all of those families. what i mean is that a gentleman from one of the department's spoke about disabled member is getting a flat rate. i think it is a disservice because people are disabled, we should shortchange them in terms of what they need. the nonprofits that have questions, they can work on this together. thank you. >> thank you. next speaker. >> [singing] said the worker man to uncle sam, do you hear what i hear? more budget wage money shining in the night, shining their bright and bold, let us bring

them silver and gold let us bring them silver and gold let us bring them silver and gold and gold >> [regular voice] thank you. >> and good morning. i end with a nonprofit social enterprise in the city. we are one of the contractors that were referenced. we serve about 400 individuals both in job training and placement. my main concern with the removal of the exemption is that when --

that our training programs would not survive. most of these people are on it as as i -- are on ssi. this would jeopardize the program. my name suggestion would be to leave in the nonprofit exemption or social enterprise exemption. >> one thing that i am more interested ideas about the non- profit exemption which is very broad and if there are perhaps a more narrow exemption that could accomplish the goals of this legislation while taking account into the needs of these very specialized programs.

>> we came down and learn about it. we have a great time with your staff. thank you very much for including us. >> hello, i am from a social enterprise that has a history of training and employment for people with disabilities in san francisco. we really support the goals of consistency and consolidation. we have concerns about the unintended consequences that were spoken about for the people that we serve, people with disabilities, are around benefits and viability of our training program. we thank you for the offer to continue the dialogue and we will be in touch with gillian. >> thank you very much.

>> speaking as a community advocacy organization working to promote opportunities for disadvantaged communities, we strongly support this legislation. it is very good. we think it is important what is happening here. in light of the fact that we will take another week to work out some of these changes, it has been stated that there is a desire to approach another industry for a race to the bottom which is on city contracts for landscaping. there are many contracts that are and minimum-wage and no benefits. in fact, there have been steps on that through treasure island on work that supervisor kim did.

in saying that, this is an opportunity. ehud could add this week that we had, you could add landscaping as a covered industry and taking advantage of what you are developing here. you would do that by moving the current section and insert a new landscaping and development definition. i know this one has been on the books for like a year. i have some papers on hand. there is some language so we can look at how we can require prevailing wage on landscaping and make this even better. >> thank you. >> we will continue to work with you and with local 261 to see what we can do. next, we have ramon hernandez

from local 261 and then local 350. >> thank you for supporting these prevailing wages. on a and lead to work with supervisor wiener. it does mean a lot of work for san francisco. i hope that we can do something to work it out.

i am pretty sure that we can do something with the nonprofits, to do something with the training and what ever we have to do. >> good morning, supervisors. as you know, the hiring process is for the people of san francisco and a majority of the minorities and small areas where they have economically challenged residence. this is a beautiful program, it works well, and we want to keep it that way. as mentioned, we ended up losing some members to the contract and

those drivers were not paid and probably still are not paid. i think that is a travesty. we support this legislation and we hope that you can vote in it through the committee. thank-you for your support. >> thank you. are there any additional public comments? i see that the city purchaser has arrived. do you want to say anything? >> i am the sustainability chair at the san francisco green party and i also coordinate local grassroots organization and our city. i want to speak in favor, now that we have a delay on this, let's get it right. landscape workers need our support. we need to make sure that every worker that is hired by the

city gets as much pay and benefits as they can, especially after the last election. now that we have a delay, there is no reason not to be more inclusive. in my work for clean energy, i have directly saying the laborers run into problems because the rules were not laid it down about who works when for what they. let's get ahead of the game and make sure that since we have a delay any way, let's do it right. >> thank you. are there any further public comments? >> given that there are no comments, we will close public comment on the item. >> would you like to add anything? i know you have thoughts about possible amendments. >> yes, supervisor.

i was unable to get those by the end of this meeting. i would argue that this is a friendly amendment to create a level playing field. i am still working, i was hoping that this is not a substantive amendment. >> as i understand them, it seems like they would be very process-oriented. >> madame chair, if the committee would adopt the amendment, this would be from the beginning. >> motion to adopt the amendment. >> thank you, supervisor mirkarimi. >> what i would ask is that the committee continue this item to january 4th budget committee meeting which i believe is the next one.

we will work with the departments and the nonprofits that came out today to try to see what the common grounds we can find. we will work with ms. kelley on her amendments and we will continue to work with local 261 to see if we can include that work in this legislation or if we need to find legislation. we would come forward with additional amendments which may or may not require an additional one week continuance. >> we have a couple of questions. >> actually, i will take the liberty of this opportunity that this will be my last budget committee meeting where i would be able to co-sponsor something. this is an apt response to what i believe is overdue in assigning the prevailing wage

for this segment of our work force. i would like to be identified as a co-sponsor. >> thank you. >> no questions. it just some general comments. i would like to appreciate supervisor wiener and his office for taking on this issue. this is overdue. i appreciate a lot of the work that went into cleaning out the ordinance and making consistent the penalty for violating the wage. also, extending new contracts. i think that we saw it is really crucial in terms of making insistence for those that are employed. i'm looking forward to some of the discussions. we did talk to some of the nonprofits. i am interested to see if there

is any feedback on ways to narrow the profit exemption. i am very supportive of the rest of the ordinance. thank you, supervisor wiener. >> thank you, madam chair. i am here on a different item and i wanted to take an opportunity to say a couple of things. thank you too supervisor wiener and his office for the work they have done, and to our labor partners that have worked to identify this as an issue for quite some time. i am proud to be a sponsor of this legislation and i am glad to see there is work in terms of figuring out whether a narrow exemption is appropriate. i do hope that to the extent that there is an exemption that it is as narrow as possible. it is a roddick to see some nonprofits talk about not having to pay prevailing wage. i think that we have to be very

careful in how we craft any exception. i think that prevailing wage is something that we should try to aspire to as much as possible and that should be the norm, not the exception. >> we have made to the motion. just a couple of follow ups. in terms of department feedback, i appreciate the opportunity to work with the department to make sure that we're not adversely affecting some of the nonprofits and the other contract in work they do. i would ask supervisor wiener if he would reach out to the other departments to make sure we have covered at our bases, whether there are other folks want to consider, and in regards to the financial impact, i and stand the argument that there is not too much we can assume in terms of how bidders will come in

within the prevailing wage rate. it is very difficult to estimate what the impact would be on the city. give us some thought on how we can provide more impact us information about what the impact would be. i think that the report did not have too much of the financial information that we would like to consider. finally, we have worked very very hard. and a stand of this will impact these efforts. "we will have time to consider those impacts. we have a motion to continue the item to january 4th and we can do that without objection. thank you. now, if we can call item number nine and 10.

>> hearing to include financial update and information on budget instructions and process for fiscal year 2012-2013. item number 10, hearing too examine the current san francisco public utility commission rates and cost of service before city departments and other customers and consider impact of change in rates to cover cost of service. >> thank you very much. for this item, we're joined by supervisor campos. i want to make sure that we are hearing this in conjunction with budget updates. i would offer to the supervisor opening comments for the power rates.

>> the staff has been diligently working on this issue. this is an item that we ask for a hearing on because it raises some very important issues about how the san francisco public utilities commission is charging city departments, the cost of providing electricity. this is important for us to understand that there are long- term implications on the puc. the p c is a very important asset to the city and candy of san francisco 10 too want to

make sure how this is properly handled. we will be hearing from the public commission today. some of the numbers are so sick with that practice and some thoughts about moving forward to. what happens, there will be a budgetary impact on city agencies and city departments which is why i think it makes a great deal of sense that this is happening in the context of a larger budget discussion. i look forward to the presentation, the discussion. i apologize that i must about 4 part of the meeting but i have a previously scheduled meeting that i cannot change at this

point. i would like to thank the puc, the general manager, and his staff, for the good work on this issue. >> did you very much. i will ask the mayor's budget director to come forward. >> good morning, supervisors. i'm here to represent the mayor's budget instructions for the next fiscal years. i will start off with a little bit of context. let's get the context. i will present the general fund.

this will be labor negotiations. this will be a factor in our negotiations. by way of context, i think the most important thing is that this is the first year that the city will be adopting a budget for all the departments. this is the first time that forward general, we will be adopting a general budget and to have to balance both years and that means that we will not be able to rely as much as the past. still leave a deficit in the following year. the mayor has been focused on implementing more long term planning with our five-year financial plan and this is a big step in those efforts. for the enterprise department,

this will be the first time that we will have a fix to the the would-year budget, so the budget that is adopted for the next year would only be reopened in the second year if their revenues and expenditures vary by more than 5%. we are not quite there on the general fund side. it will still be a role in fund budget for the total departments, but for their pride departments, it will be a fixed two-year budget. hopefully, eventually will be applicable enough to buy the same thing on the enterprise side. we have new adoption that will be impacted our budget. the first is increasing our general fund reserve. we funded a $25 million fund research. we will be wrapping that to $39 million, which provides additional cushion turn the fiscal year to whether any unexpected budgetary impact, for example, state or federal cuts, revenue losses.

again, that is a proven and sound fiscal policy. we also have limits on our use of our abilities one-time revenue for ongoing expenses. again, hopefully, we will address some of the structural problem we have seen in our budget over the past several years. we have our five-year financial plan adopted unanimously by the board earlier this year that will provide guidance and our balance in efforts. again, emphasizes the need to implement ongoing reforms, structural changes to our budget. we have 27 labor contracts expiring at the end of the year. essentially, all unions except for police officers and firefighters will be up for negotiation. that will have a big impact. about 50% of our budget which will have an impact. the mayor, like last year, is focused on having a great deal of engagement and involvement from the community and nonprofit

partners. he has already begun the process of meeting with bob crawford rather than the lives to get feedback into the budget process. at very high level, next fiscal year, predictions -- projections, on the revenue side, as the seven previous meetings, we continue to see local tax revenue improvement in all our tax revenue sources. that is being offset by the loss of on the ballot that we use in the current year budget, other one-time revenues, as well as reductions in state and federal funding. on the expenditure side, we continue to see increases in our personnel-related costs. we are assuming the loss of one time savings, reductions in our capital budget that were used in the current year to balance the budget. at the high level, good news on the revenue side of 75 loss of

one time revenue. the big problem continues to be on the expenditure side. this is the bottom line for fy12, 13. predicting $52.7 million shortfall. for the following year, 13, 14, a shortfall of three of $75.3 million. this is the first time we're doing a two-year projections. the second year number is a cumulative number. this is a change from where we are right now in the current budget. to the extent we saw that for the first year with ongoing solution that brings down that second year deficit, which emphasizes the boards of taking on going action to balance the first year. >> with " -- supervisor chu: does the general fund deficit assume any power increases, given our current topic? >> yes, based on conversations with busey, there is an assumption of the one-cent

increase over the year. to the extent we can work with the puc to bring that down, we can talk about that in the next item and next meeting. that would help to offset the deficit. we it knowledge the need for something at the puc, but we also are not in the best financial position ourselves to be observing cost increases. supervisor chu: thanks. >> some key assumptions to give some context to our projections. we assume every year current staffing levels and service levels, except for known changes, like implementation of health care reform. this does not represent new policy initiatives or increasing the city workforce. we are using our five-year plan assumptions as far as salary increases and health benefits. you want to be consistent with prior projections, with the report will come out in march. this includes the passage of

prop. see, that i will talk more about it a minute. it assumed that we increase our state reserve back to $30 million from the $15 million that was included in the past budget. was included when we decided to move forward with proposition d. -- g. because our revenues are growing, we are assuming we will not be able to withdraw from the ring in david reserve -- rainy day reserves. while we start with our lost up on balance we assumed in the current year budget, we have healthy growth and our tax revenues. $165.9 million next year. the year after, that is a good sign of our economic recovery, something that the mayor has talked about that he wants to make even more robust and speed

up even more with his economic plan. it is a good sign, a sign that we are out of the recession in the city. however, we do have a revenue loss is projected. particularly from the state. as i have talked about in previous meetings, reductions in the metical rate at a good hospital, cuts in laguna honda. other states, particularly at the human resources agency, other reductions at mental health, one-time revenue, various other changes. all in all, from this year to next year, the prediction is we will see a net change of $20 million in revenues, and the following year, $105 million in

revenues. the problem in our deficit is not a revenue problem is more -- problem, it is more a deficit problem. driving personnel changes, predicting $94 million in salary increases next year with expiration of our labor agreements. approximately 12 furlough days with the concession that was made in most labor agreement that are expiring. the assumption is if those go away, that will feel like a 4.6% year over year change in the cellar cost. we continue to see increases in health and dental benefits costs. this is not based on any actual information from the health services. you have not enacted on those rates yet. there are some kid is going on that health services from changing to a calendar year plan. we continue to see cost increases there.

on the retirement side, contributions are expended to grow by $33 million this year, 7 $6 million the year after. however, we will be seeing savings from proposition c, as well as from the agreement that we negotiate with police and firefighters, largely offset the next year, division costs. other changes result in a total personal cost of $112 million this year, $105 million next year. other city-wide cost increases include baseline funding increases, capital budget based on the 10-year capital plan. we assume inflation there pressures on our non-personal cost. assumptions about adequate funding, debt service cost increases, and our new general cost requirement that i mentioned earlier. on the department of side, a ton of things changing