this allocation in those years where the city has a deficit of $100 million or more. than has occurred for a number of consecutive years. the mayor and the board of supervisors has opted to defer up to 25% for both the first five commission and is the school district so the 25% for this coming fiscal year has a value of $17.7 million, leaving a direct allocation of $53.14 million. so for the unified school district, there is also stipulation in the charter that allows the city to provide in lew of cash -- lieu of cash in kind services.

this coming fiscal year, cash allocation will be $32.68 million or $7.75 million in in-kind services. these are services provided by the city to the schools on school property. so the total -- >> what are examples of -- >> nurses and direct service providers. we also found in our review of the plan of the unify school zrick's proposal does meet the requirements and intended uses of the charter and we noted that the funding is used for hundreds of staff equipment, materials and professional development within the school district. so in looking at the other resources that are provided by the city to the school district so we have a direct

appropriation of 32.79. this is a little more than the piece because we also provide a little over $100,000 towards the superintendent salary. the in-kind contribution i just spoke of, of $2.75 million. above and oned that over $21 million of additional in-kind services. some of that might be reduced rate for electricity. free passes to the museum to school children. as well as a lot of mental health services, substance abuse treatment services, nursing services are provided by the department of public health and other kinds of violence prevention that maybe provided through the department of children youth and families. so the total city contribution on an annual basis is $56.8 million.

and then finally, in trying to look longitudinaly of how much money has been allotted to the schools from the city over a time period, we're taking a look at fiss carrier '05/'06 through the two-year budget period. this is the first time city and county is considering approving a two-year budget. the public education enrichment fund was enacted in 2004 and the money first came in, in 2005 and '06. so what you see here is the allocation of the piece dollars starting $10 million the first year, $71 million the current year. school districts share so the school districts share its infancy of the program at $7 million and is now at $47 million. this bolded amount is the deferral amount, so this is the

amount of the trigger that was pulled in those years, first time was in fiscal year 89. '8 million deferred and $10 million for two years and $11 million in the current years and next two years we're estimating $12 million. so the cumulative value of that is $62 million but that includes the next two years. in-kind allowance, value of that. and then the net contribution from the city. above and beyond the actual cash that is provided to the school district, the charter requires the city maintains the value of the services provided before it was enacted. d.c.s. used to provide services to the school before the charter section was enacted and those

dollars affiliated with those services have to continue and they have to grow with the growth of revenue so as you see we started out way back in those years providing $5 million worth of services and that has grown to about $7 million a year. and the final amount is the city's rainy day reserve. the city enacted rainy day reserve about ten years ago and the threshold for depositting to that reserve is when we have a higher-than-expected revenue. and we put that money away for a rainy day during the economic downturn. and in fact what has occurred is that the city has now been able to withdraw from the rainy day reserve because the threshold that was set in the charter is very rigorous. however, the threshold to the schools is not nearly as rigorous.

in fact, schools don't even need to have a cut from their allocation from the state in order to draw from the rainy day reserve. they just have to be below a formula that specifies what the cost of living adjustment should be. the cost of living adjustment for the school is rather generous compared to the c.p.i., for example, consumer price index. so the schools have been able to withdraw from the rainy day reserve 25% of the balance in the reserve. so the first year was $19 million withdrawal and $25, 6 and and then we're budgeting $6 million in next year's budget and $5 million in the subsequent year's budget from the rainy day reserve and in fact the school district will deplete the reserve. don't think the city will have funding from that source. >> miss zmuda from the rainy day reserve for the school district to access the 25% of what's remaining in the fund, wasn't it tied to significant layoffs or

there's some language, as i recall, so you sewed cola but is there some language that ties it to lay jotches in the -- layoffs in the school system? >> it does require that we measure what the per-pupil spending is, and we look at that for the future and it is based on a cost of living adjustment that is established by the state that is applicable only to schools. the school district does not have to have layoffs for the school to withdraw from the reserve, although i know there have been layoffs and certainly many pink slips over the years. so the total allocation to the schools over time, you see on the bottom line here, 44 million this year growing to 46 in the next two years. even though we have pulled the trigger, we're still increasing

allocation because of the growth of revenue. and the total over the nine-year period is $340 million. i'm available to answer any question that's you might have. about either the program. we did recommend to the board's budget committee last week to approve the plan, which includes the allocation of the public education enrichment fund and then the budget also included the rainy day reserve appropriation to the schools. and just to note that the school district has been really very cooperative and helpful and diligent in establishing performance measures so that we can see what the success has been from the funds. and again, we will conduct an analysis beginning next year to review the good work that the school has done.

supervisor mar: can i ask you the process for the roughly $40 million deferred funds that i feel is an obligation to pay to the school district and looks like in projections it's going to be close to $62 million by 20 15 -- 2015. can you talk about what's the process to pay that deferred amount to the school district? >> if the program is not renewed, that is if either the city chooses not to put it on the ballot or if it's put blonlt and fails, then we are required to pay that back within two years. after the end of the program. if the program is renewed, this deferral could essentially continue for the life of the program or could even be forgiven in the next bond -- excuse me, in the next ballot issue.

so we are -- our planning or expectations is the program will be renewed when the program comes up again. >> you don't see it as an obligation -- deferred amount an obligation to pay to the school system if voters reauthorize it? because it sure feels like when i supported the 2004 campaign that the third, third -- expectation was that was an obligation that we as voters wanted to go to the schools and preschool for sit on as well. you're say fg it's reauthorized, there's no obligation to pay that money that voters authorize? >> an obligation is probably a softer term. there's no requirement. we may feel there is an obligation but there's no requirement until the program ends that those funds be repaid.

supervisor mar: ok. that's helpful to know. i sure feel like it's an obligation that should be repaid to the kids and schools, especially $40 million over the past 4 years when they cut to the bone like crazy and if the state's not stepping up, what better time than now to support our schools when they're reducing the school year and many, many students won't be graduating without seven period support, for example. but i understand what you're i saing. but thank you so much, miss zmuda. >> i'm happen dwroy answer questions. supervisor mar: don't see any other questions. let's go back to the public comment. i also wanted to call up michelle parker, president of the second district p.t.a. and followed by dennis kelly, president of united educators. >> good afternoon, appreciate being able to be here. as we've already discussed, the governor signed a budget last night and he did have some line item veto that's affected

childcare as well as different pieces of the education budget. in our whole city and school are hurting, talked about this. don't need to go into it any further. but i did want to bring up a few recent spending proposals with the city. there's a current proposal for $750,000 to parks for new gardeners. which is great. these proposals are what we need. they've also approved six training academies for police and fire. again, really needed. something we haven't met in our city charter. these are good things. the point in bringing these up, with these type of things it's easy to see the immediate impact of the investment. you can see safer streets. can you immediately see no graffiti in parks. with education, we're always go to have some who rise to the top and able to succeed despite the funding we put in front of them and there are lots who are not. and i think in our city we need to be different and we have been different. we're so lucky and fortunate that we have voters who have

supported initiatives over the years. we need to continue doing that and be clear that this won't happen on our watch. we will not let our kids fall through the cracks despite what's happening with the state. and so we need to come up with a contingency plan if these initiatives don't pass in november as a combined community between city and school district. i think it's time to be creative taxes and bond mersures and things we use but hotel taxes and increased sales tax or utility taxes, other kinds of things that we can look at. to be creative and continue, of course, for next november because it's too late for this coming november. next november and also ton support prop h reauthorization in the children's fund the following year. that's what i wanted to share today and hope we can work together to make sure if these initiatives fail especially that

we can do something together to take care of our own. thanks. supervisor mar: thank you for our leadership with the p.t.a. as well. next speaker is dennis kelly from the uning ted educators of san francisco. >> thank you very much. and especially thank you supervisor mar for bringing this up. i think when the previous speaker spoke about concern about obligation, i think that's the kind of language we in the schools hear all the time from people. you realize the state does not talk about how much they have cut from education. it's around $20 billion in the last five years but they will only consider it a cut if they actually put that money in your pocket and reach back in and took it out. when we talk about underfunding of schools and the way schools have been structures to reserve money from the state, the state legislative office does not consider that cut.

and that is a real problem just as the talk about obligation is a real problem. if you're going to build something in the schools, you must build it on some sort of stable base. so if there's money that is deferred because things like that happen, that money needs to be owned up to. it needs to be contributed then at a later time. i'm very pleased that the $43 million in unanticipated funds has brought people forward here to talk about this. when nancy talked about the city fans and showed you the slide -- by the way, nancy's leading us at the end of this week to-to-go to washington. we won't have nancy wamack to kick around anymore. i think we should take a moment to appreciate the work he's done in the district the past several years and thank her for that. when you talk about the slides she showed you and you see there's a $46 million ending balance with the school district last year, $40 million of that

was contributed by the teachers and parents in the school district. and so literally the school district was able to stay afloat on the backs of the teachers and parents. i don't think that's a wise way to run a business. i don't think that's a wise way to run a city. i think it's a terrible way to have to run a school district. we talk about furlough days as a number people talked about, we are adamantly opposed to furlough days. i'm president of the union but for 35 years i was a classroom teacher. furlough days are days we have taken away from students. you cannot give them back to them. you can never give them back to them. and so we are working in the current budget contract talks to try to avoid furlough days any way we can. that means just as prop h money was deferred, we are looking to using prop a money to supplement what's going into the payoff

deficit now instead of going to furlough days. now, the city rainy day fun i think you need to appreciate one of the factors about city rainy day fund. two ways you get rainy day fund moved over from the city to the school district. that is if there's a substantial cut in the per-pupil allocation from the state such as anticipated if the initiatives do not pass in the fall. or if there's a significant number of layoffs. at this point having not had that cut previously, we have had the school district have to budget for layoffs. they budget to get the rainy day money, which means they have to budget for layoffs every year. even ghoting rainy though getting rainy day funds means they rescind layoffs. that means a total destabilization of schools as teachers receive warning notices

in march, termination in may and gradually brought back into the school district. any money the city can find to move to the school district should be used to eliminate the possibility of furlough days and work for the children by limiting class size so it does not become unreasonable and students can learn. there are many new programs we need and many add-ons we would love to have. those have to come after we go through survival. we must survive first. again, i appreciate very much you're having this hearing. i know you're taking this seriously and we very much appreciate that too. thank you. p supervisor mar: thank you. next speakers are christina from coleman advocates and chelsea boiler from coleman advocates. >> good afternoon, supervisors

and commissionerses. i'm chelsea, program advocate for children and youth. we are lucky to be living in a city like san francisco where there are significant and intentional resources given to the school district from the city and city's taxpayers. this is taken the form of prop h, public education enrichment fund, rainy day fund as well as additional funds including money that the mayor authorized for last summer season current summer to provide supper school, that had been cut by the state. we need those funds in order to ensure high school students, all students in san francisco can be successful. and while we are in a much better position than many districts, we're not facing school closures now. we are still facing ongoing investment chipping away at the safety net and public schools needed for all students to be successful and to address the racial achievement and opportunity gap.

prop h has been pulled year after year deferring millions in dollars of payments to the school district for some unknown future date. and there are over 50,000 children in san francisco public schools drastically underfunded system. too many are being set up for failure without the necessary supports is, like opportunities for credit recovery, which has come up multiple times already. which could look like a targeted seventh period for students who need it with teacher present, who could directly support them. in general we just want to thank supervisor eric mar, jane kim, all of the leadership of the board of education, board of supervisors to prioritize this hearing because we would absolutely support any and all efforts to identify additional resources from the city of san francisco to support our schools. and ultimately our students. thank you. supervisor mar: thank you. christina?

>> good afternoon, supervisors and commissioners. i'm the economic justice campaign organizer at coleman advocates. and i'm here to speak on behalf of our parent and youth members. in 2009, coleman parent and youth members supported the board of education passing the a through g graduation requirement. it ensures all students graduate college and career ready, taking us one step close tore closing the achievement gap here in san francisco. unfortunately adequate additional funds to support this transition for our students, particularly those african-american and latino students attending lois-performing schools is not identified. because of this astonishing numbers of failing students. two months ago coleman members presented at this committee and spoken for part of funds for in-school credit options for students failing a through g classes. as it stands approximately 20% of graduating classes of 2014 and 2015 are not on track to

graduating, meaning they failed one or more a through g classes. 20%. this means one in five over incoming sophomores and juniors will not graduate. one in five students, these are future business owners, doctors, tech company entrepreneurs, future city commissioners and futer city supervisors and they will not be graduating. this is unacceptable in a world class city such as san francisco whose budget increased by $500 million this year alone. on tuesday board of education identified an additional $500,000, which includes $200,000 from dcyf for credit recovery options and we want to thank the board of education for this leadership. $500,000 is a step in the right direction but sadly not nearly enough in the face of the number of students failing. we want to acknowledge supervisor mar and all supervisors present for your leadership and pursuing this conversation to identify

additional revenue for city students and we believe together we can ensure the ultimate success of all of our students. thank you. supervisor mar: i will call the next couple of speakers f anyone else would like to speak, please come forward. chris carey, usf teacher and heather murdoch. >> i'm chris carey. high schoolteacher at 6 through 12 school, small public school with 400 students. just give you a background at our school. we're about 69% free and reduced lunch. 80% african-american lan tino students . when we talk about high-need schools and achievement gaps, those are the students myself minute colleagues serve. the budget cuts, i'm faith year teacher. been drastic over my five years. and we've seen loss of teachers every single year.

i wanted to give three examples of what those mean and restoration of funds such as you have been talking about, supervisor mar, can mean for our school and other schools in the district. first is drastic cuts to programming. schools at international relations focus school so above and beyond the three years of social science requirements, we require five including an international relations class and an ethnics study class that gets students to think about their lives outside of their city block and outside of the city. this year we were thinking about cut both of those programs, which were sort of the hall farc of our school. able to save them but it came at the cost of other things, which are second point of programming. in the last five years, we cut our band program. we've cut our studio art program. we will be offering only half the middle school p.e. that we've been able to offer in the past. this year we will have two ee lech tives for high schools.

computer arts and dance. we want to be a school that offers our a through g requirements and gets students ready for college but athis point that's all we're able to do. students need much more than the core classes. they need chance to explore things in their interest beyond those things so they're excited to be at school. second thing these budget cuts have meant for our school is massive stat turnover. we're hard-to-staff school, which means that a lot of our teachers are younger teachers, just out of program who are passionate about their craft. that means they're at the bottom of the seniority system. so every year