year. i can be the case. supervisor avalos: can you give any examples of contracts you might know of? >> i do not work with most of those contracts on the kind of detail. i am sure there are others here who could provide those examples. >> example would be a lease where the city enters into a multi-year contract that guarantees certain rental payments and often you see that as escalating. that would be an example of an escalating lease. an escalating contract. supervisor avalos: we talked about ucsf has a c. o. l. a. and it will negotiate an agreement with the department of public health. within that agreement there will be a c. o. l. a. that is built- in? >> that is what i understand.

supervisor chu: kate. >> it is true that every year the city negotiates around a c. o. l. a. with uc. we have fudned. we have cut. in order to staff the hospitals, we have certain amounts of fte's that are required. >> when we feel the cost of living increase for nonprofit services, is there a way that the city says how those funds will be designated in terms of general nonprofit use or for worker salaries? is there a distinction that can be made when we do a contract with nonprofits?

>> the way i would understand it is the terms of these contracts are determined between the service provider and the department. and so there is discretion at the departmental level about any increase in funds and were those would be available. i think there is that flexibility. supervisor avalos: if the department says this is for worker salaries, that is something that would need to be programmed in to nonprofits [inaudible] >> in many cases our nonprofit organizations themselves are unionized or have labor contracts between the non-profit and their work force. the city is not party to those agreements. nor are we participants in them. the contract could provide more money for salaries within a nonprofit organization.

we're not party to the collective bargaining agreement that in some cases would need to be entered into by the organization itself. supervisor avalos: my question is more trying to establish through our budgeting process and contracting, do we have the -- any department or the mayor's office has the ability to say how those funds would best be designated in terms of salaries or that is up to the nonprofits to decide everytime? >> i think that is a decision between the contracting department and the nonprofit. we contract for certain levels of services. that is a discussion between the contract organization and the department about what the cost of doing those services is. supervisor chu: because we have so many different contracts across different departments, they are unique and different.

for some of them where we might see the provision of housing services for individuals, we may pay for the cost of maintenance. we might pay for utilities. we might pay for a number of different pieces in addition to providing for service on-site or wraparound services. that is probably a different contract from where it is based on the volume of people they serve. the number of meals and get served or the numbers of clients they see, the number of hours. it depends contract by contract. based on through the level of service and what it is those contractors are providing, the department allows for a lot of flexibility or not so much flexibility among the different cost components of the contract. do we have deprived representatives here from some of the large contract agencies? we do? >> good afternoon, supervisors.

i think kate and supervisor chu hit it. they vary. in the past for we have had funding, we allow flexibility within the contract budget to shift funds around, to cover exponential costs such as health care, workers' comp, cost the contractors cannot control. in times of flood funding we often have to sacrifice services to make some of those adjustments. this year unlike prior years, at least at hsh, we did not put the mid-year restrictions so our contractors were allowed to move money around to cover some of those increased costs. as far as salary increases to the workers, we leave that up to a city-wide decision. we try to apply that uniformly

in the times where we have funding to do it. we did it that way. it was usually a joint decision between the mayor's office, the budget, and the board of supervisors what that would be -- with that c. o. l. a. would be. especially if we are contacting on a cost reimbursement basis. there comes a time when we do have to sacrifice the service level or the amount of units of service in order to cover some of those. we try and be flexible. they are on a case by case basis. nonprofits have the ability to leverage outside funds to cover the operation. we always acknowledged that the city's findings rarely covers 100% of the services. we expect the nonprofits to leverage other funding and they can apply that where they need to in the budget. there are various ways to do it. we have those discussions with our contractors at the start of each year when we put the new budget together.

in general, mid-year or around march when they have spending histories and they know what some of the changes are. we try and accommodate them as best we can within our budget constraints. supervisor chu: thank you. just before the next question. we are convening at a special full board meeting. we have five members of the committee and an additional member who is sitting in, supervisor chiu. we have a full board meeting at that moment. supervisor avalos: is mentioned nonprofits have the ability to get outside funding. it is more like added pressure to get outside funding to do the same kind of services. that is the constraint we are in in terms of having the flat funding. there is more pressure to do that. some have greater ability than others or greater success. that pressure is something that israel and i think that is what we are addressing here by this hearing and we will hear from

nonprofits discussing that. before going on to the next speaker, i wanted to follow-up on a question on our contract. you mentioned leases. what about services that are provided by for-profit contractors in san francisco? we just approved a contract for ecology. that has a c. o. l. a. in it. >> any time the city put something out to bid and we often do, seeking a bid for a multi-year term, bidders have the potential to bit different prices for different years. to take an example from my own office, each year we conduct -- enter into a contract to conduct the city's external financial audit. we often receive multi-year bids that have escalating costs

in future years. the same would ostensibly be true in a where the city is putting out a multi-year bid to be provided by nonprofit service contractors. i do not think it has been the practice to do so. nothing is any different about the two. putting out something to enter into a multi-year contract, and fighting bidders to bid on it and allowing builders to include their expected costs and entering into the contract at the end is -- could be a practice on all sides. >> a competitive bid in vernon, -- and vernon, -- environment. c. o. l. a.'s could be done. >> their of the two largest contracting departments and they're more familiar with the non-contract king world the night.

president chiu: i want to make one observation on the fact we have a lot of contracts with varying terms. it has been difficult as a supervisor to really understand how to compare all these various contracts. there has not been much transparency into these contracts and that is probably the case for the public as well. my question is, are there easy ways among the contrasting managers in the city for us to drill down to these questions supervisor avalos has raised to compare with the c. o. l. a. -- what the c. o. l. a.'s look like, and we have some more c. o. l. a.'s than others. is that a question we did get answered? >> when you talk about a c. o. l. a. in that context, are we

talking about the amount the city holds with the contractor or the amount on the contractor side of the c. o. l. a.'s they're providing to workers? we're using this change -- terms in interchangeable ways. it is the amount of money the city is interesting -- entering into, that information is readily available. as of the court -- the departments that hold the contracts can speak specifically to what this contract dollar amounts are purchasing from the provider. the second question i think would be more complicated. i would have to defer to the contracting departments. president chiu: the first level is something we should get some answers to. how would we be able to get that and fairly quickly? can you provide us with that analysis? >> sure. if you go to the comptroller's office website, at the top of that page there is a frequently asked questions and you can pull down that bender -- menu and it

has a vendor database that any member of the public can open. you can look for the name of an individual contractor, nonprofit or for profit. it will pull out the history of city spending with the provider for the last three years. it can do the same search for a given department or for the city as a whole and screen for non- profit service contractors. we have a searchable database that is available to members of the board and the public. that does provide contract level information so it does not get down to the level of what services are we purchasing as a city from each of those providers. that information lives in the contracts themselves which are held that the department level. president chiu: thank you. supervisor chu: thank you. >> there is one final -- to wrap up. -- there is one final slide.

the figure we're using for fiscal year 12 and 13 comes from the state's projections of the department of finance. that is the nearly 3%. for the san francisco area. going down bottom-line if you look at the universe of nonprofit contracts that those excluding the uc contracts -- excluding 4.4. each 1% increase depending on which universe you're looking at is $5.3 million or $4.3 million if you expect -- excluded the uc contracts. if you want to fund the full protection we would be looking at $15.60 million if you're including the uc contracts or if you are leaving them aside. that is 40 million of general fund dollars.

that concludes my presentation. supervisor avalos: thank you. appreciated. question for k. howard. a lot of non profits have met with the mayor over the past few weeks in preparation for the budget. has a commitment been made about an annual cost of doing business increase with the mayor's office? >> you are correct that over the last few months the mayor has been meeting with nonprofit organizations, with non-profit service providers to talk about the budget as a whole. one of the key issues that has come up in all those conversations is the struggles that our nonprofits are facing with respect to their inflationary costs and the fact the city has not been able to fund increases that would help

them meet those inflationary costs. as you know, we're still facing a significant budget shortfall of $170 million and 312 million in the second year. a 2.9% c. o. l. a. would be nearly $12 million in aid to those years. the mayor has not been able to make a commitment to providing a c.o.l.a. to nonprofit organizations. it is one of those factors will have to think about when we balance the budget. supervisor wiener started to highlight this in talking about how we are dealing with state and budget cuts. how are we going to address this

issue of the nonprofits that do work on our behalf as a city? as you know, we have deferred and not fully funded our capital plan every year for the last five years. we have not fully funded the hotel tax allocation for many of the arts organizations in the city. there are number of -- a number of trade-offs that have to be made as to balance the budget and that -- this is one of those choices. we do not have a balanced budget so we're not in a position to offer a c.o.l.a. i would also point out one final thing. every -- for most of our departments, maybe they will speak to this. they conduct rfp processes. they go out and request proposals for how to conduct

services, how much will it cost to provide service a or b. and community-based organizations submit proposals detailing their costs. although there has not been a c.o.l.a. per se funded in these past five years, services have been rfp'd. there are organizations that receive funding based on the cost of that business. there is a more complicated story that is going on than just flat funding. supervisor avalos: thank you. often organizations do not get funded fully. there is an expectation they will get money from outside courses as well. i realize the rfp process in a new contract is an opportunity to square up with the cost of

doing business. we're talking about the years in between, how we can make sure that nonprofit organizations can meet the rising demand. i thank you for your answer. i have a list of names i want to call. this is for public comment. we can open up public comment to allow for members of the public to testify. >> why don't we open a public comment for item one. >> i have monica morgan, steve fields, and other speakers. >> i am executive director of the coalition on homelessness. in the late 1990's, the filthy

52 largest corporations in san francisco sued san francisco to eliminate the gross receipts tax. san francisco lost $50 million a year since then. it has been our very pores to have paid. san francisco lost a whole lot more than money. we lost parts of our safety net. since budget year 2000 and 2008, $98 million has been cut from the ph and when you remove administrative cuts, you have 32 million in direct services. we have lost $1.8 million in aids funding, primary health care has seen a 31.5 million in a country of 2.2 million in acyf. i could go on and on. what do these numbers mean? medimmune brownley long waits

for life-saving services. increased security in the population seeking services. decreased capacity to respond. we're paying five times as much putting people in lockdown are having the police respond. decimation of our communities of color print we can do better and we should. i want to walk you through one person and how this would impact her. this is sam, a native san franciscan. she has ptsd and personal health issues. she was homeless after losing her mother and she stabilized after she got disability and regular milk -- regular mental health care. her disability was cut and she became homeless. share rapidly went down. -- she rapidly went down.

supervisor avalos: could you tell us more about her typical day? >> this is one of many programs we have lost. i would like to walk through more of her day. as for overall health deteriorated, her mental health deteriorated and she went to four different research centers and found them) to try to find shelter but one-third of the beds were lost. she found herself boarding her shoulders with others who had been providers. she has nowhere to go and she cannot sit down because that is illegal. shakow case -- she cannot get case management. outpatient treatment is a six month wait. so many beds have been lost. as her health deteriorates, she gets taken to san francisco general and the city racks of thousands of costs that she has

-- and she is repeatedly hospitalized. her fate is sealed by these decisions to sacrifice poor people to protect the wealthiest corporations, -- will this corporation -- weathiest corporations' bottom line. supervisor chu: we do have a number of people who are speaking. i would request that we hold the's beef -- we can get through public comment. >> thank you for this opportunity to expect -- share my experience. i work for baker places, inc., in progress foundation. i am a single mother with two children. due to the increase of the cost of living and lack of pay increase, i am first -- forced to work two jobs.

much like the services are provided for the clients we serve, creating an environment safe for them. they have experienced neglect and trauma. mothers who are working to reunify with their children along with managing mental- health symptoms. my workout -- workload has changed due to cuts in the crisis. but jeudy has increased without the increase in staffing. added to the requirements of the computer system that takes away -- the hiring rate is low and the turnover rate is high. due to the ongoing effects because of the budget cuts. this work requires true dedication and -- in helping people in need. it takes a special person. the turnover does not allow for relationship building. our clients have suffered multitudes of issues in trost, a

trauma and neglect and abuse trade having a team that has solidity and longevity provides the stability, trust, and foundation. supervisor avalos: thank you. next speaker. >> thank you. and the executive director of progress foundation, co-chair of the human services network. i acknowledge the mayor's office and there unprecedented reaching out to our sector and especially supervisors chu and avalos. it is an opportunity. i want to lay out a couple of important points. we're asking for the cost of doing business increase because that is the best way to ensure that we can pay our employees their long overdue fair salary

increases for the hard work they do in the major reason is our biggest cost pressures besides our inability to pay a fair wage to our workers, are on the doing business side of our agenda. health-care cost increases, workers' compensation increases, recently, gasoline increases it up so much of our budget that if we only get a c.o.l.a., we we end up -- we end up with less money. if we are going to stay open we have to meet these pressures. 2 supervisor wiener's question which is legitimate. we cannot -- there are many decisions the city makes in the mayor's budget and that mou are agreements undersigned, in the decisions that have to be made the and and a yacht that reflect priority. what we're saying is, this sector is the future of being able to respond to health and human services challenges in the

future. we're going under water. we're like a mortgage that can no longer be sustained. these years that we have been living with one cost increase after another and observing them has resulted in many reductions in service the have been hidden. let me say about the rfp process. i went to the lost -- the last process. the parameter was there could be no requested increase in your contract. thank you for this opportunity. supervisor avalos: you talked about a couple of things i would like to follow up with on questions. one is hidden costs and consequences of what funding. if you could cover that. and i will ask you as well about the ability to get funding. >> there is the obvious reduction when programs are closed. the issue that was raised about whether there have been any increases in contracts since the 2007-2008, i do not know of

a single contract that is a baseline contract with -- was increased. there were no individual negotiations that resulted in higher contracts because we're cutting. we were reducing services throughout our health and human services sector for the last five fiscal years. there was no opportunity for new negotiations. what that means is you see the obvious things which is closed programs and other things. the other factor is that there is layoffs. there is more workers carrying larger caseloads. at the same time, there is an increasing level of acute need in behavioral health and health care services because of the economic conditions that our honorable conditions -- clients face. we're increasing need and increasing capacity to respond. you could argue the non-profit sector has been our own worst enemy because we keep observing these cuts and make no mistake, flat funding in a climate of 2.9, 3.45, 1.2% increasing in

the cost-of-living index is a cut. we absorb them silently. and at the same time, we're asking our workers to take on more and to go that extra mile and to work harder. they're not getting any increase in their salaries. we were at 30% disparity between comparable nonprofit jobs for people doing the city's business, after all. these are not batik services. we have asked the city to fund. these are essential services. hiv aids. primary-care clinics, supportive housing. we are the major purveyors of services in that sector. our workers are asked to absorb no increases. there will never be a proposition c for our workers prepare do not have a retirement plan to give back. as we can absorb these costs

that are not visible to the public, we often hear people say, another crisis is coming and it got averted. what our sector is saying over and over is our last to see is gone. we are sick -- we're at the point of having to close programs and we will not go any longer, taking advantage of the willingness and commitment of our employees to keep going year in and year out without an increase in order to keep services open that the city is not willing to pay for. [applause] supervisor chu: if i can ask " -- folks to hold the applause. please hold the response we can get the question and answer and your public comment as well. >> spirit fingers also