portion of san jose avenue, the siting of which was a priority of the blue-ribbon panel. adjacent to the hospital, there will be a new pedestrian pathway that can next that st. jude cesar saba's street -- connected that street to cesar chavez street. they will conduct a new five- story medical building at the corner of cesar chavez and valencia. at the davies campus, cpmc proposes construction of a new four-story office building, also referred to as a neuroscience institute. the negative declaration was overturned by the board.

this is now being evaluated through the larger eir, and it will be back again before the planning commission. there have been no substantive changes to this project since 2007. onto the land use approval. there are many land use approvals required. this is a very, very high-level overview. there is a lot of detail and jon, but in general terms, it will require an agreement and an eir that will cover all campuses. there will be planning code amendments before the project and general plan referrals at all three campuses. there will be conditional use operations at all three campuses and approvals required at st. luke's and cathedral house, and there'll be several other things require that are not heard directly by the planning commission, including a conveyance for a portion of sand

is a avenue, the conversion of cedar to a two-way street, and caltrans approval, and with that, i will turn it back to can rich -- ken rich. >> as you know, staff has spent a very large amount of time working on this project, really in the last couple of years but really intensively for the past year. i want to spend a moment to talk about what we consider this such an important project. first, beyond this act, there is a state mandate to make hospitals say. we obviously want to have up-to- date facilities which will still be operational after an earthquake or other national disaster. second, the facilities constitute about one-third of all of the hospital beds. this rebuild project would include modernization of all of the facilities, and we believe that the project as proposed with a large, regional medical

center at cathedral hill, and a smaller community hospital at st. luke's, will help to meet the health-care needs of san franciscans. third, this would be the largest construction project that the city will see in the immediate future, generating about 4600 jobs, and last, the health-care industry is becoming a more and more important part of the city economy. this was recognized in the city's last economic strategy document. so to get to the development agreement, notwithstanding the importance of this project, the mayor has been clear from the start that the project only makes sense from the city if it comes with certain commitments for a set of public benefits. we will get into these specifically in a moment, but very broadly, they include a commitment to more health care for the poor and underserved, a commitment to save lives, a commitment to support affordable

housing, a commitment to local hire and work force development, and a commitment to strip -- to transit street improvements. as you know, this is a binding legal contract between the city and cpmc to codify these as well as to lay and remedies and damages if either party fails to live up to the commitments. once adopted by the board and signed by the mayor, these agreements can only be modified by further board action. at this point, i would like to turn over to barbara garcia from the department of public health, who will go over some aspects of the agreement. >> thank you, ken. good afternoon, supervisors. i am with the department of health. the health commission and the department of public health have been engaged on these issues

with cpmc for more than four years, so in order to advise the city, i thought was important to build upon the senate began work already done over these years by the health commission and the blue ribbon panel. so today, both myself and my deputy director, colleen, will talk about the issues around health care, but i wanted to provide a review of the history to illustrate the context of the agreement and then describe the key health care provisions on that. it is important to knowledge at the beginning that this is a seismically safe hospital -- these seismically safe hospitals will be very important. this includes our very own san francisco general hospital, on their way to meeting stringent seismic safety standards, and from a health perspective, this hospital building package, together with a proposed provisions which you will hear

about today, and it is one that we believe will contribute to the city's most vulnerable population, and we did agree that the hospital propose over 500 beds and 80 beds at st. luke's that must operate as cohesive and coordinated systems to give patients access to the care that they need on the campus where it is best provided to help beat san francisco's health care needs. in 2008, the blue-ribbon panel on the future of st. luke's was established to advise on planning efforts for the campus at st. luke's. the blue-ribbon panel was charged to create a viable plan for acute care hospitals and outpatient services on the st. luke's campus. the panel comprised of 31 members of the community, which held 10 meetings and two public forums over five months. their work resulted in the blue

ribbon panel report on the future of st. luke's hospital and included 11 recommendations. among the recommendations in the panel report, it included that a new acute hospitals should be rebuilt on 6 campus, that the size of the hospital should be appropriate and that the service mix should include standards of excellence in communities and senior health. on october 7, 2008, the health commission then passed a resolution endorsing the panel's recommendation. the help commission past two additional resolutions related to the rebuild of cpmc. in 2009, they supported the rebuild of the cpmc to have the best possible health plan of the city. this included agreeing to operate st. louis for a minimum

of 20 years, increasing the cpmc share of metical -- medical. and implementing the recommendations of the blue- ribbon panel. in accordance with the resolution, but also established a task force on the institutional master plan to discuss the progress towards the filling these eight recommendations. agreements reached and the task force -- with the task force led to a third resolution passed in march 2010. it memorialized agreements reached between dph and cpmc on those. it set specific goals for each of the eight recommendations, most of which were tied to the building of the two hospitals.

however, also included were immediate five-year targets for charity care and medical. the health commission has been monitoring the progress towards meeting these targets. in 2010, cpmc exceeded its targets two years early, and they specifically agreed to increase charity care from 5.3 million in 2007 to 9.5 million in 2012, and in 2010, they provided 16.6 million in charity care. cpmc had agreed to an increase, including uncompensated care, to 65 million in 2012. in 2010, they provided 75.9 million in uncompensated care to the beneficiaries. the three resolutions passed by the health commission and the work of the blue-ribbon panel at st. luke's provided this for the

priorities of the project, the long-term viability of st. luke's, to maintain st. luke's as an essential and vital part of the san francisco safety net health-care system and to ensure that medical responses provided are responsive to community needs and designed to provide long-term viability, so it requires, among other things, st. luke's to remain in operation for it least 20 years. access for charity care, to assure that health-care services are available for the most abominable san francisco population, this development agreement increases access to services for the low-income population. community benefits was also an area, to support low-income populations in the communities surrounding the cathedral hill and st. luke's campuses and maintain existing longstanding community partnerships.

at this point, i would like to turn this over to my deputy, who probably will be much more specific with the details on the health-care elements of the proposed development agreement. >> good evening, supervisors. thank you, director garcia. i am the deputy director of health and the director of policy and planning. director garcia discuss the long history that they have had on this project. also impacting the dph input on this was the passage of federal health reform, which represents a major shift in the future of health care in the united states. before i describe the health- care provisions of the development agreement, i thought it might be useful to review the relevant changes in policy stemming from health reform that also informed these discussions. as you are well aware, health

reform was enacted in march 2010. health reform takes a multi pronged approach to increasing the number of people will have access to health insurance. specifically, there is the individual mandate, which requires all u.s. citizens and legal residents with a few exceptions to have health insurance. health reform helps individuals comply with this mandate in a number of ways. for the lowest income individuals, it increases eligibility for medicaid, which goes by another name in california. for those with slightly higher incomes that are still considered low-income, it provides subsidies to help cover the cost of health insurance. it creates health insurance exchanges, which are online marketplaces, which will allow people with or without the subsidies to purchase health insurance directly, and implement health insurance reforms that helps people to obtain and retain health insurance regardless of pre- existing condition and with a guarantee of renewal.

some of the reforms have been implemented, but most of the provisions i just described become effective on january 1, 2014. it is anticipated that as a result of health reform, 92% of americans will have health insurance by 2016. i would like to focus now on the impact of health reform on san francisco and how that relates to the proposed development agreement we are here discussing tonight. according to the most recent data from ucla, which conducts a biannual health service statewide, approximately 117,000 san franciscans were uninsured for some or all of 2009. that was the year of the most recent survey. of the 117,000 uninsured, approximately two thirds or nearly 80,000 people will be eligible for health insurance as a direct result of health reform, whether it is through

employer-based coverage or public health insurance. it is important to note that health reform will thus reduce by 67% the number of uninsured san franciscans that will be relying on charity care services. of that 80,000, approximately 30,000 will enroll in medi-cal. some must be disabled or have extraordinary costs. health reform changes the significantly. beginning in 2014, all low- income adult citizens and legal

residents with incomes below 133% of the federal poverty level, which is about $14,500 annually for an individual or $24,700 annually for a family of three, will be eligible for medi-cal regardless of status. the human services agency, which is responsible for enrollment, anticipates that california will enroll 30,000 individuals beginning january 1, 2014. this represents a 23% increase in the san francisco current enrollment. medi-cal has typically had managed care and fee-for- service. under the fee-for-service system, beneficiaries receive services from any medi-cal

provider. they are paid for and it service, including an office visit. while the fee-for-service system provides patients with the ability to choose any participating provider, the system also creates unintended impetus to provide more services, not necessarily better managed services. in this, and there are providers within a designated network provider group in the plan. while patients must limit their plan to providers within the network they choose, they manage patient care to promote quality and better outcomes. in an attempt to increase quality and reduce costs, the state is moving away from fee- for-service medi-cal and team managed medi-cal. those and san francisco are currently uninsured but who will become eligible for medi-cal in

2014 will be required to enroll in managed care. in san francisco, there are two plants, the san francisco health plan managing care for approximately three-quarters of approximately all medi-cal, and another covers the remaining. once the beneficiary chooses a plan, they then choose a provider network. both health plans offer several provider networks to choose from. each provider network is composed of a primary care provider, which could be a community clinic or a physician group, and its affiliated hospital partner. these are one-to-one partnerships established between the parties and with the health plan. this team of providers assumes an ongoing responsibility to provide all the covered health- care services that a member needs in exchange on the fee per month regardless of how frequently they use the

services. to meet the needs of these 30,000 new individuals that will be eligible for medi-cal in 2014, san francisco will mean a number of providers who are willing to participate. that includes the background portion of my presentation, and now i will go on to the key provisions of a proposed agreement. this will reduce the need for charity care and increased reliance on medi-cal care. it in colubrids the blue ribbon panel and the health commission. do began, i would like to discuss provisions that relate to the care for the low-income and others. this proposes that they provide care for 10,000 of the 30,000 new beneficiaries.

cpmc would do this with partnering with at least two partners, to provide hospital care at the cathedral hill campus. there are accounts for one-third of the anticipated 30,000 new beneficiaries, which is the same as the proportion of all hospital care. this provision was crafted specifically in response to the shift of individuals from being uninsured and reliant on charity care to being insured as participants in the managed-care program. the next provision requires that cpmc continue to provide care for the poor and underserved, and it includes three things. charity care, which as you know is without the expectation of reimbursement, the un reimburse

costs of caring for medi-cal patients, and other care -- those that reimburse costs of care for medi-cal patients. this baseline will adjust each year in proportion to the overall inflation and the financial position of cpmc. it is expected that the measure to be used to determine the financial position will remain relatively stable over time and will exclude capital costs and thus not be affected by costs related specifically to this rebuild. it is important to note that every other provision is over and above this continuing commitment. as an example, annie unreimbursed costs of caring for the 10,000 new medi-cal beneficiaries will not be counted as part of the space by but rather will be counted

separately, and there are provisions that these be maundered separately. this provision recognizes that the health reform will reduce the number of uninsured to rely on charity care services, it will not eliminate it. the need for charity care and other care for the low-income population will remain, which is why the maintenance of this base line commitment is an important part of the development agreement. finally, the agreement will provide for an annual grants for community-based primary-care clinics, specifically those serving the tenderloin, western addition, and south of market neighborhood that surround the cathedral hill campus. these are intended to build the infrastructure and capacity of clinics, including to participate in the managed program as a partner with cpmc.

this slide provides information on the provisions that relate to the future of st. luke's hospital. first, the proposed development agreement requires back cpmc open a seismically safe st. luke's hospital. it includes proposed construction milestones to ensure that progress on saint luke's continues to move forward and is not adversely affected. , and under this provision, they will continue to operate this with an acute care hospital with at least 20 years, provided that this remains financially solvent. this is still being negotiated. this is to assure that this truly reflects things.

third, this is to assure that st. luke's is meeting the needs of the communities. and it would require that st. luke's be operated as a full- service acute-care hospital with an emergency room. there is senior and community health. there is the management of chronic disease to prevent unnecessary hospitalization. this will assist in the transition to home and reduce unnecessary korea missions. the final provision related relates to the medical office

building. the proposed to develop an agreement requires cpmc to have this office building as a part of the process and would require that the building be there. the intention is to assure that the project is sustainable. the medical building will be built. the nursing facility beds in san francisco. laguna honda is an example that you're likely familiar with. this will provide medical care and rehabilitation services in a residential setting and is the highest level of care that elderly and disabled patients

can receive outside the hospital. skilled nursing care services are referred to as beds. cpmc provide this for over 30 patients. currently, approximately 62 patients are receiving skilled nursing care at st. luke's. the st. luke's is licensed for 79 skilled nursing beds, the average occupancy rate for 2010 -- excuse me, for 2010, the last year for which there is publicly available data, it is 62 beds and thus the 100 total. cpmc is not proposing to include more in a hospital but will instead add 62 new beds in san francisco. these new beds, these will be new beds, not simply existing beds transferred by another provider for this purpose, and

it will thus maintain the overall ability -- availability of skilled nursing. with the exception of those that have medicare and/or private insurance or medi-cal. cpmc under the proposed agreement will create something for the tenderloin resident. many tenderloin residents have complex health-care needs. they may be homeless or be in need of mental health or substance abuse services. this will be designed to help them transition from a hospital and to successfully link them with care and treatment services they need to remain healthy in the community. this concludes our overview of the health-care provisions, which were designed to address those issues that director garcia mentioned earlier. the long-term viability of st. luke's, access for charity care and medi-cal patients and other. i will turn this over to ronda cements to discuss job creation in the agreement.

-- turn this over to ron this simmons -- ronda -- >> excuse my cold. i have a bit of it tonight. the first is job creation as relates to construction, and to let you all know that this project is private, so it kind of falls under more of a hybrid of sorts. we have attempted to use some of the language there. this project is also subject to a project waiver agreement that was negotiated through cpmc and the unions. but we have gotten a commitment from cpmc for the following to be an addendum. it will adhere to 30% local hire, measured by construction trade hours for the project overall for each contractor and

by each trade. 50% local hire for nude, and tree-level administrative and engineering positions and internships, 50% of all new apprentice positions filled with graduates from our city academy. we will work with the contractors and unions to maximize the additional 50% with local residents. the remaining 50%. excuse me. contractors will notify them of all of the apprentice openings, and city will refer san francisco residents and apprentices registered with our work force system through one- stop and cbo's the we have contract with through the overall system. and manage apprenticed to the journey level status by the end of the project is one of our key goals, given the length of this project.

for the in use side, we have negotiated at least 40 permanent entry-level hires per year over a five-year period. just to give some context, we actually had a working definition of entry level that had entry level defined as any position that would require a two-year degree or less, so they were non epa positions, and just to give further context, i think -- and here they were non ba positions, and their records indicate that about 70 per -- 70 of those fell in this definition of folks that were defined entry-level by a two-year degree or less. the requirements will roll over yearly, with a minimum of 200 re