that kind of thing. along with all the,qr'gs coming yes. >> if there is no further commissioner,, is there any public comment on items 7a and 7b. q(ñsimenon, item eight, review d approval of the minutes of commission meeting april 18, 2012. ñrall in favor? is there any public comment? the minutes are approved. item 9, review and approval of the minutes of the regular meeting of may 16, 2012. >>5g move to approve. >> second. >> are all commissioners in favor? in the post?is there any public? -- any opposed?

the minutesñi are approved. review and approval of the minutes of the regular meeting of june 20, 2012. >> move to approve. >> second. >> is there any public comment? commissioners in favor of approving the minutes? i"ñany opposed? the minutes are approved. gcommissioner walker: can i also thank you for catching up? we have been far behind. it has been a tedious job. thank you, sonya. >> and thank ann, too. >> and thank you,ñr ann, wherevr you are. >> is there a motion to adjourn? >> so moved. >> any opposed? we're now adjourned.

is 11:10 a.m. wfb-- it is 11:10 a.m. supervisor farrell: good morning and welcome to the special meeting of the government audit and oversight committee meeting on monday, july 30, 2012. i am supervisor mar farrell, chaired the meeting. i am joined by board president david chiu, and we will be joined momentarily by supervisor scott wiener, who was filling in today for vice chair supervisor sean elsbernd. i would like to thank the clerk of the board, victor young, and

the members of sfgtv you're covering this meeting. nona and john. >> please silence all cell phones and electronic devices. completed speaker cards sent copies of documents should be submitted to the clerk of the items acted upon today will appear on september 4, 2012 board of supervisors agenda unless otherwise stated. supervisor farrell: ok, thank you, mr. clerk. right now, we have supervisor wiener as sponsor items one and two. he is stuck in an endeavor committee. he will join us momentarily. we're going to take things out of order. call item 3 first, and then we will go to item number four. >> item number 3, resolution authorizing the director of the mayor's office of housing to executive level operating subsidy program grant agreement with mercy housing california xl to provide operating subsidies for formerly homeless single

adults at the arlington hotel for the time span of august 1, 2012 to july 31, 20207 in an amount not to exceed $9,354,007. supervisor farrell: city staff? >> good morning, supervisors. project manager with the mayor's office of housing. according to the san francisco 10-year planning councils report published in 2004, san francisco had 15,000 homeless persons living on the streets. of those, 3000 were identified as chronically homeless. this presentation is about an important component created to address the homelessness issue. the local operating subsidy program, which is an operating subsidy granted to affordable housing providers who house and provide services to formerly

homeless persons and families. the definition of chronically homeless has evolved over the years. moh, along with human services agency and the department of public health use the following definition -- homeless includes any individual or family living on the streets or in abandoned buildings, living in emergency or domestic violence shelters, other emergency and transient situations, hospitals or for the programs, institutions, transitional and/or substance abuse treatment programs, as well as those at imminent risk of eviction. the report identifies the chronically homeless population has that segment of the homeless population that consumes most of the annual homeless budget comprised of city, state, and federal resources. it also went on to state that

permanent supportive housing, where housing and services are linked, have been proven to be the most effective and efficient way to take chronically homeless persons off the street. san francisco has its own successful version of permanent supportive housing in the form of the department of public health's direct access to housing program were units are targeted specifically to house homeless persons in the city's system. the program is regarded as a national best practice. in 2004, a goal was set to create 3000 new permanent supportive housing units over a 10-year time span in order to provide housing and services to chronically homeless. development in san francisco is very expensive, and no one would dispute that pitted the former redevelopment agency and the

mayor's office of housing are two key agencies in providing capital funds to create and rehabilitate projects to serve, among other populations, homeless persons. as part of the city's effort to address the problem of homelessness, the mayor's office of housing, in 2004, began prioritizing the development of nonprofit-owned and operated permanent supportive housing. because the residents of such housing are unable to pay enough rent to offset the cost of operations and maintenance, the operations of such a deeply affordable housing much rely on other forms of revenue to operate their buildings. examples of these other subsidies are the section 8 program, mckinney shelter plus care, mental health services funding act operating subsidies, hud 202 housing for seniors, and hud 11 housing for disabled folks.

however, the demand for these subsidies far outstrip their availability. consequently, the city may be able to plumb the capital improvements, but the project would not be feasible because the housing provider would not be able to demonstrate to competitive resources that provide funding in the form of tax credit allocation or reduced rate financing or conventional lenders who provide construction financing or investors to also provide capital to build that the project is feasible. local operating subsidy program was created to support building operations were the tenant rent payments and all other forms of resources coming into the product decked are not enough to cover operating expenses. where there is a gap, loss pays the difference through multi- year grant agreements which are subject to annual appropriations.

so this is a slide about the typical tenant rand company -- contributions. for a typical homeless single adults, the average household income if he or she is on disability is approximately $800 a month re. rent famous standard is typically 30% of household and come. however, for the dp hh unit, the city is providing more intensive services including tenant care. tenants are required to pay 50% of their household income as rent payment. even requiring the higher rent payments, it would still not be enough to cover the full operating costs which services the unit, which could range from $6,000 to $12,000 per unit. the local operating subsidy program ensures that a homeless person can be taken off the streets or out of the city's

emergency care system and housed and provided services, even if he or she has a zeroing come. -- zero in come. now what would like to talk to you about the process for the local operating subsidy approvals. eligible projects are permanent supportive housing that have been approved by the city-wide affordable housing loan committee which is made up of staff from moh, directors for moh, the department of public health, and human services agency. most staff prepares 30 pages plus evaluation that reviews and analyzes all components of the project, including design, construction, and/or its rehabilitation, as well as the operating phase. this evaluation is then presented to the loan committee for review, comment, discussion, individual approval.

moh issues the first permanent supportive housing notice of funding available to provide capital funds in 2004, initiating construction or rehab of 300 units in at three different projects. those projects you have probably seen, because we had board of supervisors' action on them. the first was hotel ethics committee chp-sponsored project with 84 units targeted to single adults. then arnett watson at 650 eddy, 83 units, 36 targeted to single adults and 47 to families. then bishop swing, which is an ecs and bernal-sponsored projects. 135 single adults of the building. these three projects were all 100% homeless population. however, we also do mixed populations.

10th and mission is a family project that mercy sponsored. 135 units. 44 targeted to homeless families. currently under construction is 11 84th, another mercy-sponsored project. 150 units with 25 targeted the homeless. eligible contracts unless projects must contract to provide services that are reviewed and funded by dph and hsa. they go to the access points, giving the city the ability to prioritize those individuals that have long histories of heavy use of city services. the first loss disbursement is made -- once approved, it is made when the building is placed in service. thereafter, disbursements are made at the beginning of each fiscal year after the city's

budget is approved. the loss program budget is monitored by both the service agencies, as well as the mayor's budget office. local operating subsidy creates an operationally feasible project that is then able to leverage other state, federal, and private funding. and i think i mentioned that in order for other resources to consider our applications eligible, we have to show that it will cash flow for a time span of 20 years, and that is where the subsidy comes in. it is the city's intent that, to the greatest extent possible, other non-city resources replace lost assistance whenever such resources are available. recipients of losp must agree to work diligently with city staff

to identify and obtain other potential operating assistance if and when it becomes available. we just recently had one of our projects, veterans comments, move off the local operating subsidy list, because we were notified that the city and county of san francisco not 200-section 8's, so the project will apply for 60 of the vash section 8's, and it has been awarded 15 mckinny, so all the units will be supported by other federal subsidy. the next slide is going to show your numbers the plan called for the creation of 3000 units. moh has identified 2958 units targeted to homeless that we now

have in our pipeline. although with the dissolution of the redevelopment agency and a significant reduction or elimination of local, state, and federal resources, our pipeline has been slowed over the last few years, making progress slower for bringing new units online. in 2012-2013, we expect to have 1250 units subsidized by the local subsidy program and 17 products with 111 units targeted to families. by 2017, losp will subsidize 1450 palomas units. -- homeless unit of the next chart is a new operating subsidies which ranges from 6000 to 11,000 per unit per year. building types include sro's or

multi-bedroom apartment units, as well as population, single individuals versus families that very, which causes buildings to operate differently. that is why there is such a range in per unit subsidies. moh staff gathers monitoring information from annual reports, and this information includes specific operating data. we are just beginning the process of going through the information to fully understand how certain populations and building types impact a building's operation. as you can see there, predicted in 2017 with the 1400 units, the total for the program will be $17.1 million. in 2017, along with the service

funding of $6.4 million, the total losp program funding will be $17 million, and this will be spent to provide nearly 1500 units of housing for formerly homeless persons. studies have shown that the care of these individuals and families in emergency-room services and confirmation for other public systems that support would be far greater. for this reason, we believe this operating subsidy program is a cost effective, efficient way to deliver housing and services to san francisco homeless populations. then i have a couple of slides of projects we have done. this is 10th and mission, the family housing that was sponsored by mercy. this is paul street senior housing, which is also a mixed building -- polk street senior

housing. targeted to the chronically homeless. this ends the staff presentation for the local operating subsidy program, and it should have added at the beginning that we have staff from dph and hsa here to answer any questions you might have, as well as the sponsor from mercy housing. and like to give you a few facts about the arlington. the request is for $9,354,007 for the local operating subsidy which is the operating contract that will carry the project through for 16 years. mercy housing is the sponsor and will own and manage it. construction completed -- will be completed in september of

this year. after construction, there will be 153 units. each unit will have a bath and a micro refreshments center. starting with 80 units in 2012 and working up to 129 units over time, the additional unit24 will be subsidized by another dph funding source. tenants will be homeless individuals referred by the program who are high users of the public health system who may be mentally ill, a chronic substance abusers, and/or living with hiv or other disabling medical illnesses. this is just to tell you that this project was able to leverage $10 million in state funding, $12 million in federal funds, and another $840,000 in

ahp funds. and without the local operating subsidy to show that the project is feasible, we probably will not have been in a position to secure these funds. this ends my presentation, and if you have any questions, i am available, as well as staff. supervisor farrell: thank you presentation. is there someone else? >> i was going to invite tim dunn from mercy. >> thank you, supervisors. i am project manager for mercy housing. we really appreciate the support that the board of supervisors and the city has provided in this instance. as joan was discussing, arlington hotel is a 154-unit of

building which will have 80 vacancies available actually in about -- right after labor day, to start bringing in people through the losp program. we're excited about the renovation. if anyone is interested, we may invite anyone for a tour. linton hotel is a long time resource for affordable housing in the tenderloin -- arlington hotel. it was at great risk of foreclosure several years ago, about five years ago. the building had huge deferred maintenance issues, was seismically vulnerable, and was unable to meet operating costs. mercy housing has been working with the st. vincent society as well as the mayor's office of housing and the department of public health for about five years now to save this important resource of housing. as mentioned, the losp was a key

component to this plan, and as she mentioned, with the losp, we were able to leverage $10 million of state funds through the multi-of a program, a $12 million of stimulus funds, and $840,000 of federal ahp funds. so the losp is the final part of this long-term solution for maintaining this important resource. the losp is a great model. other immersing housing works in a lot of communities -- other mercy housing works in a lot of communities. san francisco should be very proud of this model. mercy housing also has got

letters from many of our tenants who are currently beneficiaries of the losp program in our other properties. we will drop this off with the clerk. thank you very much. supervisor farrell: thank you very much. thank you for the presentation and for being here. having been briefed on this, i have no questions. colleagues, do you have questions? ok, with that, we will open it up to public comment. are there any members of the public who wish to comment on item number three? please line up here on the side. everyone will have two minutes to speak. >> thank you, supervisors. my name is david, director of housing development for community housing partnership. chp service formerly homeless tenants at all of our buildings in san francisco, and as such, we have used the losp at a

number of projects. we have five buildings that have losp contracts, to the more contact serving an additional 145 tenants for which we hope to have losp contracts in the future. this is a fantastic program. the arlington is a fantastic project, so this contract deserves our support. the federal resources available to support supportive housing are simply insufficient to meet the needs of creating projects, creating units for homeless people in san francisco. san francisco would not be of the meet its goal of ending chronic homelessness without this program. the program also saves city money, because i supported the local operating subsidy, we're able to put people in high quality housing at a lower cost than it would be to leave the homeless. i urge you to support the local operating subsidy program and specifically to support the contract for the arlington losp.

thank you very much. supervisor farrell: thank you. next. >> good morning. i am a senior project manager at the tender would -- the tenderloin in a neighborhood association. i want to give strong support of the losp than the 10-year plan to end chronic homeless is. we are a nonprofit development organization. we total about 2300 units. we have nearly 100 formerly homeless households in the tenderloin and the mission the benefits from the availability of losp funding. we expect another 172 tenants at our latest development that will come online this fiscal year. losp is critical as a tool for the homeless in san francisco. it is able to leverage millions of state, federal, and private dollars to help people but homeless as behind the. we believe that losp makes san

francisco and national leader in its approach to ending homelessness, and that is of the oil should be very proud of. we encourage you to preserve losp funds for the arlington. thank you. >> good morning, supervisors. i am from fiscal community services. we provide shelter, behavioral health services, education, employment, and senior services for homeless people in san francisco. since 1994, we have provided supportive housing, helping people end homelessness in their own lives. today, warehousing and providing social services to 1000 formerly homeless men, women, and children at nine sites. i am here and supported the resolution before you, authorizing the execution of a 15-year losp agreement with mercy housing to provide subsidies for formerly homeless single adults at its arlington hotel.

we have in place and $8.7 million losp agreement for subsidies in our bishops swing house which reopened in 2009. 134 men and women live at bishop swing. all were chronically homeless at the time of injury and most came in with physical, mental, or substance abuse challenges. our residents average annual income is just over $8,000, and without the losp assistance, nearly all of the residence at bishop swing would remain in shelter or be on the streets. our local -- the losp evidence is san francisco's great commitment to providing effective solutions for otherwise unhoused people. this is important in times when other funding services have diminished. [bell rings] and i join my colleagues in urging you to approve the losp subsidy for to mercy housing for the benefit of the arlington

residents. thank you. >> good morning, supervisors. i live in -- [unintelligible] i cannot tell you and of how good it is to have these services. and a word of change when it comes to me, -- [unintelligible] after being homeless for several years. so we needed those funding. thank you. supervisor farrell: thank you very much. next speaker. >> hello, i am the site program director of -- [unintelligible] i am here to support the losp program. my program was one of the recipients of the funding. we were able to leverage the funds that were otherwise not available to keep us open in the mission. we house about 87% spanish

multilingual speakers, of which all of our staff are bilingual. without this subsidy, we would not be able to give culturally- all the services to our tenants. 48% of our tenants are zero income, and the average income is less than $2,500 a year. on behalf of our tenants, our agency, we're here to give strong support to the losp program. thank you. supervisor farrell: thank you very much. are there any other members of the public that wish to comment? see none, public comment is closed. colleagues, we had this item before us. i would like to entertain a motion to refer this item to the full board of the committee report with positive recommendation. motion made by president chiu. we take that without objection. item number 3. mr. clerk, can you call item number four, please? >> item number four,