essentially sub-contracts. at the time, we made it a mandate that was really drove the dow that they have to me that role. a lot of the sub-contractors took it to heart and a lot of outreach, the town halls at the library and get the word out. we were able to achieve a 40% local higher. supervisor avalos: that is great to hear. the 50% was the goal under the previous program. the new program is currently 20% by march 25, who you are well over it. that is great to hear, i want to thank you for making that happen. one of the things the new ordinance requires is that we

accomplish our goals by trade. i have some material that doesn't have been broken down by trade. i am sure there is fluctuation there, but can you talk about how we are hitting our numbers? carpenters, electrical workers, more? >> i cannot do that here because i can get that information for you. supervisor avalos: that's fine, it was just a curiosity so we can follow up later on that. it has been pretty solid, so i'd appreciate that worked. -- i appreciate that work. supervisor chu: if there are no questions, why don't we go to the budget analysts report. >> just as a further

clarification, as we understand this project, when this agreement was first awarded in 2006 as you note, it's for 1.65 million dollars. the cost has been significantly increased to over $14 million. as we understand it, and these amendments were anticipated as the work proceeds. that is not unusual. just in general, why these amendments took place. we don't believe that once the agreement was awarded, it makes sense to us that it would go to the same contractor to do those

additional amendments. we point out on page 4 of our report, we showed just a summary. leading up to the $2,374,000, on page 5, the sixth amendment would be paid from the available funds. we recommend the you approve the resolution. supervisor chu: are there members of the public that wish to speak on item number two? >> ♪ and you can fill our puc lives and make it turn out right to flood a million streams of emotion ♪ ♪ and you can fill our city lives and bring the budget

trhrough high tide ♪ ♪ like an ocean supervisor chu: thank you. >> good afternoon, i would like to speak in opposition to this resolution. when it was first proposed for this site, even though i wasn't here at city hall very much, it seemed to me that it was kind of strange that the city would be spending valuable money putting up a building for its administrators rather than using the money to provide services to the poor citizens. if i were at city hall at that time, it would have been a very good site for a high-rise dedicated to a senior citizen

housing and veterans' housing. i think it is kind of interesting that the city hall area late at night, not too many people around. if you were to put residential housing at that place, it might give city hall neighborhoods a more human feel to it at night. that is why i oppose this resolution, i think that this building should not have started in the first place. in regards to the argument that is supposed to be a green building, i would like to remind everybody that when the federal building opened up on seventh street, great aspects of that building came under notable criticism because basically, it did not work like it was supposed to. hopefully this building is going to turn out better than the federal building on seventh street.

we will ask for a few more million dollars which we don't have. supervisor chu: are there other members of the public that wish to speak? public comment is closed. supervisor avalos: motion to approve with recommendation. i also want to add that separate from this resolution before us, i am pretty excited about what this project means. it shows that without the requirements, it is still possible to make it happen. i support this project greatly. supervisor chu: will do that

without objection. will you call items 3 and 4. >> option for leveraging taxpayer dollars for financial institutions local economy. social responsibility language. supervisor chu: i do want to turn it over to supervisor avalos who is here for these items. >> good afternoon, supervisors, jose cisneros. thank you for the opportunity to

brief you. i like to spend a few minutes talking about how the work our office does to handle our city's money. this is essentially the savings account of the city for our everyday short-term moneys. right now it is averaging a little over $4 billion. the participants or the organizations putting money into this pool are the city as well as other enterprise groups like the airport, the san francisco report, the mta and other related local groups like the san francisco unified school district and city college. the city opposing general fund

represents the smallest portion of money. the way we invest that money is strictly governed by state law. it requires that we invest. first and foremost, the safety of funds we invest. second, liquidity. and given the difficult economic times that our country is facing, many of our deposits, in order for them to be as safe as we need them to be is actually invested in securities that are 100% federally guaranteed. about 90% or more of the entire multibillion-dollar portfolio is actually guaranteed by the u.s. faith and credit of the federal government. in addition to those criteria,

we have a socially responsible investment policy for investing our funds after we have met the state requirements of safety, liquidity, and deal. -- yield. we will take issues like community investment and compliance with city ordinances. i would like to inform the board the day that yesterday, we are immediately implementing community investment program are we will actually offer to make investments of the fdic guarantee limit into any of the local banks or financial institutions. that limit is right now at $250,000, so we will invest up to the amount with any other

bank or credit union or other fdic insured institutions. that covers our county pool description. i like to talk for a minute about the other banking responsibilities we handle in the office. supervisor chu: i had intended to have supervisor avalos share some opening comments. this is a good stopping point. we will come back to you quickly. supervisor avalos: thank you for being here, i want to thank you for your work on responsible investing. looking also at the rfp, including responsible investments.

we worked on that together as well as with the california reinvestment coalition. the will leverage the local dollar's into local economies, support small businesses, communities, how we can foster greater community development and it seems like you're focused on that as well. it is important, especially in these times that we don't have the global financial meltdown, that we have a response now coming from the constituents around the country and perhaps around the world about looking at how we can make sure that the institutions are more accountable to us. that is the thrust behind

today, to see how we can make sure we are getting as much bang for our buck, the banks want a partner with. i know we have other issues that are bigger than this as well. how we do our investments and build a pool of money is something we want to look at down the line. i think that there are measures you put in place here. it'll be helpful for us to be able to measure what these banks are doing in terms of supporting local homeowners. how we can be more effective than modifying loans, being able to protect ourselves against the economic situation we are all and the. i really want to thank you for that effort. we also have a report from the budget analysts office. lee will give a summary of that

we would just get a refresher on that as well. most of all, i want to be able to thank you for your work on this. there has been the other cities around the bay area that have looked at the banking services, looking at how they will be able to partner with the banks hope that will be more effective with local economies. i and as the context we are in. berkeley is looking at moving away from wells fargo as one of the banks that they work with. i think that is the context we are in as well. there are choices we can actually make based on information we are getting back from the banks. i think we always hear back from the banks, we do a lot of the

philanthropy in our cities, and i think that is great. we welcome philanthropy and it supports a lot of the non-profit organizations. the communities are in dire need of infrastructure, but it is not necessarily the effort being put in by those banks to actually change how they structure the local economy. it responds to the dire consequences of the mobile economy, but it doesn't necessarily help to change that. i'm looking at how we can create conditions to foster that greater change in our banks as well, so they can be effective trying to manage the economy more locally. not the panacea, but it is a good step in that process. you can continue on the presentation. >> thank you for your partnership on this important

issue. that was a good lead into what i was going to describe the next, the type of work we do with cash management and banking services operations. these services are spread across three different banks. most of our accounts today are with bank of america. we are a large city, a large organization whether we are a public entity or a for-profit corporation. we have currently 130 checking accounts spread across the entire city and serving for the different departments. the volume of transactions and cash is tremendous. upwards of $12 billion in transactions occur over these accounts. annually, as many as 10 million transactions per year is processed into these accounts. that is a large volume of business.

whatever funds come in on each day, they are swept right to that account and each evening deposited into the concentration accounts. this allows the city to take advantage of the deposits and not leave them sitting idly in the hands of our financial institutions. they become part of the county pool managers. the services that we contract for with these accounts are inbound deposit services where these institutions handle cash deposits, locked boxes, bank transfers, and bank wires. they also handle credit card processing for us. constituting 1 million and a half dollars annually, credit card transactions. they also handle many outgoing

payments whether they be through direct deposits, paper checks, bank transfers, bank wires. we are in the midst of going through a process to reconsider where we are going to go ahead this business for the city. this process is appropriate for us to release a list of our business periodically. we want to make sure we are getting the best products at the best prices as we handle this responsibility for the city. we have a consultant to help us to make sure that the procurement provides us with the best projects at the most competitive prices. we have engaged in extensive conversations with a large number of departments to determine what services are most needed and desired as we continue to pursue this procurement. and what opportunities can we take it advantage of in terms of either technology or products services to keep the taxpayers'

money save and to provide good service. upon completing the rflp process, we will be seeking input from both city departments and stakeholders as we put all this information and get ready to release ahead and start implementation. our goal is to move expeditiously on this effort, and we hope to release the rflp in the next few weeks. and receive responses and hopefully have a selection and implementation beginning well in advance of 2012. while this process is complicated, we must also keep in mind that implementation of any changes could also be quite involved. if we consider or end up looking at moving upwards of 100 different checking accounts from one institution to another, it will be a long and complicated process that we want to be sure that we handle carefully and

correctly. we have worked with a number of folks to bring social responsibility to the banking rfp. the tax collector's office has a long history of reaching out to the community and engaging in a number of financial education activities. we have launched a number of programs, he working families credit, the smart money network, the kindergarten to college program, and we have a long commitment supporting the community and providing social responsibility around financial practices. we want to make sure that this picture meant to reflect the values and the goals of the city and county of san francisco. with that goal in mind, we have consulted with both our internal city family stakeholders, the various city departments, yourselves and others on the board of supervisors. i am also proud to also

recognize that we have been partnering with, as you mentioned, the california investment coalition as well as the green mining institute pulling together these socially responsible criteria. to that point specifically, we are going to include a questionnaire, a set of questions that will ask each leading financial institution to share with us information with regard to these specific points. what kinds of employees they have in the city, what kind of branches they have, where they are located. what the participation has been in modification programs. what they have experienced in the way of bank foreclosures. what kind of crime and some prime lending. what their policies are on the real estate owned properties and what kind of bank lending are they doing for low income multifamily housing.

we'll ask about their experience with lending in this city and their contracts and practices with businesses in san francisco. we're also going to ask them about consumer lending products and services as well as community investments. the goal of these questions is to learn more about what the banks do and how they support our local community here in san francisco. in answering these questions, we will allow a financial institution to receive extra credit points in the escort through the banking rfp. we must remember first and foremost, the goal of the banking and cash management services is to select the institution that is appropriate in the meat or surpasses the fiduciary requirements in handling the city of the money. we want to make sure we are doing the right thing for the city and county of san francisco.

supervisor avalos: thank you for your presentation. i think it is really great, your consideration. another is a history as well with the fair lending working group. these questions that you have come from multiple sources and i know you have done a lot of homework on that. just on the response from the respondents, are they required to provide this information? you expect these questions will be complete? >> everything is open to decide what they are going to bid on, what pieces might be appropriate for them. this will be up to the financial institutions to decide what or how they will decide to respond.

what we wanted to do was provide an incentive for the financial a institutions to answer these questions. the goal was to make sure that the extra credit point will be sufficient incentive to get them to share this information with us. many of the services the we will be asking for might be equivalent coming from one or more different financial institutions. the incentive we believe will exist, should two or more banks provide some of the services we are looking for. the extra credit. could help steer the business in their direction or part of the business in their direction. supervisor avalos: would you say that these banks, would they be required to keep financial information if they have a requirement? so on a yearly basis, we will

expect to get reports? >> it is our plan to resell the said the same questionnaire from certainly the banks we contract with an essentially from as many banks we can get to work with us on an annual basis going forward. supervisor avalos: that as good here. we mentioned currently that the cash management services contract is actually going be bank of america, wells fargo, union bank. is there more than one bank? do we expect to have a greater pool of respondents? >> we're certainly hopeful that we will see a much broader pool of respondents. we are still crafting the r fp. for example, some of the things

we are looking at are actually allowing financial institutions to not have the bid on all of the various types of services we require, but maybe they can bid on one or another if they have specialty or capabilities in one area as opposed to all the areas. our goal is to allow for a a a broad variety and a broad number of financial and institutions to be able to respond and ultimately to give the city more flexibility and hopefully more options to choose from and evaluate as we are thinking about where we're going to contract to receive these services. to answer your question, our hope is that we will receive a broader list of things and we are currently working with. supervisor avalos: are you giving any special focus for local banks at all? we're looking at no

institutions, and the entirety of our transactions. is there a way to focus the process on a local bank that can have a piece of it? >> first and foremost will be making sure that whatever financial of institutions we work with and jews will be able to adequately service the needs we have. and we have a rather large magnitude of needs. at the same time, when we talked about the questions, we are asking exactly that type of information. what is the local presence, what is the headquarters, where are the employees based? things like that. supervisor avalos: when it comes to questions that we have to respond to about the makeup of their lending portfolio in san francisco, is there a way to

craft is so that noncompliance will be penalized as well if they don't respond? is there some way we can level the playing field to guarantee that we are getting that information? it is pretty vital for the city being able the plan for how we can respond to our economic situation. >> we are still looking at that, supervisor, but like any of the other questions that we asked whether they are about the fiduciary handling, we don't penalize someone for what they don't do, we only give them credit for what they can do. i think that what is best for us to do is to handle this part the same as the others. if the bank thinks that they can excel by sharing misinformation and be forthcoming, the opportunity to gain extra credit points and we hope will provide a good incentive.

i believe that it could be seen as a negative for that bank in terms of their possibility of winning summer or more of the business soliciting. supervisor avalos: great, i am hoping that we can get a good response based on future information that the banks can provide to us. if there is open is that we can guarantee, we can make further inquiries. it will be important to have. is that something you think can be built and? >> i imagine that we would certainly describe this questionnaire as something that would be a dynamic flexible document or inquiry that we would be able to adjust as time is able to have us accommodate. supervisor avalos: