services, interpreters who come to the board to help members of the public who have limited english speaking ability. the remaining 2% pace for materials and supplies. our postage and office papers, things like that. this year, we are experiencing another in a series of years of revenue shortfalls. very much aligned with the economic situation in the country. while, of course, it is never good news, it is smaller than in years past. i am optimistic about it. in 2009, we saw a year-and 16% revenue shortfall, 2010, 9%. last year, it was 6%. if we continue as projected, we will have a 3% shortfall by the end of this year. it is getting more manageable. i think we will end the year with about $27,000 short of revenue. i do think we will be able to cover that with reductions in

our expenses. our budget should come in with a significant amount of money left over at the end of the year, largely associated with the city attorney work order. so far, we have only spent -- the first half of the year, 14% of that allocation. i suspect that trend will continue to some degree throughout rest of the year. the other work orders, the tv work order, we should also see some savings because those charges are largely associated with how frequently and how long our board meetings are. if we have shorter board meetings, which we have had throughout this year, we are not paying for as many hours of sfgtv's wonderful services. we don't need to pay for as many hours of it. other expenses also, we will see reductions because of lower appeal volume. some of the costs associated with getting those neighborhood notification labels and other materials and supplies go down when the appeal volume goes

down. we will also see small savings in personnel costs largely because we have one member on our staff who is out on leave and will be out for half of this fiscal year. so, i think we will have a surplus at the end of thexd yea, but i don't -- even if our expectations about expenses and our projections about revenue are dramatically off, which i don't think they are, the mayor's office has indicated that they would provide a general fund allocation if we end the year with any kind of a deficit. moving on to next fiscal year, for 2012-2013, looking at expenses first. it is a bit challenging at this moment to predict what the operating expenses will be next year. it is largely because of the fact that their labor negotiations going on right now, and those negotiations cover all of the union's that are affecting the employees in our department.

with salaries being a large portion of the board's operating expenses, we need to see what the outcome is of those negotiations to really know what those expenses are going to be for the coming year. there is some preliminary data that suggests there'll be an increase of approximately $27,000 in those line items, about 19,000 of that having to do with salary, largely associated with the expected removal of the furlough program that has been helping the city save money the last couple of years. another $8,700 in increases in fringe benefits associated with increases in retirement and health services costs. again, these numbers are likely to keep moving over the next couple of months. we will likely also experience an increase in technology- related costs. looking at the department of technology work order, most of what that funds is labor. we are paying for the services of individuals who are either helping with the broadcast of our meetings or helping with the

support of our computers and things like that. when labor costs go up, that work order increases also. we expect that will go up. the board will need to enter into a contract for support and maintenance of its new data base. it has been developed by the department of technology, but they are not in a position to support it. we will need additional funding for that work. i am in discussions with the city's committee on information technology to see if they can provide us with financial supportç so we do not have to assure all that. we're looking at an increase in spending -- expenditures right now. that is subject to significant change over the next few months. i don't think that there's going to be a significant change in our revenue, at least not given what i know of as far as the economy. it does not seem to be changing with great speed. i think that our ability to generate revenue will likely be fairly consistent with how it

has been this year. there might be some realignment of the church -- surcharge rates that are necessary. if there is a significant shift in the department's coming before us, and we have seen the department of public works has not had an uptick in the number of appeals, year-to-date, i think it is up 22% from last year. there might need to be some shift in which departments;' surcharges bear the revenue. the deadline for submitting that information to us is april. the controller will be able to do its final analysis of our rates are around that time, and we will have more information. my recommendations to how we approach next year's budget is three-pronged. the need to implement each one dependent upon the amount of the increase and projections that we get from the surcharge revenues. the first one being that we offset new expenses by a reduction in the city attorney work order, with my main goal being to avoid any increase in the surcharge rates, and

therefore deflect in the impact of these increases on members of the public. i think there is some room to cut in that work order. we have seen savings last year, about 57%. we ended with a $79,000 surplus in that line item. there is only a 14% utilization in the first half of this year. we have only had a work order with the attorney's office for the last four years. we don't have a whole lot of information about what our utilization as. it looks like, on average, if we look at those four years, including this year, that we spend about $110,000 with them per your. that goes up and down depending on how long the meetings are, how long the deputy city attorney to be here, how complicated, whether there are new items that are before the board that require research or complex matters, so i think it is important to keep a cushion in that number. i do think there is room for reductions.

i think that, as the economy begins to improve, we will see an uptick in that utilization. we want to keep that in mind. i do feel comfortable if we were able to reduce that line item by $45,000. my second recommendation would be to apply the rate of inflation to the surcharge rates if the reduction in the city attorney's work order is not feasible to reduce with enough to cover the operating expenses increased. the rate of inflation minimizes the impact on the public. if we use cpi, we're looking at a rate of 3%, and if we apply that to the current surcharge structure, no rate would go up more than $1. that could generate an additional $30,000 in surcharge revenue if we keep the surcharges the same as they are now. i think those two recommendations, could generate

enough revenue for us. if they don't, then we would have to look at legislation to increase the surcharge rates beyond the rate of inflation. i am not recommending that we make reductions to other expenses or that we raise the filing fees. i don't think it is recommended to raise the filing fees because we did that a few years ago and applied the rate of inflation after many years of leaving them alone. i think not only with another increase be too small to really net as much additional income, but additional increases in those fees could place a burden on the members of the public that come to the board, might create a chilling effect for people to file appeals, especially now that there is this difficult economic climate for a lot of folks. as far as reducing other expenses, only five people on staff. i would not recommend that we reduce personnel costs. that would mean either reduction in somebody's hours or

elimination of the position. it seems we need all five people in order to fill the mandates and keep the doors open on a day-to-day basis. other than the city attorney's office, i don't think it makes sense to reduce some of the other line items that we have with city departments. the i.t.-related expenses, we could see a year-and surplus and some of those items, but starting the year off, if we don't know how long the meetings will be and we don't know what our needs will be, i think it is better to keep that work order intact. if there is a year-and surplus, typically we can carry that over to the next year to help offset any revenue shortfall. then, other operating expenses, again, appeal volume is lower than average. we can recoup some savings in those line items. i don't think it is smart to start the with a reduction since we don't know how many appeals we're going to receive and how

much need we will have for the various services that those fees paid for. that is what i am thinking of for next year. for the following year, i don't think that the board will expect to have any new initiatives that would increase its operating expenses. i do think there will likely be some other increases that we will have to absorb. depending on the outcome of labor negotiations, current projections are suggesting an increase of least $21,000 associated largely with the employer-side retirement rates being increased. we will know more about that once we know what the outcome is of the labor negotiations. again, to the extent practicable, i would recommend we try and offset any increases by reductions in our orders or elsewhere, and if not, look at the increases to the surcharge, either through cpi or through legislation.

that is my suggestion. i would be happy to entertain any questions you have. >> as a follow up to last year, and by the way, it was very concise, and i do not think there are too many questions, but last year we talked about making sure there's enough technology in the office to be able to support yourself. >> and we haveç been able to replace the computers that needed to be replaced. there is our program. we have been lucky enough to have that supplement the cost of the computers that need to be upgraded, and we are continuing to work on this to streamline

some of the reports we need to generate and hopefully reduce the amount of paper we need to get the appeals through the system. good >> we have a fax machine? >> we got a fax machine, the scanner. >> the other one was a little more of interest. when i look at the filing fees, where do the food trucks come in? >> they are dtw permits, so they cost $300 to file an appeal of dpw permit. now >> how about now reservation? we have only had one -- how about a reservation? we only have one. >> that fell under preservation. tracks in the surplus, as the

control back into the general fund -- >> in the serv plus, does that rolled back into the general fund? >> we were able to roll back some function of it, but because we have a history of growing from the general fund, -- of borrowing from the general fund, we are still paying them back, so we do not get to keep bacteria and we have had a discussion about the reserved signed for future years if we are dealing with deficit triggered >> i would recommend that. if we are running a surplus, it would be nice, and i the it would fit that it would stay with the apartment your good and -- it seems it would fit if it would stay with the department. there is a wide range.

is that historically how it has been? these vary so much. good >> when they were increased a few years ago we apply the rate of inflation from the last time they were increased so they stay proportionate. my understanding is this breakdown is related to the level of work they would expect the board to engage in, the complexity of different matters. whether or not that is true is subject to debate. >> is the rehearing request low compared to some of the other fees?

>> there is a lot less of those. there is less paperwork. there is no notification requirement, so we are not spending money to do the mailing, so there is less work and less cost. >> can you file an appeal online and do the work online? >> no. >> are we trying to head in that direction where we can? >> we are heading in the direction where we can allow some of the form's online, but we have not been filing appeals online. there is a complication in terms of payment. it is not insurmountable, but the desire we have had to give people to explain the processço make sure they understand what they are getting into and what the requirements are and what

they can expect from the process. those are of value, and it would be difficult to give those up. parks commissioner hillç -- >> commissioner hill of the building department says you cannot file online. somebody was complaining to me, they were filling out a transitional use application online, and they have not quite finished. they got close off and lose everything. sometimes technology does not work that way. it was very helpful to erode -- helpful to me. >> how many people drop out as a result of having things explain to them and the costs involved?

>> some people drop out because they are not in the right moment to appeal something, so we help them understand why that is and what they can doo instead during the others, you are the one that deals with the public. the you have an idea of a percentage em up cracks in the old days, -- do you have an idea of a percentage? >> in the old days no one cared about cost. now people to treat about 1753 good -- now people shreaik about 175.

we tell them, and we are not going to lie to you. it is an uphill climb. you have the burden of proof. you have to do homework. you have to repair it yourself, and we cannot help you, and people say, i do not want to do this. >> we pencil it out for them, and it helps him understand what they are spending to file it, and they may or may not agree to it. >> do people understand if they come to us without the benefit of attorney the board would spend over backwards to help fund -- to help them, or do you tell them you are mean? >> we call them and we are mean and a horrible, board is not a court of law.

we explain the board is to help people, but you need for out of five votes. i need these commissioners to side me -- to side with me, and that could be for any person. some people think they can come in and file the appeal and walk away, and not even show up to the hearing, and we will sign it and send them a letter. some people think that is how it works, but when we explain it is more involved than that. other people do not know we suspend dept. boa action. and now they do not want the animosity with their neighbors. all sorts of issues come up, and that is why we enjoy talking

with the public. good i would not want now on line of appeal. give we like to talk to the public -- we like to talk to the public and let them know what they are getting into. >> it would be nice if people could reserve their right to appeal by doing something online by saying you do not have to be there a certain date, and indicate to two or three days from that date. >> i understand, but we are probably one of the few departments in the city that actually picks up the phone. try calling some city departments. you will never get a live person. >> i just called. i was on hold for 10 or 15 minutes. >> it is not that you cannot reach us. we are always available. you might not get the time slot

you desire, but if it is your last sunday, we will accommodate you. >> we let people know they and send an agent if they have difficulty getting to us, but i would be concerned if somebody cannot put down their money, via we might get people using our system in ways that are not necessarily genuine. >> these to fees, i am going to assume as we have the right to raise the fees, even if the cpr were to go up, -- cpi were to go up, we do not necessarily have to raise fees. is it increases, it obviates the need to raise fees. >> those of the fees were not

touched for many years, so i do not think they were of reduced, but there is knowno reason why e board cannot approve legislation to regard those are usually tied to the larger projects. -- why the board cannot approve legislation. they are usually tied to the larger projects, typically more involved in projects that are more expensive. typically the projects are for people who are seeking a lot of money into the project. >> when you make projections as to what next year is going to be, is it going from 6 to 524 bowman -- to 5 to 4? >> not necessarily. we get data on what they expect

the volume to be in the coming year. the comptroller's office has information on data. as far as the fees, and that number has basically stayed fixed for several years. >> can i add a comment on that? there was a general opinion on this board that given its function as a court of last resort, the fees should be kept low to allow people the option to be able to appeal, and when you look at these numbers, there are financial impacts on a lot of situations.

it is starting to reach a point where it cannot be returned to the department of appeals. good evenini think we should bel about that. if it is a surcharge, i can understand that. that is part of what your building, but on top of that, forcing a significant need to file an appeal is probably against the overall purpose of our board. goopraxair my wrong in thinkingf you are a neighborhood association you do not know -- >> am i wrong in thinking if you are a neighborhood association you do not pay fees? >> you are wrong. >> it seems like people have real problems to come before us.

>> we do have a waiver as part of the board's rules, so if people meet the criteria, they are eligible for that. >> you mentioned several unions are involved in. which unions? >> international federation of professional, technical engineers. also mea management employee association. >> i think it is my last question. did having to do with the two- year budget have anything to do with it, or was it an official? >> i think neutral. because how limited we are, i do not find it to be a challenge.

i know if we had riots, it would be more of a challenge, but we have a system that really creates our revenue and expenses. >> i wonder if there is a grant that would attenuate our costs, someone interested in promoting good government that has processes where the citizenry can have their voices heard. i am sure there are lots of people who have problems with some situation and do not come because they see the fis. >> if it makes you feel better, planning has raised their fees to over $500. we are a bargain compared to the planning department. >> cannot be appealed to us?

thank you 3 much. i have no more questions. does anyone else have questions? i thank you for your efforts. >> i should ask for public comment. i see none. is there a motion? >> are moved to adopt this budget for the upcoming two years. >> we have a motion to adopt the budget for the next two fiscal years. [calling votes] the motion is 3-0. this budget is adopted. >> there is no further business. >> thank you.