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 hires in five years or until the requirement is met, so in other words, with in the first year, only 30 hires are achieved, the

other 10 would roll over to the next year, so the number rolls until we reach the 200 goal we set. the specific targets of residents are in the western addition, tenderloin, mission, and outer mission, excelsior, and chinatown neighborhoods. in addition, the job training dollar amount is $2 million. we will use those funds to provide support services, a case management services, and additional training needed to while pinscher folks are able to achieve the goals that we have laid out. i think that concludes my portion of it. thank you. i am turning it over now.

>> good evening, supervisors. thank you for giving us an opportunity to provide an update on the work. i am here to present on the housing package as is included in the development agreement which ken alluded to earlier. i am sorry i did not introduce myself. i am old and from the mayor's office. in proximity, working closely with staff from the mayor's office on housing, particularly the executive director, who could not be here tonight because he was called off on jury duty. excuse me. there we go. the house in public benefits package consists of three major components that will fund the city and replace the 25 units that will be demolished as part of the construction of a medical office building kitty corner to the it the broyhill campus. number two, substantially fulfill the exclusion, and

number three, providing housing benefits for cpmc work force income category. cpmc is demolishing 25 units to construct their medical office building across from cathedral hill, and more specifically, that site is located on, i believe, the east side of geary and van ness. 20 are single-room occupancy residential hotels, and the other are rent-controlled units. under the conversion ordinance, prior to demolition, cpmc must either rebuilding units or pay a fee equivalent of 80% of the cost of replacing them. they have decided to make the payment in lieu of construction. while not legally required under existing planning code, cpmc

will also make a payment to the mayor's office on housing affordable housing fund to offset the demolition of the five units. roughly one-third of these demolished units were occupied by residents at the time they were acquired, and these residents were low or very low income households. i am very happy that they have entered into a generous move out package, and it includes roughly 10 years of rent subsidy, relocation assistance, and up to six months of time to locate a new unit. this has been memorialized in an agreement between them, and most households have already relocated, and these agreements will not be part of the development agreement, because they are designed to be privately enforced by the parties. cpmc will make a payment to the

mayor's office on housing that will assist ed least 325 low and moderate-income san francisco households. the spending that is designed to address two impacts. this is a specific slide here. the housing panel will lead to the construction of at least 190 permanently affordable rental units. this was offset the vast majority of inclusionary units that would of been required under the van ness special use district, as i mentioned earlier, and these units will target low and very low-income households in san francisco and will become part of the permanently affordable san francisco housing stock. the second component of the housing payment to the mayor's office on housing will provide at least 135 down payment loans, such as cpmc households seeking to buy a home in san francisco.

this will be limited to people in the work force income category. employees cannot buy homes that and subject to an alice act in the last 10 years, -- subject to an ellis act in the last 10 years. there is also a share in appreciation, based on the split formula used by the mayor's office on housing and the current downpayment assistance loan program. these recaptured funds will then be diverted back to the mayor's office affordable housing funds and will help complete destruction of the 190 units i mentioned previously. finally, while cpmc will make payments, they will be subject to a payment escalation factor. thank you. >> so we are in the home stretch now. we are almost done.

president chiu: supervisor wiener, i know you have a question for him. >> in terms of the breakdown in terms of the housing fund, the work force housing, what does that mean as you define it? >> the income category that we would be referring to is a moderate income housing, which is roughly 80 to 120%, and just to be very clear about that, that is a category broadly. because we are still in negotiations, we have not reached a final agreement with cpmc as to what the breakdown would be, but it would help the cpmc household in that range. >> so the moderate-income work force housing, would that be limited to downpayment assistance, or would that also

be rental? >> that program would specifically target downpayment assistance for home ownership. supervisor wiener: ok, so are you envisioning the rental aspect of it would be limited to lower-income >> the rental aspect of it would be limited to lower and very low-income households, as i laid out before, and that peace will be taken care of by another portion of the payment that cpmc makes to the mayor's office on housing. supervisor wiener: if you look at this number, it is not exactly rolling in it by san francisco standards. buying a home is still challenging in the city. i am wondering what the rationale is. >> well, so, the basis for the affordable rental