continue. i want to thank everyone involved in this process. i think it is very upper river for hsa to provide the back- office functions for it. we will >> item #1 -- proposed annual appropriation ordnance for a select the department's for the city and county as of may 2012 for the fiscal year ending june 30, at 2013 and june 30, 2014. item #2, proposed annual salary ordinance for selected departments, ending june 30, 2013 and june 30, 2014. item #3, services previously approved can be performed by

private contractor for a lower- cost than similar work performed by city and county employees for the fiscal years of 2012 and 2013 and fiscal years 2013 and 2014. employee parking management, admission booth, security comments a shuttle bus service, paratransit, security, parking citation and collection, meager collection including accounting, telling, transit shelter maintenance services and the public utilities commission. supervisor chu: all three of these are related to but it's coming up before us. the rent board, the permanent appeals board, they will be speaking about their budget tomorrow. tomorrow, we'll have the public tildes commission and the department of the environment. the first item is an appropriations ordnance for those departments.

number two is the salary component, basically the position authorities for those departments, and item number three is for all existing proposition j's so that there are no new ones. this is just carrying out what we're doing at the moment. just for reference, the department's we're first going to the department presentation and then go to the root report by mr. rose, and then the public comment is going to be heard on a different day, not today. we have asked each of the departments to talk about five major categories, so i hope they will address some today. we want to hear about the major revenue and expenditure trends. the most important parts of this year's budget -- this is the first of a two-year budgeting process we rolled out for the entire city. this is something new that we will all be learning from in this year's process.

to, we want the department to talk about capital needs that will help to inform us about what we can expect with your budget's going forward. we want to know about any changes, reorganizations are things we need to know about happening in your departments. to other areas that i think many of us have shared interests in for the departments to highlight to bring these topics to the front, the issue of jobs and the economy. how is it that apartments are helping to make sure they are improving the economy going forward? where the summer youth opportunities the departments are helping to contributes this year? we also talk about access for all communities, in particular, language access, making sure we're serving all of our residents, regardless of their ability to communicate in english. i want to hear from apartments to hear about what they're doing to provide linguistically

sensitive services. this is something that never really gets are brought forward, that would be an opportune time to address these issues so we can know we're doing as a city to make sure that does happen. with that, i would like to call first keith howard and see if the majors -- seek the mayor's budget office wanted to provide any opening remarks. >> thank you. i'm kate howard, the lead -- the mayor's budget director. you had on many of the key points regarding these budgets. we will be hearing 7 enterprise budget department, the first time we will have to year budgets for the city and for major enterprise department. those budgets will not come back before you. this is the opportunity for a full two-year review of these targets.

these investments reflect significant job creation. we expect the infrastructure and capital investments you will see as part of these budgets will be over $1 billion and create nearly 9000 new jobs as a result. finally, we're putting the final touches on our budget that will come before you in june, which is the remaining departments for the city. we look forward to working with you and thank you to the budget analysts. supervisor chu: why don't we begin with the first of the departments, the san francisco airport. >> i'm with the airport directors. i would like to highlight our budget and some of the topics on how the airport is doing. our traffic is booming right now. we are up 11% year over year for the last four months.

this is the strongest growth we have seen in 25 years. we will break record passenger numbers, coming in around 42 million passengers for the year, placing a set number eight in the u.s. for the number of passengers. -- placing us at no. 8. we will see services starting to paris and we have new nonstop service to washington national recently started by united and virgin america. that's the first time we will have nonstop service to those airports. we have a significant capital investments, well over $2 billion in the next 10 years. terminal no. 2 has set the standard for customer service and environmental standards for our airport and we think industry-wide. we will be carrying through similar improvements in terminal 3 which will come on line in the next 18 months. we will undertake a large program in terminal one beginning in 2014 and that will be completed over a five-year

timeframe. the $2.5 billion in spending will create almost 12,000 jobs. in addition to those projects, we will start work on a new air traffic control tower next month. we are undertaking runway safety area improvements as mandated by the faa at a cost of about $220 million. we are committed to making sure the spending on the capital side and operating side benefits san franciscans in terms of job creation, contract opportunities. we are meeting the hiring goals and requirements and achieving a high level of local participation in the construction area. 50% of all construction jobs, 43% of concession leases to local businesses, and all lot of new job creation from concessions as well.

we are holding the line, our budget, even with the passenger growth. for 12 and 13, we're looking at a 1% growth in employee count, we have about 1500 total employees today and in 13-14, our budget request is for an additional three new operating positions. we continue to see productivity improvements from our staff overtime. over the last seven years, we've seen almost a 30% growth in passenger traffic but only 6% growth in employee count. the profit payment which might be thought of as a dividend to the city represents 15% of our total concession revenue. that will go to $32.9 million next year and $35.7 million in

2014. that is driven by passenger traffic growth as well as improved concessions sales and we continue to rank as one of the top three airports in concession sales on a per passenger basis. we have seen very strong growth in parking revenue, almost $25 million annual growth in parking revenue and strong growth in rental car revenue as well. the concession performance, the growth in passenger traffic allows us to keep airline costs low. we're very competitive with the oakland and san jose airports. with the fees we charge the airlines, we are actually lower compared to our peer group, international gateway airports like boston, miami, and los angeles. are on the low side compared to those airports. some of the key programs to highlight -- we do not have any major new programs in the budget.

we have a big increase to reflect the potential of a new san mateo county parking tax. voters will decide on that the first tuesday in june. that could have an impact of $5.7 million. we have $4.2 million budgeted for security blessing. united is growing quickly, they will be adding 40 new daily flights this summer. we will allow them to operate from boarding area be in terminal one in the old continental area. the airport, under an agreement with united, will operate from terminal 3 in the international terminal to boarding area b. united will be paying us $11 million in rent, which is profitable for the airport. we are now responsible for staffing the exit lanes from all security checkpoints.

in the past, the swiss retsa -- this was a tsa responsibility. the big challenges are building for growth. our traffic growth is occurring much faster than we anticipated. we're moving very quickly on getting improvements in place in terminal 3 and getting boarding area e opened. it will be challenging to building new boarding area b in terminal one with this level of traffic growth. will probably have to build a temporary boarding area while the new boarding area is in construction. that is something we have never had to do before. we are also challenged by our on-time performance. with the growth in passenger traffic, we're seeing more delays. we are one of the most delayed airports in the country. we have a three-pronged approach to see short-term traffic growth

increase in oakland and san jose. there's a new regional airport plan that reflects the growth should grow at those airports for the shorter hop flights. we are also employing new technology. the faa has a new system that should be in place in the next year which should improve bad weather arrival capacity by 20%. this would be a huge improvement and will work to radically reduce delays. we will still have delays but once in place, this should be a big benefit. finally, we're working with airlines to continue to encourage the airlines to fly larger aircraft. 30% of our total flights are small planes, regional jet and commuter craft. some of them are flying to big cities like lax and uses up precious capacity. we want to work with airlines to make sure the use larger aircraft to make the most out of

our limited capacity. touching on the language service area, that's a very important for the airport to provide these services to our passengers and employees, reflecting the language background of our own employees. we have information booths throughout the airport. we have a contractor, polaris, is that's the booth on the lower level and we have 200 volunteers staffing booths on the upper level of the terminal and at providing service in the customs area so people wrote a threat the customs area assisting people the need language services. we also encouraging volunteers to step out from behind the counter at key decision points to help answer questions. those volunteers and staff have a wide range of language skills and we try to match them up to passenger traffic needs at

different times of the day. we also have language line service at each of the information booths and from our communications center, the language service provides 170 language services. 170 different languages are served. we are beginning to use a google language translation service. we experimented this on our own employee web site. that provides automated translation into 35 different languages. it is working well for us and we will apply that to our public website. we continue to use, following the international side, symbols for a way for passengers to get around the airport as well as english words for the directional sign it. this is the international standard and we feel if we start

to list all languages on the signs, we will end up with 13 or 14 different languages and that serves no purpose. we recently developed the first international sign for are the obama room. there is never been a national -- an international sign for yoga room. -- i think that answers the questions and i would be happy to answer any more questions in the budget. supervisor chu: we not have a few questions. just one with regards to pass -- to capacity. we have limited runway space and a lot of airlines and united is offering additional flights with its merger with continental. we see virgin america expanding their services and you have carriers doing short-haul flights and smaller planes taking up the same landing time as a larger plane potentially

would. what is the airport doing to encourage those airlines to have larger planes? is there an incentive we can offer? how much of a state we have? >> it is a real problem. for los angeles, which is the biggest market in the world -- one airline is operating 1150 to 70 seat aircraft a day. there are operating 737s, they would need fewer planes. the same -- may be twice as many flights. we have seen a real growth in small planes using our airport. the faa recently introduced what is called level to slot control which means considering asking the airlines for voluntary changes in the schedules to

reduce delays. we have asked the faa to focus on small planes and requesting airlines fly larger aircraft in heavily traveled markets. the faa has not responded to that. senator feinstein has also requested the faa to focus on that. today, the airport has no power to tell the airlines what kind of aircraft to fly. in the past, the faa has never stepped in and told airlines what type of aircraft to fly. we are asking to break new ground here. our pricing, we charge on a weight-based sea, so it is per thousand and we don't have the ability to charge more than that. we have a right to charge a minimum landing fee, but only a landing fee based on actual cost. even though we have a $200 minimum fee, that is not enough to drive the airlines to fly larger aircraft.

it's a nationwide problem, it is going on at newark, laguardia, kennedy, washington national as well. the faa may move us to a full- fledged control which means everything would be frozen and no new flights. this would be terrible from a competitive point of view. traffic growth we have seen is driven by competition. every market that virgin america starts, we see fares drop 20%. that brings more people into our hotels and to our city. i view it as essential that we keep our airport open and don't stop this competition and limit our hometown airline, virgin america, from being able to grow. it's going to be a hot policy topic for the next year. supervisor chu: one of the pieces mentioned in the budget analyst report is that the

department expects there will be landing fee revenue increases coming forward. but you mentioned we are very competitive compared to local area airports. could you speak to where we are? >> if you look at our average cost for passenger, we are a fair amount over oakland and a fair amount over san jose, but that's not meaningful because we charge a much higher rate per passenger for international traffic and oakland and san jose have very little international traffic. international traffic is much more expensive because of customs and security. they pay about $6.50 in oakland and probably $9.50 at san jose and we're very competitive among the low-cost carriers.

international may pay around $25 but they have very large first class clubs that add significantly to their cause structure. supervisor kim: you mentioned there was a parking tax on the ballot in san mateo. could you talk about how that impacts are fees? does that mean you are raising parking fees to absorb the tax is or is this something the airport is absorbing? >> the county has placed on the ballot a measure to tax both the parking in the unincorporated areas of san mateo county in the airport is in an unincorporated area. the rental car tax would be collected as an add-on to the contract. it would not impact the airports revenues. because our parking revenue control system is set up on a whole dollar basis, all

passengers pay in dollar increments and we don't have change in the cash drawers. we would effectively take it out of our total take from parking operations so this 8% would come out of the revenue of the airport. we have recently raised our parking rates significantly because demand is booming and few parking operators shut down. we had to raise our rates to shift more traffic to transit and try to make sure we don't fill up when we have a problem and there's no parking available. we have added 2500 spaces in the last two years and we are adding another 800 spaces before thanksgiving, but we cannot seem to keep up with demand. supervisor chu: thank you. with regards to the language component, you talked about the volunteers to currently held out with providing information

to passengers at the airport and you talked about an effort to get folks away from the desk and roaming around to help. i think i have been to the airport a number of times over the last year. are they wearing something that draws attention for people to know they are out there? do they have a uniform? >> they have a bright blue jacket and wearing a volunteer badge. one of the areas in your most likely to see them is going to the main checkpoint just beyond security. you will often see them there. sometimes right before security , people coming down the elevators -- there is often someone standing there.

we have a number of summer intern, maybe 10 or 15 internes this summer who will be performing this function standing on platforms in different areas of the airport right outside the bart station. we also have the jacket and identifying badge. supervisor chu: thank you. did you speak to the summer work force? >> we will have 120 workforce development placements and we will be increasing that to 135 next year. a very large intern program and we're very proud of this program. we serve both at risk use as well as kids in high school. this has been an important source of permanent hiring.

hire kids from high school and be able to bring them out to participate in the architecture. we started in the last year-and- a-half a custodial effort that has worked very well and we targeted specifically san francisco residents to identify young people training at the airport. >> thank you. -- supervisor chu: how do people figure out where these jobs are available? >> we have a place near the station and we work to list all the jobs at the airport. specifically to the internships, we work to spread the word about internships that are available and are couple of high schools we have close relationships with. supervisor kim: i did not know

about this program and i am glad to hear about the program. who do you work with to reach out to san francisco residence? i'm also wondering -- >> we have a pretty well developed program. we work a lot with downtown and we have a lot of focus on the disadvantaged population for these programs. i can rattle off a few. there is a long list and we can share with you if you are interested. >> i am very interested in the list of organizations. i'm glad to hear what neighborhoods you are targeting. do you work with sfusd and the academy programs? >> i don't know about the

academy programs but we do keep count and can tell you where we have a successful relationship. >> how many intern's are you able to take on and how many individuals are you able to hire permanently? >> i would need to track that down. the goal of the career connect for at rescues, a lot of kids, of being homeless and we have a very high success record of getting them into jobs at the airport. i will get the specific numbers to you. supervisor cohen: i want to acknowledge your commitment to the use and to reassure supervisor kim that the program is successful. if we were not in such an ugly

budget cycle, i would like to see it expanded. i forget the name of the gentleman who runs the program -- he is an outstanding role model for many of the young people in the program. i believe you are hitting the market given the limited resources you have available. >> thank you. supervisor avalos: thank you for your presentation. i just want to thank the staff. we have worked with your office and with your department looking at employment opportunities for youth in the south sector of san francisco. i know there are many that came from there. we have an ongoing program -- is that how we can categorize the

work? >> it is an ongoing program. particularly focused on the southeast part of the city. >> -- supervisor avalos: do we expect we will be seeing more employment opportunities for people in that airport? >> i hope so. i'm receiving a figure from my staff that 85 folks have been hired just in the first five months of the year. the concession tenants are working with us and a lot of jobs at the airport are entry level or just above entry level. it is a great opportunity for at risk youth and it is of benefit to san franciscans. >>supervisor chu: with regards o

the budget recommendations, do you want to speak to that? >> we are in agreement with that. supervisor chu: i believe mr. rose has listed a revised set of recommendations for the airport. >> that is correct. we issued that report this morning after having reached agreement with that airport on a recommended reduction and on page 3 of our report, our recommended reductions for the proposed budget -- these are on pages four through eight. a total 1 million --