without looking for other ways to get water. to give you an idea of what it is worth, we are willing to pay modesto about $700 per acre foot of water. the currently charge their farmers about $10 an acre foot. doing things like the recycling project is upward of $4,000 an acre foot. it is incredibly important to have access to different ways of having water that are relatively reasonably priced where they are incredibly prices for agricultural districts that allow them to be the kinds of things to upgrade their use of water. >> and this will be finalized by? >> it was supposed to be in front of them, but they have been having a lot of questions

in the valley and have postponed their discussions. >> in our budget deliberations today, how does that discussion reflect what we're doing? >> your budget includes the amount of money we would pay, about $1.6 million for the first to thousand acre feet. the larger discussion we want to have is an additional 23,000 feet that would require a major environmental report. first one was covered in the report for the water system improvement program. if we can't get back, there is no reason to continue to work and spend money on the larger discussion so we are hearing from all the people right now about whether they like this or not but there is money for the first year's purchase. supervisor chu: thank you.

we have no other questions, i would like to move on to the next department. >> there are two clarifications for item #5. the water legislation, on page 8, row 11, the citation of $18 million should be eight team -- the other non substantive amendment is on item six, the head ceci supplemental -- the hetch hetchy clarification, to add to the bond oversight cost. again, are heightened level of scrutiny is covered and funded in the items before you. supervisor chu: thank you.

there are no further questions, we have tentatively taken the recommendations the apartment did the crew -- the department did the -- the department did agree with. i will take additional access -- additional questions after public comment. i believe we will not need the puc to come back and we will follow-up on urban agriculture and other things we have asked about. i know there are a number of people who might be here to testify on the rates or the parking meters as well as the irrigation district transfer. we will likely be taking half an hour break at noon and we will do the department of environment presentation, and come back half an hour at 12:30 and that do

public comment after that. it is want to make that announcement in case you would like to take a lunch break.

blue >> good morning. i am the director of the and san francisco department of the environment. thank you for the opportunity to present the 2012-2013 budget as well as the resolution approving the department to move to market street. first, i would like to cover our budget.

you will see our proposed budget for 12-13 itemized by general expense. this represents our current budget plus previously approved expenditures. the department of the environment has six major funding sources for its programs and staff. that includes the in pound accounts, anergy watch, recurring grants, one time grants, work orders from other departments as well as liquor fees. approvals come in two forms that are somewhat unique in this fashion. the annual budget process and the accept an extent approvals for grants outside the usual budget process. compared to the previous year, there's an overall decrease in expenses and revenue of $2.2

million, mostly due to be spent down of the federal stimulus funds we received a couple of years ago. in order to protect the long- term funding, we are looking at what is approved through the accept an extended process. on $5.27 million has already been approved for the process. the budget will be larger since we continue to apply for and received grants throughout the year. this chart on the screen shows all of the funding for the department. first, the impound account --

this is the first bar chart. it's our largest single source of funds. this comes from refuse rates and have been a stable source of funding for green building, environmental justice, and outreach programs for 25 years. this supports 60.5% of the current account of 111.9 positions. the second source of funding is energy watch. that's funded by the public goods charge that customers are charged on their monthly bills. it has been a consistent source of on going, reliable funding for energy work for the past 10 years. for the next fiscal year, the grant will total $5.68 million and support 14.6 positions.

the next source of funding is for abatement from two sources. $2.5 million from these of cigarettes and $950,000 from other departments. a fourth source of funding is work orders for other departments. for the past 10 years, we have had agreements for work performed by other departments. we will receive $1.3 million. supervisor kim: can you give an example of what type of work orders you do for others?

>> we have a work order with the puc. they fund quite a bit of our client -- quite a bit of our climate work. those are some examples. supervisor kim: 8 green school program you work order to the puc? >> they spent quite a bit of time doing work in the public schools. of the two other sources of funding, recurring grants -- we have for recurring grants to the transportation authority. we have received grant funding annually for the past 12 years and we received annual grants from a state agency from cal recycle for the past 15 years

to go toward our waste work. it supports about 7.46 positions. last is a non-recurring grants, one time grant. every year, the department and applies for and received grants from the state government, federal government, and foundations to support new and existing initiatives. the total for 12-13 to date is it to quit $1 million we have raised in non-recurring grants. i want to back up to one slide that i skipped over. i wanted to mention -- this is our budget broken down by program area where you will see line items for the zero waste and toxins and many other program areas. our two largest program areas

are zero ways and toxics and energy and climate. i'm sorry i skipped over that periot. what i have just outlined supports about 85% of our positions. the one variable source of funding supports 12.9 positions which represents about 11.5% of our funding. the department does need to raise about $1.5 million annually to support these positions. just to give a sense of the track record, in fiscal 2010- 2011, we raised [unintelligible] and to date, we have raised

about $1.8 million in new grants. just this week, we learned our department received a $400,000 federal grant for our brownfield work. i was asked to address creation of jobs and our program areas help small businesses so i want to spend a moment talking about that. most of the programs not only help small and medium-sized businesses but helped to create jobs. one of the best examples we have is our energy watch program outlined on this slide. over the past three years, the san francisco energy watch program, a program where our auditors work with small businesses to provide free energy audits. once they take action, they are able to save money on their energy bill and reduce carbon emissions.

this has saved over 4000 commercial and multifamily properties an average of $4,500 in annual utility bills and reduced carbon emissions by 40,000 tons. this cycle of having programs that benefit jobs and the economy and help our environment does repeat itself multiple times. for instance, are commercial waste program, 4600 businesses have been visited. businesses are saving 50% on garbage bills which helps the bottom line. as they comply with composting laws, they are able to see a reduction in their garbage bill which helps their bottom line. we have a number of retrofit programs and home improvement programs which help to stimulate the market and put contractors back to work, working in homes and commercial buildings.

i was asked to talk about our job training program. we have a program called "environment now." is our green jobs training program. there are currently 18 team members throughout san francisco and our core to the outreach effort. their activity is extensive. they do monitoring, recycling, composting, knocking on doors to promote energy efficiency, talking with small-business owners of reducing energy use and bills, and tabling at fairs and festivals to educate about the zero waste. as part of this program, they participate in a number of work- force training activities. that includes environmental literacy, which uses the curriculum to teach sustainability, soft and technical skills development

with training focus on skills like public speaking, outreach, customer service, data collection and waste and energy auditing. there is also a project-specific training where they learn about the many innovative environmental policies in san francisco and interagency coordination. another critical component is the on the job experience. they have done work in the residential sector on energy efficiency and zero waste and energy efficiency and toxin reduction. the progress update shows the different cohorts' we have had. we have 60 participants when the program was supported by the federal jobs now fund. in the past couple of years, we have had 18 participants. to date, 50% of graduates are

placed in permanent positions elsewhere. one other thing regarding use opportunities, there is staff dedicated to a volunteer program. annually, we employ about 30 internes and engage over 300 volunteers in department programs. most of those are folks under 24. supervisor cohen: you say 50% of the graduates have jobs. where are they being placed? >> ecology, waste auditing, they're mostly local jobs. supervisor cohen: are any of them in the department of environment? >> we do have to who are in the department of an barman. we just promoted one to a leader

who is leading the environment now team. supervisor cohen: what is the criteria that you use to evaluate will be accepted into the program? >> we work with quite a few nonprofits that do the kind of work we do in that community. we have close partnerships with goodwill, the san francisco conservation corps, we work with a lot of development programs where they have maybe six or eight week program and provide an opportunity for participants to do a two-year stint with us. it's a much longer opportunity. we work with a lot of partners and that's the main way we have been recruiting. >>supervisor cohen: these are paid positions? >> yes. i believe the hourly rate is $14 an hour.

supervisor cohen: this is 18-24? >> not all of them, but many of them. supervisor cohen: is there an age limit? >> there is not an age limit. the department of the environment has 30 staff whose primary responsibility is an outreach. 90% of our outreach staff are bilingual. they speak cantonese, mandarin, spanish and other language fluently. they conduct grass-roots outrage to residents and businesses that are strategic and it focused on environmental behavior change. a key tactic for the program and department is to deploy the multi-lingual staff in business corridors of the highest need throughout san francisco. in addition to bilingual staff, we produce a wide variety of

educational material in different languages. all of our commercial programs have an outreach materials and languages other than english. there is one example for our fluorescent lighting program. there are many other examples of materials in other languages. shifting gears, i would like to talk about our lease and why we are planning to move. you have before you resolution asking the budget and finance committee to approve a lease for the department of environment to move to 1455 market. currently, the department of the environment is located in two spaces -- 11 growth where we have four floors as well as 401 van ness where we have 30 staff. that is a city property. at that location, staff work with no access to the shared drive for the department of environment and have no centralized phone system.

being in two locations as you can imagine makes communication and coordination quite difficult and efficient at times. other factors driving our need to move is the lease at 11 growth expires on may 31, next week. real estate has worked us to have a hold over least the -- holdover least through november 1, at which time our red will go up 25%. -- rand will go up 25% in allocation. -- rand will go up 25¢ -- 25% in that location. we are very crowded where we are and one manager has an office in a closet. that is actually true. we have grown from six full-time

positions the 2006 to 115 full- time positions in 2012. it is a 109% increase over six years. over the past 18 months, we have been working with real estate to find suitable places to be located. we have learned -- looked from market street all the way to embarcadero as well as van nuys and selma. the main criteria has been access to city hall, public transit, as well as a location for the public. of course, something that can fit within our budget and it's consistent with market rates and with a priority to put all our staff in one location. realistic and the department of the and armin have been working with hudson properties on the

proposed lease at 1455 market. we have completed this negotiation process on the base lease and we have a mutually agreed upon document ready for signature appeared on this side are the favorable terms included in that base lease. these terms include the 24,440 square feet of space. the term would be seven years with the option to renew. the the baseline rent will increase annually by $1. and the landlord has -- has included an allowance for renovations to the space. this is a shelf space that needs to be led out.

right now, real-estate does project the buildout cost is too -- is likely to be $75 per square foot. additional costs will be covered by in-kind or cash donations and may be amortized if necessary. the department offered us the opportunity to borrow at a rate of $10 per square foot in order to cover the costs. the way the lease is described, we will only exercise that option if the upcoming funding efforts did not pan out the way we anticipate a well. we currently have quite a few companies that do work in green buildings that are interested in either providing free or at- crossed services and technologies to the department of environment office to be negotiated with the space in the city.

supervisor avalos: are any of those companies aware of the total costs it will take to build up? >> we have not gotten to that stage. most of the companies are waiting to see a final lease and then we can take it to that next level. if i may, i would like to bring out director of real-estate john update, to talk about conditions of the lease. >> thank you, john updike, acting director of real estate. you have seen previous issues of finance relative to the budget. their comparables to those members on the screen before you now. this is considerably below market rates that we think are actually in the mid 30's to the mid 40's, moving very quickly,

unfortunately, in this rapidly changing civic center market. as you average over time the cost for this particular location, it is on average a $30 per square foot rate over a seven-year term. that is a favorable position for the city to be in. and the tenant improvement amount is equivalent or slightly better than what the market is indicating. i will be happy to answer any questions that you might have about the lease proposal itself. chairperson chu: supervisor kim? supervisor kim: i'm happy to see the amount -- immense amount of work that has gone into finding the space that will allow the organization to be in one space, but together they given the market conditions. my question was actually on the tenant improvement. if your asset up to about

budgets, i'm wondering what the budget with the like if you only had $61 per square foot, and what it would look like you at $75 per square foot. >> we have not gotten to the point of setting up those budgets yet. it is a bit of a chicken and egg situation where without a signed lease we have not been able to engage a contractor to give us a cost estimate. but i will tell you the $61 we know is going to go to the basic infrastructure that we will need regardless. the chp systems, the lighting, the wiring for computer and phone systems, the preliminary architectural design that the building's architect has done for us, which does include a core for private offices for senior staff as well as the conference room. if we cannot for some reason fund up to the $75, we may have to adjust the architectural design so that we have less private space. that would make us look more like some of the many tech companies that have much more open collaborative environment,

which we tend to want anyway. we think that is where some of the trade-offs might be, in the construction costs. supervisor kim: i know i asked esther -- yesterday what the comparable costs were at this site. have you as other agencies to get a sense of what this cost is? >> that is somewhat still in flux for final numbers, but this is very comparable. we are at about 10% of what the transportation authority is for their space. the space they have selected is slightly different in terms of the initial build-out. it is not exactly an apple for apple comparison. but it is closed and their needs are similar as well. supervisor kim: thank you. >> i just have two final slides. one of them is regarding lead

certification. as is named for the green city index, we do think it is necessary for us to lead by example and had a goal of approaching the platinum interior. lead stands for leadership in energy and environmental design. it is a point base system for achieving sustainable and green neighborhoods. leed provides building owners and operators a framework for identifying practical solutions for green building design, construction and operation, and maintenance. in san francisco, we have a minimum requirement in the environmental code drop -- chapter 72 reach leed goals. our leadership goal is to reach platinum, which would require 80 points or more. as you see