are reaching folks who need these services to remain in their homes but with the additional staff i think you are right, we will be better positioned to hit that next uptick which i think is coming. i want to mention sort of the question may come up, why not go to a service center model or service center model with ihhs, and it's a different type of program than your typical eligibility program. it's not just getting you on cal fresh benefits or getting you cash assistance. our social workers are doing case work and working with clients and consumers every day. they are building relationships. it's really by its nature a case load design program so it really doesn't lend itself to the more generic services as our other eligibility programs. so the last two slides are really what i've called the tech nical slides. first is

our cal end information system, the information system that we use to determine eligibility for our benefits, medical, cal fresh, cal works and cap. because of the significant changes needed to this information system to implement the affordable care act, the state has provided additional funding to do these software changes and upgrades and you can see they are listed out there but this is basically just spending authority for the almost $2 million from the state to make the changes to our system. and the last slide, although it's a big number, it is really just an accounting ear technical change that reflects the new way that the ihhs program is funded. so the old way, which is reflected in our budget now, is the county expends dollars locally on the program for the staff, our contractor, then we snit a

claim to the state and then they reimburse us with federal and state dollars for their share. so there still is a county share of about 27 million but we get reimbursement from the state and the feds. that share in the old world, the cost to the county could fluctuate, go up and down based on growth in the case load or decreases in the case load in the old funding model. in the new funding which is based on what's called maintenance of effort, the county share does not fluctuate any more. there is an annual 3 percent escalator, but in terms of we see a significant growth in the case load, to your point, supervisor mar, we are not going to see a commensurate increase in county costs. it's fixed at that 27 million number again with a small escalator. but because of the maintenance of effort it changes the way we submit our bills to the state, if you will. we still have the local costs, we have our case workers, we have our consortium and the public authority that

total about $107 million. our county share of 27 million is still fixed but we not only need to pay the contractor and our staff but we also have to provide this maintenance of effort payments to the state. so basically what this piece of the legislation does, it gives us the spending authority to provide that $27 million to the state but then it also gives us the revenue, realizes the additional $27 million in revenue that comes back from the state. so you can see the table, we outlay $107 million for our services, 27 million to the state as our maintenance of effort payments, we continue to draw the share so it's a wash. it's general assembly cost accounting. this is an overview on what

will supplemental is. i'm sure we will discuss when mr. resolution gives his report, but i do want to leave you with this. the way that county human service agencies work and are funded, everything we do, we are a political subdivision of the state, we are required in state code, every county has to have a human services agency, the state is who decides how much funding we get. they look at case loads, they look at new cal works mandates and they decide how much we should be funded. in this case they decided we need 8 million more in cal worbs, they decided we need 7 million more to manage our cal fresh case loads and the like, and they are providing that money to counties. if we don't use the money essentially what we are telling the state is we don't need your

money, it's okay, thank you, but -- i understand mr. rose and his team are doing their analytics and they are doing their rigorous work, they are not looking at whether it's county drars or state dollars or federal dollars, it's all taxpayer dollars and their analysis are sound. but i want to leave you with that, it's a message to the state that we don't need the money to support our most vulnerable is difficult when we are back lobbying saying we need this, we need this, and the governor can say, well, you didn't spend the money we already allocated to you. i will leave you with that as a thread of discussion looking forward to the budget analyst. >> thanks. any other questions right now? >> you said thread or threat? >> thread, with a d >> just joking. >> okay, if nothing else at this point, i know we will come back. mr. rose, can we go to

your report, please? >> yes, mr. chairman, members of the committee, first of all let me state that san francisco residents, supervisors, as you know pay federal, state and local dollars. they are all taxpayers' dollars so, yes, mr. rourke is correct that we look at these reports to determine whether or not the funds are justified. it doesn't make any difference if it's local, state or federal, it's still taxpayer dollars being paid by san francisco residents. in fact, under that theory, we shouldn't look at the airport or the port. those are not general fund dollars. i just want to emphasize that. and so the fact that the state allocated the money and said this is what you need, maybe the state needs a budget analyst. i don't know. >> we can recommend you, mr. rose, if you want to go to sacramento. >> thank you, supervisor. now getting to the details of our report on page 5, the

bottom of page 5, as shown in table 4, the proposed ordinance would appropriate 31.5 million and that's as mr. rourke indicated for new state and cal revenues ascribed to 5 different hsa programs to pay for different expenditures including contractors, client services, training and marketing and that's shown as i say in table 4 on page 6. on page 8 of our report, we note that table 6 details the 68 total positions being added by program for a total of 16.85 fte's for fiscal year 13-14. and on page 9 we note that the salary and benefit costs for the proposed fte's in 13-14 would be funded by hsa existing

salary savings in the hsa 13-14 budget. as a matter of fact, the department has a total of surplus funds of 10.8 million. so mr. chairman and members of the committee, you might want to criticize, you might criticize the budget analyst for why we did not make further recommended reductions for this fiscal year. we always attempt to be conservative, anything we recommend we are very very conservative and are quite certain that what we have recommended will be far less than what the department could absorb and in this case they've got millions of dollars worth of unexpended savings in salary savings. by the way, that's been consistent, i might add, for the past several years in

this department. >> when you ask the department why there is such a big increase, what is their response? >> in terms of the salary savings? >> salary savings. >> basically, it's a problem throughout the city. it's with the human resources department it's difficult, there is turnover, when you have 27,000 employees in an operation, it is very difficult and there is attrition on an on-going basis, it is difficult to fill all the positions at any given time. >> mr. rose, hold on one second. mr. rourke, is there something specific just on that point? >> with an fte number of about 2,000 in our agency our natural rate of attrition is about 100, 110 positions, people resigning, it takes months to fill them, you go to a list, if there's not a list you go to an exam, so there is always this vacancy churn but it's

important to note that's not the same 110, 150 positions, right? it's different vacancies over time. you take a snapshot, you say there's 150 vacancies. if you take a snapshot two months later, there may still be 150 vacancies but they're different vacancies. >> what is different now these past 3 or 4 years compared to the years before that we didn't have any salary savings. >> we are now at a vacancy level of, i believe, 170. two years ago we were well over 220, 230, and that was a function of the recession years and trying to contain costs. we intentionally kept positions rather than laying people off, we intentionally kept positions vacant to give us flexibility when times are good we leave the position in the budget and then we can fill it when we have funding available.

we've slowly been catching up. even with aggressive hiring, we still have resignations, we still have retirements, so now we are slowly catching up. the process of the mayor's office has been much quicker but it does take time to catch up because we were so significantly basically understaffed for many years during the lean years. >> so do you have a timeline, a plan, for catching up? next fiscal year or is it going to be -- there is a general attrition that happens but it seems like we have vacancies that are well above what that is. >> we certainly have vacancies above the natural rate of attrition. some of that is because we intentionally kept positions vacant to control costs. we are hiring in both groups. we hired a lot of folks for the affordable care act. our training and staff development

team is more robust now so we think we will be caught up and sort of achieve our natural rate of attrition i would guess by the end of the summer, maybe the fall. because we are doing such an aggressive work in our internal hr department and in partnership with dhr and the mayor's office to fill funded positions and certainly as i showed in the presentation, the work is there. our case loads are growing across are growing across the agency . >> i am not being critical of the agency. we're not saying not give them positions. the positions, existing positions and in this case in specific positions that they are being requested which are vacant, can be filled from existing positions rather than creating

new positions. let me just continue my presentation. >> let's have you finish first. >> so we've identified, supervisors, on page, the bottom of page 10 of our report, the last paragraph there where it says that hsa has a total of 157.2. the department provided us with updated information and we now would revise that number to 152.2, or 5 positions less than the 157.2, and these are across the relevant classifications that we're talking to today. on page -- well, i can go now to our recommendations. first of all our first recommendation on page 12 is to reduce this requested supplemental appropriation by 1349.58, as i understand the department concurs with our

recommendation. that's recommendation no. 1. on recommendation no. 2, we're recommending with respect to all of these positions that instead of a hire date of april 1st that it be may 1st. as i understand it, the department concurs with that recommendation. so it is the third recommendation that we have a disagreement on. and in that third recommendation, based on the new information provided by the department that there are 5 positions which we had previously identified as being vacant which are in fact filled positions, therefore we concur with the hsa on the need for those 5 positions so we're withdrawing 5 positions from our recommendation. however, we continue to recommend a total reduction in the annualized positions by a total of 22 instead of 27,

resulting in the reduction from 68 to 46 instead of 68 to 41. and we continue to recommend that those 22 positions be deleted. i might also add, supervisors, you are going to get a budget in a very short period of time and if the department can justify the need for those 22 positions at that time we'll take another look at it and report back to you. so those are our recommendations and we would be happy to respond to any questions. >> so, mr. rose, i get no. 1, no. 2 i'll get back to you, but i want to ask mr. rourke about that. so you are not discussing about reducing 22 more. is what you are saying is those positions, each one of those actually has equivalent fte slot that exists today that are not being filled? >> in some cases there are existing vacant positions and in other cases, supervisor, we find that the positions are not

justified. again, we made a budgetary review like we do during the annual budget and we saw that there was not a need based on workload for certain positions. we have a disagreement. and again i want to emphasize i understand this is state funds, but we look at it from the perspective of justification because it's still taxpayers' funds. >> thank you, mr. rose. mr. rourke, as you are up here, first of all i get pushing from april to may 1. at best we'll get this through early may now. >> we could probably push to june 1. >> just on an honest realistic, you get funding today, really given the articulation, i get it, i get the frustration, how soon can you on board people? >> many of the positions are

actually the fte that appear as vacant, what's appearing as vacant is the permanent civil service position, for example the 2905 civil service position was showing as vacant when in fact that position is filled by a temp person. there's actually a body in the seat. what we hope to do is they've already been trained, they are already doing the work, is transition that person into the permanent civil service position. we have enumerated how many are filled with temps, how many have been tx'ed into another position. >> do you agree with that? >> supervisor, we got detailed information yesterday show wag we identified as vacant, what they identified as vacant, and we reviewed all of that. it is true some are filled by temporary positions but that doesn't mean that you need a new fte in the annual salary

ordinance to hire that temporary position. that temporary position could be filled with the vacant position they are currently filling. >> i'm not mr. rourke, how does that work, you have a temporary position, you want to move a person from a temporary position to a permanent position, do we still have room in our budget funding there to fill any other temporary position that could continue to arise? >> we don't have, if you go classification by classification, enough vacancies without adding new fte, enough vacancies to do that transition as miss campbell said. a lot of our positions have been tx'ed to entirely different classifications. as you roll through the 7 or 8 more more different classifications --. >> so you are going to see as you are moving some people from temps to --. >> into the new fte as authorized by the supplemental.

>> so you will see --. >> they go away. >> they go away. can someone from the controller's office verify this is the process for temporary positions versus permanent positions? >> i think it's a crux that we have here today. we have temporary positions that and we have permanent positions we want to create with the aso amendment and we have money for that. once staff from a temporary position moves to a permanent position, that temporary position would no longer be around any more. i'm concerned that we're getting double counted here from the budget analyst, i want to verify whether we're getting double counted or not, hoping you might be able to clarify how this process might work. >> i'm lisa sandler with the controller's office. with this particular supplemental we have

not looked yet at the portion mr. rourke is speaking to about what positions are currently being filled by temp positions so i couldn't speak to that. i think your question was to process? >> how does it typically work? there are a lot of temps in the department. mr. rourke says the positions we will be creating could be filled by many of the temporary employees, so i want to make sure that as that process happens that a temporary employee is moving to a permanent position, that we're going to see the temporary position go away where it's not going to be placed in the budget where there will be a position in the aso and money in the aao, so can you confirm what actually happens? >> my understanding of the kai temporary positions work, there's funding in the budget for the temporary positions but i have to go back and look at

how exactly the fte's are written. i don't want to tell you the wrong thing but i can get back to you about that. >> mr. rourke >> we fund the temp salaries through our salary budget. we have our $10 million in salary savings, that is where we fund the temp positions. the reason we have so many temps is to meet that workload demand. an example would be, pick a 2903 classification eligibility worker, if we don't have an existing list but we know we have bodies coming through the door that need to be classified for benefits, for those willing to take a temporary six-month job we will fill that position while we are con dupblting the exam. it's a way to meet our operational needs without having to go through the hr process mr. rose spoke of. >> i'm concerned we have this broad discretion within the

department to have temps rise and fall but never quite go away and you have a way to manage your budget to have salary savings at year end or not and it seems, you know, the control should be a bit tighter than what they are. >> well, i can't speak to the city-wide control. the control for us is our salary budget and the control is also the temp positions are limited to 6 months so that's a good control for the dhr as well as for budgetary control. >> mr. rosen, when you look, you mentioned a number of positions you are recommending are based on lack of demand. do you look at just the amount of fte's being used or do you also look at temp positions being used to fill certain parts of the demand as well. >> what we did is look at the workload justification for having a new position there.

for instance, in -- harvey wants me to give an example. basically in some of the units in our attachment we say there is insufficient workload justification. we look at what they currently have in temples of positions and how many cases they handle and maybe what some of the enhanced requirements are under the new legislation and determine if they really need additional bodies to do it. >> i understand that kind of analysis. when you look at the number of positions do you also look at the temp poeptions they have? what we are hearing is there's a ton of temp positions filling kind of -- back filling demand for services but the question is if you are only looking at fte's and equivocating and doing your math that way, we're not looking at what the demand is because we're also seeing what

the part-time people are doing. >> if you say you have 10 positions to do 100 cases, whether those are filled with temp workers or permanent workers isn't the issue. if they say they need 15 people to work those cases, we are saying you haven't shown why you need 5 extra bodies to do the work. >> if i can give an example, our supplemental request asks for two 9702 employment training specialists. we currently have budgeted 19.15 fte we currently have filled 9, so you just look at those numbers and say there's 10 vacant positions, why are you asking for two more? then you go across we have 17 temp exempt 9702 positions, so results in an adjusted count of

negative 8. it's difficult to get this data and we shared it with them a few days ago but that's what we're looking at sort of we're budgeted for 19, we have 9 permanent but we're being filled by temps so really the vacancy number is artificial. >> i think we can simplify this quite a bit. we had two different arguments. one is the one we just explained to you, we looked at workload, whether it's being filled by permanent or temporary. taken unfilled position and assign it to that task. that was the other side of our recommendation. when they gave us new information yesterday we in fact looked at five of those positions and we said you're right, those sht really vacant, you really do need the additional bodies, you need the additional positions. those

were in cal fresh and we have a revised recommendation today so we took that information and revised our recommendations so we think our recommendations are pretty sound at this point. >> so if i could just ask a little bit of a different line of questioning, so understand all the comments about these are taxpayer dollars, they are taxpayer dollars and i fully agree with that. as a city we have to look at things maybe a little different lens at times. some your comment about this is all state and federal funded going forward starting in theory with july 1, i mean is it the case that not only the positions you are looking to fill to meet demand, i guess the argument would be it's better to have state dollars fill it than general fund dollars, but no. 2 the future if you don't pull down from the state when they literally offer it to you, is it your experience in the past that that hampers future

allocations? i absolutely understand both sides of the argument about it's all taxpayer dollars and it all affects us and it does but i think sometimes as a city we have to make choices. it's like the central subway money, some people would say that's a lot of money but if you are going to pull 80 percent of the money from federal sources it's not like if we didn't pull it, the federal government would give the money back to the taxpayers, they would spend it and give it to another city. we're not going to put it back in people's pockets, it's going to go somewhere else. >> that's exactly right. as it happens it will go to another county, a county that can demonstrate it has spent the money and it has the need for additional funds. many counties, including ours, overspend our allocation. we may get $10 million for a certain program, medical is a good example, we may spend 12 million and it's a public

policy decision that we negotiate at the board and the board and the mayor say, yeah, well, it's worth an additional $2 million in county funds to support medical. what obviously is the legislature approves the budget, the entire appropriation goes to social services who then decides how to apportion it among 56 counties. they look at fte, that all goes into their calculation and they say, okay, san francisco, you get x for example the cal works program, the $278 million additional dollars, let's look at their historical program on cal works, wow, they have a robust program, they spend a lot of their money -- just as an aside we're not spending just to spend. we're not saying well we get it so let's figure out

how to spend it. when we get the new mandates we roll it down to our program analysts, okay, what is it going to take you to meet this new client demand. we need a unit of workers, we need an analyst and we need a unit of clerks. we do an iterative process within the department. it's not as if the need isn't there and we are just spending it, the need is there and the reason i made the comment about state and federal because we're fortunate, finally, we haven't been the last 5 or 6 years, where we didn't get funding. now they have the money to do it and they are providing it to counties. so if we don't spend it that means maybe contra costa gets more money. >> if we don't draw down the money from the state and we still have to meet a mandate. >> that's right. either we

meet our mandates not as well or we don't meet our mandates or in the case of ihhs, which is a great example, we have a mandate to reassess every ihhs consumer once a year. we are reassessing 48 percent of our ihhs consumers every year because we don't have the case workers to do it. >> there's a 31.5 million allocation from the state, our recommendation is to reduce it by $134,000 for certain administrative costs. i believe the department agreed to that. the positions are not being funded by the 31.5 million, they are being funded by salary savings in the budget. i know there will be a budget for 13-foerb coming forward in which there will be a new appropriation at that time. >> colleagues, any questions? further discussion? before we go to public comment, mada