continue to pass the tax increments there. for the market area, there has been a lot of progress with the city and mayor's office. we are always additive to that to provide affordable housing stabilization, other public improvements. that was not a remodeling project area. we have touched on this. our work primarily in the bay view was of a more community revitalization, facade improvements, business attraction. we will continue our work that we previously funded. in terms of new redevelopment dollars, there are no new redevelopment dollars that we

would continue under the successor. >> with regards to the areas where there are not enforceable obligations with the market and the street, can you just explain what the process is going forward? i could imagine that there is probably some conversation with the mayor's office about how to proceed in these areas. >> that is correct. we are talking to the rest of the city. both with the city administrator, the mayor's office, public works. all of the relevant departments to continue this work program. redevelopment dollars and important tools in particular on the third street corridor. they are always leveraging dollars. it takes every last bit of local, state, and federal money. our dollars are quite additive. it worked out with financing.

it has been an active conversation with our community partners in each of these areas on how to continue these activities. in light of the dissolution of redevelopment. you will see that through the department budget. to give you a big picture of staff and redevelopment, as of january 1, there were approximately 101 staff through this process. and this was on february 1. through that process, we retained 66 positions. 37 were within the city administrator's office. 10 of those positions given the scope, were retained by the

office of housing. nine of those positions were retained by the board. there were 40 layoffs that happened that as of march 30. then there were a number of individuals who decided to move on, whether retired or separated. touching on staffing, the employees were represented by two bargaining units. bargaining is ongoing. there were preliminary term sheet agreements were reached as of march 30 s. folks are quite pleased on all sides. that gives you the lay of the land as to where we are in terms of staffing. >> the defense is being capped at 9%.

will this cost go beyond the 5% tax? >> i will move to the next budget slide to talk about where we were before and where we are going. ab 26 puts a 5% cap on administrative costs. that 5% is just for this current fiscal year. on an administrative basis, this drops down to 3%. the maximum of noncallable for purely administrative spences is 3%. taking a step back, the improved budget last year, which is our current fiscal year, we have approximately $126 billion as part of our approved budget. we had a number of fixed costs,

things that are knowable and we would expect to remain the same going forward. these are statutory pssthroughs. the city and county of san francisco is the largest recipient of those. then it goes to the school district and city college. we made them last year and we make them this year. the redevelopment agency, making those payments. the comptroller's office is now mandated to make those payments. it gives you a snapshot of approximately $40 million. >> what your saying is 5% of the stocks >> and $40 million is just the pssthrough payments

that come off the top before the taxes are distributed for these obligations. once the controller's office makes the payment, then the city and county gets its share. >> the 5% cap is fine. it actually gets passed th rough to the city? >> this is to be used purely for administrative costs. >> is this before or after? what is the after amount? >> it is approximately $3 million. >> does this fit within the dollar amount or will we have to

escort some of the costs out of the general fund. >> all of the obligations we describe where personnel costs associated with those obligations. ab 26 says that those are obligations. it is a little but of an apples to oranges comparison. we expect to still be within that framework. >> some staff has been working on obligations. >> is purely administrative. >> they are helping to wind down agency activities. >> the staff are captured with

the obligations. >> i understand that. they are capped at 5%. we are living within those means. are we going to have to add to the cost of the fund? >> i believe we can live within our means. it is a process. the state still leads to review the obligation payment schedule. although our oversight board has unanimously approved it, there is still a level of state review that is subject to change. >> there is a level of estimating that we are prepared to do. this list is approved by the

oversight board. >> that do supervisor kim. commissioner avalos: just a question on the other staffing light out. for the transition of workers. francis dang to new jobs within the city and county -- transitioning to new jobs within the city and county? >> as of march 30, there were 40 layoffs. we concluded bargaining on a number of term sheets. it was agreed upon term sheet. it provided for a comprehensive package, i don't want to step on the toes of what we can and can't say.

the budget director to standing up. >> the city has been working with labor to come up with an agreement. we are still in negotiations. part of the agreement that we are moving forward with relates to the service rule changes. our director is exploring whether there are any opportunities to allow for folks at the agency to have additional opportunities within the city. my understanding is that the city has provided transition support for individuals who were laid off. information about how to apply for jobs within the city and

certain employment counselling. >> thank you, supervisors. >> i would like to ask for the director of the mayor's office of housing to touch on that. and then we will close. >> good afternoon, supervisors. based upon the actions taken by the board, the housing assets were transferred to the city and under the jurisdiction of the mayor's office of housing. that transfer was recognized by the oversight board as part of this process.

they oversee those assets. they will continue to go to the oversight board. the oversight board's role is fiduciary. if there is a funding of a project with new increment or modification of a loan agreement based on tax modifications, that would have to go back, first through our loan committee process. there are a number of enforceable housing obligations in this transition. the director talked a little bit about the redevelopment project areas. within those approved project

areas, there are current and foreseeable obligations that are related to affordable housing. all of those contracts were identified to the state as on going eforcable contracts. there are additional costs in the recognize obligation payment schedules as well as other housing transaction costs. one of the processes, in addition to the approved projects top the recognized obligation payments provided for the replacement of housing loss during the early part of redevelopment.

in addition to the 3 approved redevelopment projects, the fourth major activity that the oversight board submitted to the state was the replacement housing obligation. this was approximately 6700 units that were demolished and not replaced. 6700 affordable units that were demolished and not replaced prior to the development housing obligations. this is the legislation adopted, first that the state that would allow redevelopment agencies to

continue to collect taxes solely for the purposes of replacing that housing. the board of supervisors passed specific legislation for each of the project areas that would allow the redevelopment agency to continue to fulfill that replacement housing. at this point, the redevelopment agency has replaced 900 units of housing under this obligation. it is a state law as well as an agreement based upon the resolutions and the ordinances of the city. that is an obligation that we conveyed to the department of finance for their review. >> i know as we transfer,

redevelopment has a slightly different policy for and come requirements. does moh plan to integrate this policy? >> that is an excellent question. we are talking about the differences between the two programs. in terms of how we will administer the program, the task is taking a look at the two to identify the differences and see which is best moving forward. we will conform to all of the agency procedures the best that weekend. some are related to the redevelopment plans. the mayor's office will

continue to abide by those requirements. the affordable housing was always consistent with the city's overall consolidated plan. we will continue to at try to create affordable housing. it continued to provide for the housing needs within those project areas. as the redevelopment agency had before. they will be governed by the remaining redevelopment plan. the redevelopment plans do not go away. we will show this additional increment as we receive it based on those plans. this housing obligation is another basis for planning additional deposits of tax

increments. among the replacement housing, the replacement housing can be done throughout the city. it does not have to be done within a specific project area. it can be done throughout the city. one of the projects identified was the hugo apartments that the agency acquired by eminent domain about two years ago. it is working towards entitlements and hopefully with the approval of dof we will be in construction within another year or so. it was a major project of the south of market redevelopment plan. it is a key project. it is a gateway to san francisco

for those coming off of the 280. it was basically a blight and was not being productively use. our hope was that that would continue with the well thought out and accepted plans to demolish and replace that affordable family housing. >> among the processes that we had to go through, look at what was in the fund at the time of the solution and what projects could be developed from what could be incumbered or will be

uncovered. among the projects that were in the pipeline at the time of the solution that did not have enforceable contracts but have identified the redevelopment agency acts as priorities, the intent of the mayor's office is to continue to complete those projects. they were created to meet certain community goals. the labor department is one. the housing rebuild as another public project. the third street theater, which is the first phase of the rebuild. there is a habitat site. these were all in the works prior to the dissolution of the agency. we will continue to work to get

these projects to fruition. below the listing of projects, it gives you a sense of what the pipeline looks like in terms of meeting the housing obligations of the former redevelopment agency and how we have to continue to capture the and permit from those project areas as well. to actually put a dent in this pipeline. again, this just restates some of my earlier testimony. the majority of the funds were already uncovered. this was approximately $200 million. there was $60 million or $70

million that was encumbered with contracts. the balance of those were not committed, but clearly reserved for projects. we would not want to proceed with the project unless we have the money in the bag to go forward with the project. we are making the argument that they are committed and are necessary to meet other obligations. some of that money was matching federal money. one of the things, there is so much uncertainty with how the state will review our obligation schedule at how they will treat the remaining balances. there is a lot of great advocacy at the state level to make sure that the money that had been reserved stays for affordable

housing. we are part of that advocacy with dof and the governor's office to make sure that the money that was intended to be spent on affordable housing is spent on affordable housing. there is great uncertainty about whether the department of finance has the last word on how the money gets spent. they are in the process of reviewing the obligated payment schedule. in terms of the staffing, we are moving 10 positions over to the mayor's office of housing. we will be incorporating those positions and to our budget that we will be submitting as part of

the june 1 submission. one of the things we are looking at in terms of staffing and the ongoing work as we are looking at the pipeline for the ongoing work. to try to be sure that we will continue to have a healthy pipeline of housing above and beyond the projects that we have identified. i think the state assumed the redevelopment agencies would stop and our work would end. our goal is to not to complete the projects initiated by the redevelopment agency, but try to continue the projects. also, in terms of replacing the house and lost in the 1960's and 1970's.

>> whether under the successor agencies with the affordable housing obligations continue beyond just be on those obligations, these are critically important to the city and the region and the state's long-term health. provided for economic development and revitalizing our neighborhoods. this is not just good for the city, but the region and the state. how do we move forward? this next level of review, we are under a process. the oversight board unanimously adopted this obligation schedule. next up is for the state to weigh in and recognize those obligations. we go through this exercise every six months. it is required under the state

legislation. the city comptroller has an importance role. our controller has hired an external auditor. there is and audit of our books that is under way. the external auditor's audit has to be complete by july 1. we are preparing for a budget submission. that would provide for all of these obligations and our move forward in terms of economic revitalization as part of the budget you will see shortly. that concludes our presentation and we are available for any questions you may ask. >> thank you. it sounds like you pay a lot of attention to the handling of the

business side of this transition. i am curious to hear some of your thoughts on the people side or the community in particular. one thing i have got heard is the art rich strategy to communicate with people. the loss of the redevelopment agency is most severely felt. there has been a lot of conversation. there have been very that'll answers. there are more questions than there are answers. i am hopeful that you can give me an idea of what your outreach strategy will be moving forward. >> thank you. we do have an outreach strategy. whether it is for the private development partners. those for us in the city

departments. those that think that there is no redevelopment so that nothing happens. most importantly, our stakeholders, for who we do the work. we reached in january to everyone of our community advisory bodies, our project committees, are stakeholders, and let them know that the process, solution, and the quick work that the board took to preserve what we had. there is still important work that the city has yet to do that will require further thought and discussion. we are actively working and communicating with folks to

make sure we are part of that solution. the work to undertake the program, the infrastructure development, 20% of affordable housing. it was over $30 million of an occurrence that we were expected to use. the controller's tax manager will tell you that this is not generating any tax increments. the director talked about that there are a lot of strategies at the state level. new tools for redevelopment. the city has use redevelopment in a very measured way. whether it is for treasure island or redevelopment. one tool that will be important, it will require new legislation. it is quite