don't think that's the direction that we should be going. that we should be going. i think thate% with a nonprofit status should be paying into the transportation system and because of that i would much prefer a different approach as opposed to a blanket exemption. i actually would much prefer having a higher level of square footage exemption to we are able to hold some of the smaller nonprofits harmless. that's rather the approach i would go on this regard so i would be voting against that amendment. over all i think it is the right direction for us to move into in terms of being able to get more funding for muni and i don't think a blanket exemption is the right way to go but to have a square footage level that is different or a higher level of exemption. i know we will take the amendment as it comes and so we'll vote on this. and if there is enough support for the amendment then we'll evaluate a different higher level.

that is why i will be voting against the amendment. thank you. >> president chiu: i will be supporting supervisor elsbernd's amendment today. i think that it doesn't make sense for a simple renewal at this time for us not to continue existing policies. that being said, i absolutely agree with the transit community, that we need to have a real dialogue around long-term funding solutions for our transportation system, and i want to reiterate, my appreciation for the good faith commitment made by leaders in the nonprofit community, that we near future, and having a dialogue about nonprofit involvement with the potential transportation sustainability program, which is currently undergoing environmental review. i think we need to do that. we have to figure out how all of us, that have impacts on the transportation system, are helping to ensure that we're paying for that. and we also have to make sure that all of our residents can

access, through transit, the nonprofit community provides. so i very much look forward to that conversation, and i'm taking on good faith that we are going to have a real conversation about that in the coming months. but with that i will be supporting supervisor elsbernd. any further discussion? colleagues, let's take a roll call vote on supervisor elsbernd's amendment. >> clerk calvillo: supervisor mar, aye. supervisor olague, aye. supervisor avalos, aye. supervisor campos, aye. president chiu, aye. supervisor chu, no. supervisor cohen, aye. supervisor elsbernd, aye. supervisor4v( 0ñ farrell, aye. supervisor there are nine ayes and two1pi53 >> president chiu: motion passes. any further discussion, colleagues? on the underlying ordinance as

amended, roll call vote. >> clerk calvillo: supervisor mar, aye. supervisor olague, aye. supervisor wiener, aye. supervisor avalos, aye. supervisor campos, aye. president chiu, aye. supervisor chu, aye. supervisorccpz cohen, aye. supervisor elsbernd, aye.nwp)> president chiu: the ordinance is passed on the first reading. supervisor kim are you prepared to go back to item 13. >> supervisor kim: i am but i would like to rescind my vote on item 14. i'm sorry i was still settling in and working on amendments for item 13. >> president chiu: a motion to rescind item 14, seconded by supervisor campos. without objection that vote will be rescinded. roll call vote on item 14. >> clerk calvillo: on item 14, supervisor mar,l)ãñ no. supervisor olague, no. supervisor wiener, aye.

supervisor campos, no. president chiu, aye. supervisor chu, aye. supervisor cohen, aye. supervisor elsbernd, aye. supervisor farrell, aye. supervisor kim, no. there are six ayes and five nos. >> president chiu: that ordinance is finally passed. let's go back to item 13. madam clerk, did you call that item? >> clerk calvillo: item 13 was called, mr. president. >> president chiu: okay. supervisor kim. >> supervisor kim: thank'" time, as we worked on amendmen amendments, final amendments to this whole appropriation. i do also want to recognize that young lee or deputy superintendent of budget and policy is here to answer questions from board members as well. i did, just because there's been so many narratives and so many questions around the supplemental and need for supplemental i wanted to go into

the framing of where this is coming from. as many of you know california is the 9th largest economy in the world and we educate one out of eight children in the united states. california currently ranks left in teacher to student ratio, we rank last in library to student to student ratio. over the last five years, 2007-08 the district has been cut by 146gjtgç million. this past year alone the state budget cuts were 77 million. for every student, the district should be receiving@gj5é $6697,0 $5204. the district has had to cut nine and a half school days to furlough days because of this. that's nine and a half less school days for us to teach

reading, math, science, you name it. but yet we expect our students to graduate on time and to be just as successful as other students with"ej3w nine less instructional days. as a teacher i just want everyone to understand the pressure that you have in fulfilling your lesson plans when you have nine less days to teach the students the same amount of information that you're expected to. five years ago we were ranked 38 out of 50 in( jó the country anr people spending. today ?j x8ñ are ranked 47th. all of the southern states in the u.s. that make far less than we do in our tax dollar base spend more than we do on per people spending. in response to this in 2004 san francisco voters passed a measure to counter this. parents knew that although we were once first in the country in our public school system, not just k-12 but also higher education that we were neveris% going back there. so parents put on the ballot a measure called proposition h so we could ask the city to spend a

morgs of our tax dollars to enrich our public schools. i know as a policy set asides are a controversial issue and agree they tie hands of legislators and city officials in how to prioritize budgetary dollars but we heard affirmative support from voters saying they of those dollars will go into our public schools, starting at 10 million and going up to 60 million. as a school board member i try to visit all of our schools and i visit schools almost once a week during the school year. and i can't tell you what an incredible impact proposition h has made in our schools. you actually see libraries in elementary schools, that hadn't been open in years, they didn't have librarians to put books in their proper order. you started seeing art classes being brought back to middle schools and sports and pe brought back to high schools that had formerly been cut. we were able to fund more

counselors and many other things. i think this fund is incredibly important. but as you know over the last five years the city has also experienceexperienced deficits. because of that we begun to pull on something that is known as the prop h trigger which is when we project 100 million in give to the school district. over the last five years, we have pulled 74 million from our school district.8srz now, last year, when we pulled the trigger again, i think that many of us saw that we had -- we were expectingynnj= another structural deficit as we've seen in the years before. but as we got closer to the night of june 30, i started to see actually that our budget had grown in a positive direction. and i was concerned that, as the states continue to cut our schools that we weren't able to backfill those cuts.

i wanted everyone to understand where this supplemental is coming from. it came from what i was seeing wanting to give a small piece back. unexpectedly the school was cut from its after school funding source which is our 21st century funding source. it had been a late cutaupz; so e school district had not prepared to backfill it in their budget process as well. at the same time in july the school district had also begun to pull the data in terms of how our first two classes in our high schools, that were expected to graduate a-g on a standard that our cleedges, uc and usc system expect students to graduate in how they were doing. what we learned then was that close to 50% -- sorry, i want to make sure i get these numbers right. i'm sorry, that 45% of our juniors in the class of 2014 were off track to graduate in

time with the a-g requirements. that represents almost 2,000 students. accord to this data, only 84 out of 332 african-american juniors were on track. and onlytjp)h 265 of 821 latino juniors were on track to graduate. we also found that 487 chinese graduate. i said this before, but i want people to understand that these students are the students that have stuck it out. in fact many students have dropped out before their junior year. we lose 50% of african-american students between 9th and 12th grade. these are students that are stb sticking it out and we need to ensure that they get the credit recovery, evening classes, the targeted support they need to graduate on time next year. that is where the supplemental has come from. people asked if this is a one-time ask for the school district.

yes it -- while it is a one time ask for the school district i want my colleagues to understand i introduced the supplemental because i think it's important for us as a city body to support our school on thisfjpfw very is. it's not the school district that came to me asking for this money. this is something i felt was the right thing for us to do and the right way to spend our statewide reserve funds. unfortunately, in these discussions, we've found that, as our revenue has done better, and many of you have gotten the report from our controller today that our budget actually grew a little over $50 million since june 30, that many of our baselines have gone up. one of them of course is our public school's baseline. so one of the amendments that i'm introducing today, that you currently have before you, is that instead of pulling the entire $2.7 million that has been requested -- that i'm requesting, that -- from the statewide reserve fund that a portion of that $1.4 million comes from our school district set aside funds.

this is our baseline for the public schools. the remainder amount i'm still revenue -- reserve. in addition i'm also asking for a second amendment. so the school district has -- found an additional 200,000 that it can contribute to this $250,000 from its proposed budget of what it would like to spend on credit recovery program. so the entire appropriation -- amount is now going down to $2,205,000. so those are the amendments i'm putting forward today. i just want to take a moment to really appreciate the school district because i know that you've had to work really hard on this budget. i know it's a small amount of money and i want to appreciate richard carranza, janet schultz, ms. lee, and -- on the school

district end coming up with a program that we can use to benefit our juniors and sof morse that are currently not on track to graduate. i want to thank our school boar particular sandraspj8d feuer, jill wins and our future incoming board member matt haney for being engaged in this process and our many community advocates from coleman advocates, young community developers, chalk, our youth commission, and also members of the san francisco parent pac for their involvement in this issue as well. colleagues, if there4p%( :g ary questions, myself or deputy superintendent lee are prepared >> president chiu: supervisor explain the specific numbers that you're amending. and because they did involve some changes from6( qd) initial proposal and there were i know a couple of additional sources of money from the school district to patch in some of the funding you were looking for.

if you will explain it again. >> supervisor kim: i started from the sources. so i'm reducing the ask from 2,705,000 to 2,205,000. this reduction comes from two places. one, the school district was able to find 200,000 in savings that it is willing to put into this program. on top of that the school district has agreed, in its conversations with the mayor's 250,000 from its -- from the initial ask. so in our community based satellite center, instead of allocating 200,000 in the proposed budget we would only allocate 150,000. and in targeted support we would reduce that amount from 300,000 to just 100,000. the second amendment that i am amendment language in front of you, is to change the sources. and so we are requesting that

1,412,000 come from the public school baseline, and that only 843,000 come from the state revenue loss reserve. >> president chiu: thank you. supervisor kim has made motion to amend as described, seconded by supervisor mar. is there further conversation? supervisor mar. >> supervisor mar: i know ourwy controller, ben rowsen field is here. because of the issue dipping into the rainy day fund came up at our last meeting let me ask the question. so this will not touch rainy day funds and it's coming from the school district's baseline set aside funds. is that right, mr. rosenfield? >> ben rosenfieldenfield, controller. that's correct, supervisor. the amendment that's before you thatd%( su supervisor kim has m, is it not draw from the rainy day fund for schools but instead draws from available balances from the public education baseline that's available from

prior years. >> supervisor mar: thankó0jpz y. i wanted to acknowledgeq j"z m, the deposit superintendent here and thank him for the great work not only as a partner with the city but making sure that there's a great support as we hopefully reauthorize the public education enrichment fund or prop h for future years, and also continue with the rainy day funds for the future. i also want to acknowledge here and coleman advocates and many of the youth commissioners and others that advocated for this equitable use of funds to support the almost 2,000 students that are in our high schools as juniors that may be on track to fail, and not to gain their high school diplomas without this support from the city. it is a crisis in three semesters that we have to really support these students. that's why i saylçt!td like supr kim said it's about equity and

support this effort. so i really applaud supervisor kim but it's the youth movements and coleman advocates and others that have led from the campaign for the a-g requirements to support high school students to be able to have opportunities for college and higher education. african-american, latino and english-languageojsqy lerner advocates in pushing for this as an equitable and just measure. everyone else that has worked on this. >> president chiu: supervisor chu. supplemental value i wanted was correct. you're looking at 2.7 supplemental reducing it to 2 2.205. it looks like the source of funding you're suggesting is 4.412 from the schoolw5hhheñ dit set aside funds and the balance from the state reserves?

>> supervisor kim: that is correct. >> supervisor chu: the balance was more like -- >> supervisor kim: i thought it was 843,000. >> it probably should be 793,000? in front of us. have the balance come from the state reserve, correct? okay. so i wanted to clarify that, and glad that that was amended and changed. i know that young and other folks at the school district have been working hard with the mayor's office to work on that number and really trying to work that number down in a way that didn't jeopardize the credentialing program so i want to thank the school district for making the effort to do that. so i am very supportive of the reduction to that level. i think that's a good sign. the area where i still continue to have problems with the supplemental has to do with the source of fundings and i think expressed before. i think that itwx::t+z is -- ifs the school district who is indicating to us that this is a

top priority of the school district i do think that it is incumbent on the school district to also put some funding into the supplemental, even if weij@ are -- i know there's a lot of controversy around using the rainy day funds. but even if it wasn't the rainy day fund that was available the school district has, at the end of the year, the 26 million in fund balance. and it is true that the school district does project that they have future year deficits, but many things can change. as we all know with a budget, as the economy changes, as we get better revenue forecasts we have a different understanding of the budget and can adapt to it and balance to that level later on. so i really do think that taking a look at some of the funding sources here, it really ought to come i think from a place where the school district says it is their priority and that they're willing and able to use rainy day funds and even not that the reserves that they expect to have towards the end of the year. again they ended last year's school year with a fund balance

of -- this year of 26 million. fundamentally i don't disagree with the usage but i think the source of funding is important for the city to consider especially knowing that we have other impacts that may flow down for us. so i will be -- if i could take the amendment in two parts, one to reduce the level of funding from the 2.upon million to the 2.205 and separate out the funding source instead of it coming from the state revenue loss, coming from the rainy day. >> supervisor chu asked to divide the question on the amendment. we will take those two at the appropriate time. further discussion on the amendments. supervisor cohen. >> supervisor cohen: thank you very much, mr. president. good afternoon, everyone. many of us have spent a significant amount of time speaking with the young people

that have come to lobby with us, parents, and the school district about this particular issue. what's very clear to most of us, certainly to me, is that we have a significant and alarming issue that we have to deal with. almost 200 students in our city are not on track to graduate from high school -- excuse me, 2,000. 2,000 students, a large number of them, largely coming from district 10, the bayview, visit visitacion valley. we know one of the greatest economic barriers and disadvantages to our youth can -- disadvantages that our youth can have is not finishing high school. we see it every day. and in looking at the school district's data it's clear the vast majority of students that are not on track to graduate are students of color and those who speak english as a second language, or english as their second language. i believe that, as a city and as

a member of the board of supervisors, we need to give this population of students additional courses, and an opportunity to invest in enrichment programs that can help some of the students succeed in school, if not all of them. additionally in reviewing our end of the year budget, and revenue projections, it's clear that our city is in much better financial position than we were a few years ago. and i believe that with the reduction in the supplemental that it's reasonable and within our means to support this request. thank you, supervisor kim, for your leadership on this matter. i would also like to stress to the school district leadership that's here that while i know you have -- that while i know that you have had to... contend with significant budget cuts just want you to know that we are supportive of you and watching and paying attention how you will account for these needs and costs for the budget

process in the upcoming year. i will be supporting this item but not the use of rainy day fund to support this program. thank you. >> president chiu: supervisor farrell. >> supervisor farrell: thanks, president chiu. thanks supervisor kim for bringing this forward. i don't think anyone here in the chambers disputes the need for this and you spoke well about it. i've always sped if you're going to spend dollars spend it on your kids education and i agree with that. i do have a question as well about the source of funding. in terms of rainy day funds not knowing before the school has anticipated budget surplus going into this year, pulling it from state reserves right now with a $15 million state reserve, i guess i would like to ask ms. howard, pulling it from state reserves, we have 15 million from state reserves right now budgeted, and we're going to take some money from

that according to this amendment. question is, from your point of view, from the mayor's staff and from budget office, what are we anticipating for, you know, state cuts, that we haven't seen yet? if it's less than 15 million we should talk about it. if it's more than that then i don't understand why we're doing this. >> thanks, supervisor. kate howard, mayor's budget director. so you're correct, we have allocated $15 million this year for state budget impacts. we expect to go forward, and i think i've talked to many of you previously about a state supplemental in the early part of the next year, covering childcare cuts, healthcare cuts, as well as other mostly in human services agency. that's in the neighborhood of $8 million. i think the bigger question for us, in terms of what are the draws on that, what other draws might be on that, are what's the

impact of the federal sequester and the fiscal cliff. so we're certainly hopeful that the federal government will get its act together. but right now, what we're projecting, if the fiscal cliff and the federal sequester were enacted as it is in law, it would be about $26 million, in additional impacts to the city, and that's everything from hiv and aids services, homeless, cdbg funds for our community development block grants, it's a wide range of programs affecting kind of all -- sort of the whole range of social and public safety services that the federao government invests in through this city. so those are the kinds of concerns. it's a significant risk, i think. and that is why we looked so hard at other sources of funds for this supplemental. >> so the total on that would be

30, 32, and we have 15 reserve against it. so it's a question back to my colleagues, why are we doing this right now with this pocket of money? again fully support this money that. but why are we pulling from state reserves bh when we know we're getting a cut in a month and upwards of 30 million that we don't have allocated right now. that would be my question to my colleagues. >> president chiu: supervisor campos. >> supervisor campos: thank you very much, mr. president. i do want to thank supervisor kim and her staff, who have been working on this for quite some time. i also want to thank the members of the community who have also been advocating for the city, providing additional funding to the school district. you know, i've said this many times before, you know, that i do believe that we, as city government, have an obligation to support our public schools because we do have a situation where our federal government and

our state government are failing our kids. they are not providing the level of funding that is needed for us to have the kind of world-class public school system that our children deserve. and in san francisco, a city of great affluence to the extent that the federal and state governments are not stepping up to the plate, we have historically, as city government, done that, and that's why we have created things like the rainy day fund and prop h. this has been very clear from the beginning. but one thing that i did raise last time, and i want to make sure that on the record i get some assurances on, is the issue of the rainy day fund. the rainy day fund has -- was created for a reason, and has its own mechanism of how it works, and it's something that should stand on its own two feet, irrespective of what we choose to do or not do for the school district by way of a/%(

supplemental. so through the chair, i just wanted to ask a question of the budget director, or the controller, whoever it might be the appropriate person. i just want to make sure that on the record we get assurances that if this is voted on, and this passes, that it will not touch the rainy day fund. >> president chiu: mr. controller. >> supervisors, the amendment that's before you would not use the rainy day reserve as a source. so it would not draw upon it. >> supervisor campos: thank you. and i appreciate that. and i -- again, i want to thank supervisor kim for the fact that her office, and everyone who's worked on this, have been very responsive to the concerns raised around that. again, we believe that the supplemental is appropriate, but that in doing the supplemental that we need to protect the funding that was -- that is there through the rainy day

fund. so in light of that, i will be supporting this measure as amended. and, you know, as to the general question of why now, and why this source of funding, i think that there probably different arguments as to why one source of funding is better than another, and as to why, maybe it's appropriate to wait or not wait. my own personal view is, you know -- and i understand people may have a different perspective -- is i do think that we have a crisis in san francisco. happening in our public you know, we have one of the highest performing urban school districts in the country. we probably have the highest we probably have the highest performing urban schoolt and, yet, in such a high performing district, we still have a number of young people who are not doing well for