally, there is a cap credit, is essentially the city may receive a credit to cap the city's costs under the contract. as applicable, the city receives that credit, which is distributed equally to general fund departments. there is one last price adjustment which allows

recology annual cost of losing adjustments, and that is the cola increase. the office requested information regarding rate increases since the inception of the contract. so we would like to provide you with that. and willie, recology -- and willie recology provides the right books for the rec and park the permanent separate rate books for all other departments, reflecting the rate discounts described. this table utilizes a sampling of prices from the city's great books. any rate increases, as you can see, are applied equally across the rate categories. . this table, again, illustrates the history of price increases

over the term of the mou and reflects recology's agreement to waive its right to a cola increase in fiscal year 2011- 2012. our calculations indicate a cumulative increase of 16% for the term of the mou. as of the time this resolution was submitted, all funds remaining on this contract were incumbered. their proposed increase of $5.8 million was estimated by taking the actual amount voucher in fiscal year 2010-2011, which was $5.7 million, plus an additional 2% contingency of $100,000. we think the small amount is

reasonable based on fluctuations in usage. further, the not to exceed amount is an agreement cap. it does not obligate the city to spend this amount. the amount departments can spend as determined by their budgets, which have already been approved for fiscal year 2011-2012 by the board during the budget process. because the city negotiated the waiver of a cola for fiscal year 2011-2012, the total cost to the city is estimated to be the same. the savings is estimated to be, again, approximately $182,000. the resolution requests an increase of $5.8 million, increasing the not to exceed amount from $23,537,527 to $29,337,527.

thank you. i have staff from oca, as well as staff from the department of the environment, and representatives from recology to answer any questions you might have. supervisor chu: thank you. let's go to the budget analyst report. >> madam chair and members of the committee, we have not completed our analysis. we have just received information from the department. we will be having the various recommendations on at this item. but as of this time, our recommendation to you is to continue the resolution so we can complete our analysis. supervisor chu: thank you. let's open this up for public comment. are there members of the public

who would like to speak on this item? seeing none, public comment is closed. just a question in a given the information that you have received from the department, it sounds like from your report the items that are missing our actual rates that have been paid by individual departments and also what the actual amount that will be needed to carry us through the end of the fiscal year. seems like that is the missing information. is that correct? >> yes, that is correct, and we just received information that will enable us to complete our analysis. but that is correct. supervisor chu: thank you. given that you have received the information, would it be a problem to be a budget that information prior to a tuesday board meeting? >> no, we could do that. i just would advise you that, based on our preliminary analysis, we are going to have recommendations to change the numbers. supervisor chu: right. potentially -- potentially

lower? >> yes. >> if we were to amend that at the full board to a lower amount, that would not be substantive, what it? >> that is correct. supervisor chu: despicable thoughts. i would be interested to hear what my colleagues think about this. i appreciate the work that the budget analyst is going to put into analyzing their rates and what we're paying and how much we do need. i and understand where the department is coming from. it has to do with your prior year experience. so the budget analyst is trying to get to a point where we really understand how much is needed, as opposed to just taking last year's amount. so i can appreciate this information that we're missing at the moment. from my leg of this contract, it looks pretty straightforward. the board approved this contract in 2007 for a four and a half year time span. we anticipate another time of corporate $23 million for that time spent a we give the purchaser the ability to extend

contracts on a one-year by one- year basis. but we never gave them authority to increase an appropriation for it. that is why they are coming back here now, because they have exercised the option to extend it for one year, but we did not give them the money authority to do that. there's no budget impact, because we included the amount in this current year budget, so there's no additional cost to the city. it is something we already anticipated paying for. and we still have garbage to pick up. so we are running to a place where we really do need to continue to pick up that garbage. i know that if we were to go to the department and say, would you be able to it out again, even if we were able to in the were no charter issues associated, it would be practically impossible for the department to go through an rfp process and select a new vendor by the end of the fiscal year. i do not see a clear reason why we want to delay with these restrictions, based on what the need is the however, given that

the budget analyst has expressed concerns about how much that actual value is, what i would like to suggest to the committee perhaps is the within the item to the full board for this upcoming tuesday's meeting at the current level without recommendation and to allow the budget analyst to work with the department to determine the amount. if it is less than requested, that would not require a continuance, because it would be lower authority. that would be a way to try to get the city to a place where we are continuing to meet our obligations. it seems irrational and straightforward. those are sort of my thoughts. i would like to hear what my colleagues think. supervisor kim: i would support moving this forward with no recommendation, as long as the budget analysts office feels like it has enough time. i know they got the information quite late. but looks like they do. my other request is for the next

one-year reup, that this come to us sooner. then, you know, than later. maybe even as early as june and next year, so we have more time to evaluate it. >> absolutely, supervisor. we would be absolutely happy to accommodate you with that. supervisor kim: thank you. supervisor mirkarimi: i can make a motion. i thought you cover the bases well. considering the amount of attention focused on recology and services provided, contracts, past, present, and future, over the last year, i do not believe anything that is before us is not a surprise and that the budget analyst really needs that extra time. i think that this process is built into that we can at least be updated in time for the board's meeting. supervisor chu: thank you.

one final point, this is a contract, and the values in terms of it were part of the 2007 contract that came before us. the one change that did occur in this reup, just a note, is that we would not be paying an additional cola. in essence, the city is getting a better deal than what we had anticipated in 2007. so i want to note that component. i want to thank the budget analyst in advance for your work for getting us to a good number to let that go with that, we have a motion by supervisor mirkarimi does in the item forward without objection. thank you. let's return to item number six, please. >> ordinance amending the san francisco administrative san16 .900 to 16.905 and 21.02 to update provisions regarding the san francisco health service systems contracting authority

and the city's employee benefit cafeteria plan. supervisor chu: thank you. this is actually an item that the health service system asked me to carry for them. it is is simple item, and it is non-controversial, i believe. generally, the voters come in 2004, approved proposition c, which remove the health service system from the city's department of human resources and made the organization a separate department. however, the administrative code was not completely cleaned up to that effect. what is proposed ordinance would do with the we would end and administrative code to designate that the health service system as the city's department is responsible for administering the city's benefit cafeteria plan and for contracting for services related to those benefits. right now, is still reside under the human resources department. it is a formality and clean up language. the ordinance also confirms that

the courts, as well as the sfcta are also participating employers to the city's plan. i believe these are not controversial. it is really clean up language. there is no fiscal and back to this item as others in a budget analyst report to it. with that, let's go to public comment. any members of the public who wish to speak on item number six? see none, public, disclosed. can we send this item forward with recommendations? we have got a motion to send forward with recommendations. we will do that without objection. thank you. let's return to item number nine. and would you call item number 11, please? >> item number 11, hearing to consider the annual review and approval of the board of supervisors/clerk of the board annual budget guidelines. supervisor chu: thank you. we have already called item number 9 and 11. for number 9, i would just ask

the mayor's budget office to just completed finally the presentation in assessing play with regards -- in a succinct way in regard to the requests. since you have made the request and instructions were given, it would be good for us to kind of know what they are. >> thank you, supervisors. i am the mayor's budget director and the instructions that the major issue to department yesterday was a request that departments submit budgets that reflect a 5% reduction in their general fund support for the next year, fy 2012-2013, an additional 5% the following year, fy 2013-2014. all of those proposals, he has instructed them to be on going so that they provide ongoing savings and balance both years of the budget. he has also asked for a 2.5% contingency proposal that could be implemented in either year. that could be one-timer on

going. that is a hedge against risk on federal tax and labor negotiations but on top of that, he has asked the promise to reduce overall general fund fte's 51% in each year and 5% over the let -- next five years, and we will be discussing those results with departments. i think i will stop there. i think that is enough said. supervisor chu: so the general instructions have been 5% on general fund expenses to departments at the moment, as well as the two-year budgeting criteria that any budget proposals are actually contemplating with the second year impact will be a double- >> right. supervisor chu: and the most important part is the potential reduction in workforce? >> i would not say that is the most important. it is a 5% the first year and a 5% next year. 5% on going, and then another 5% on top of that. i do not know i would say it is more important, but part of his

thinking is that as we go forward, we should see a reduction in our work force by 5% over the next five years. we will be working with departments as they submit proposals to make sure they're also looking at positions. primarily vacant positions. the mayor would prefer to see this achieved through attrition and not back-filling positions, as proposed -- as opposed to mass layoffs. supervisor chu: there many things we have, whether there and do positions, and other things? >> yes, and being careful about hiring and looking carefully at what positions we absolutely need to backfill and what we can eliminate and consolidate and gain efficiencies. supervisor chu: thank you. supervisor kim: i know that i have heard from some of our budget advocates who will work with every year in the community. one feedback that i heard was that there are certain items that are put on