in the city too, but they have san francisco experience. and it's important whether through the planning process or the commission process or the board process or through the building department requires a knowledge of what it takes to get through that process. as opposed to coming and sort of saying, well, i did this in st. louis, i can do it anywhere; right. so we really wanted to sort of encourage those folks who have been working in the field, providing affordable housing to take on this responsibility. one reporter early in the process asked me, these developers will get paid millions of dollars, won't they. i said they will get a developer

fee from the mayor's office schedule. it's barely enough to compensate them for two things. one the time they take on the development and the risk. these developers in san francisco are guaranteeing that tax credit equity and the repayment of the debt on the property. and in exchange they get less than the maximum developer fee, because that's the city's practice. and they get a restricted cash flow, because that's also the city's practice. and in part because we subsidize those developments or heavily. the developers are doing this in part, because they are part of the solution and part of affordable housing system as the case may be. and trying to assist the housing authority in this process. >> what other structures make

san francisco unique, you referenced in the rfq, and talked about we have providers, and what else in terms of financing? >> it's the financing, what the board has put in my budget. it's what the voters have authorized as prop c. it's our history of supporting developers as they do affordable housing. >> with prop c, was it clear to the voters that prop c dollars would go to public housing? >> i think the whole question about -- it's about the question of preserving, and then producing affordable housing. and this is clearly preserving affordable housing. and i think we could -- if we don't save this housing and improve this housing as affordable housing, and spend the rest of the time building new housing.

this is actually more cost effective if you want to do it on dollar and cents basis, but also san francisco residents deserve better housing. we are looking at this as part of the mayor's goal for affordable housing and as we look at the pipeline of income and pipeline for new family housing and supportive housing. this is something that is clearly in the guidelines of prop c. >> it seems laced up to use prop c for building, rebuilding affordable housing. in rad it's a lot of community housing developers. it's almost locked in to be this way. that we would have developers operating and managing the sites. so we are also losing dollars on

the other part of the affordable housing as well. >> hopefully we will expand capacity through other things. but you raise good points, these are some of our familiar developers. and because they have the experience with the form of the financing. and they also have the confidence of the outside len r lenders and investor that is we have to seek out. and they also will pass the hud test. they won't take our word for it that these are good developers. hud will review it. and the investors will have say whether these developers selected by the housing authority pass the mustard or not. we do like them and feel they are confident, but we are not the final word on this. there is at least three other

groups of people that will decide if we made a good choice of the developers or not. >> who are they? >> the lender will be lending money to the developers, and they will decide if the developer is capable of returning the money. or the guarantees is worth the paper they are executing. the investor that will be putting the money up and buying the tax credits. they will want to know if this developer has a track record of owning and managing tax units, and if they screw up, they it will pay for the cost of the development. and hud. hud wants to know that these developments will be affordable. and managed well for the next 20 years. >> and who is the lender and who is the investor? >> we don't know yet. >> who is interested?

>> i think that everyone is interested. the housing authority will be doing an rfp and rfq, rfp for lenders and investors. and the goal is to obviously to get the best price to do more work for the developments. so moving on. where we are now, we will seek the approval of the section 18 applications. the developers continue their due diligence at the properties. the goal is to extend the bond by january and begin work by june 15. part of the reason why we don't have lenders and investors right now. we want the developers to get onsite, to look at the buildings, work with the residents and determine the scope of work and get a costing on it. we had a consultant do a

preliminary estimate of the cost. but that does not sort of substitute for developer and contractor trying to get the cost of the particular development. so we talked a little about -- so we talked a little bit about, and the questions were raised about what does this do for the reside residents; right. one there is no change in how the rents are calculated. no rescreening. again this is not a demolition program. so hopefully we will not have people out of their units for less than a short period of time. and no displacement. the other aspects for the

residents. this is a long-term affordability. we are not selling off the land. it's not going to some other corporation. it's being held by the housing authority, in terms of the 99-year lease. there is a 55-year tax credit affordability requirement. there will be requirements related to the project-based rental assistance contract. mocd will have secondary loans on the property. to ensure stewardship of the sites as long-term well-run affordable housing. the residents will have the same eviction protections. will have the same affordable rents. will maintain the same grievance procedures, and maintain the right to file complaints with

housing authority and hud. there was some mention about the wait list. this remains a centralized wait list with some modification. residents on the wait list with identify specific sites they wish to be preferenced for, but it's a sprlized -- centralized wait list. >> just to point out the same protections and the same standards, is that going to be codified? >> it would absolutely be codified at some point, whether in the land agreement or loan agreement, it would be codified. >> are we able to apply a city-wide standard as well? >> our goal is to do the best practice. whatever they are. we will work with the tenant adsoicaa

advocat advocates, with the tenants themselves. this is an opportunity to change things, to blur the lines between affordable housing. and take the opportunity to figure out what works best. >> and we talked about transfers from one. >> that's an issue. the whole question of transfers. we have spent a little time talking with the questions of transfers. and i think the questions of transfers is really a fu fundamental goal of getting residents in the right place. whether it's seniors who need more intensive housing. so they need to go from public housing to senior housing with ground floor adult bay. so they can stay independent. if it's a disabled person in public housing who needs more assistance in terms of a supportive housing environment. how do we get them into the right housing. or the other way.

a person who is in our supportive housing and who has been stabilized. can we use sort this opportunity to find an exit for them. we don't know. we don't have the answers, but we are asking the questions and thinking about this. not in just terms of transfers you talked about. but can we do this in the rules and regulations of fair housing. and can we get people on the right housing so their needs are met. and that's ideally a goal of this process. the other part of this is about the residents associations and how they are being supported. that we will continue to do that. and i think again the nature of this work in terms of resident engagement. we are working with the housing rad committee and national housing program, enterprise

foundation and city-wide counsel on senior and disabled. we will work with everyone in this process. there is going to be change. and change is always difficult for everybody, including residents and including developers and including other folks and including the mayor's office of housing and community development. and will be on us to ensure that we are providing adequate nom information to all of those group groups. one of the first thing that our developers will do, is to meet with the residents and talk to them about the needs in the buildings. there is ongoing work through the housing reg's committee and other resident-related organizations. and make sure that not only do the residents have the appropriate information but that the developers have the appropriate information of what it means to take on this

endeavor. and lastly on this question of the resident engagement. who is responsible for all the things that i have promised at this podium? it's both the housing authority and the mayor's office of housing. the housing authority will continue to own the land in this process, again a 99-year lease. the mayor's office of housing will continue to be stewards because of our ongoing relationship at the bond issuer and lender, because we will have debt on these developments. we as asset managers and lenders will be always be involved in how these projects are managed in the future. at this point i will turn it over to the president of the housing authority. >> good afternoon, thank you for

having me here. i am here to speak briefly about our employee engagement at this time related to the potential impacts of the rad program. and what it has on the employees who serve our public housing residents here in san francisco. we have developed what is called the care initiative. communication, action and resources for our employees. to make sure that we are providing an effective change management to those who are serving the residents. and we have establish eed dates and milestone its of communication to those employees. we want to be accurate in terms of how we are talking to folks. in transition, and doing that in small groups and the employees. and again this is a development process and as needs come up and address them appropriately and tailor the needs to the bargaining units with questions on this process.

we want to have opportunities onsite for feedback, the acting director will make themselves available for one-on-one meetings that those questions can be answered. and support workshops for people to explore options outside of the authority if they choose. and so that people can see what is being talked about and that those are updated. and to provide those in newsletters and touch as many people in the housing authority with as much information as possible as we can. this is a phased process. we are looking at employees being affected in june of next year. the second part of that will happen in june of the following year. again june of 2015. june of 2016 are estimated

times. and we want to make sure that we are doing everything we can to support our employees through that process. we want to make sure that we are communicating very simply and directly about any updates that we have on each phase. so that the people can make the appropriate choices for themselves and their families. >> what kind of updates and accurate information? what could the information? >> it could be is there a rumor mill going on in terms of what is happening to employees. is people going to be laid off today. and we hear that notices are coming out right now. >> so they are (inaudible). >> yeah, and to make sure that, that was not going to be the case. and they could hear from not only the commission but from senior staff at the housing authority. >> under your understanding is layoffs inevitable or possible? >> there will be impacts to the

housing authority and the employees. and that's something that we have made clear, i will talk about in a moment. and that's why we are creating options. for those employees. >> how many are you expecting? >> we are looking at over this two-year process about 100 employees will be affected. >> out of how many? >> what is the total number? of the 100. of the 100. >> no, in terms of the overall employees. >> 100 out of how many? >> around 250 employees. so 100 of those may be impacted. and again i want to be sure that is understood that something is happening in two phases over time. >> can i ask a quick question, of those 250 employees do any of them live in public housing?

>> yes, they do. >> do you know how many? >> i do not. >> how many live in san francisco? >> i believe that a majority of them live in san francisco, i can get those numbers. >> a large number live in public housing? >> i don't have that number but can get it. over time we are looking to make some time to have strategies in plan for employees. and to allow for employees to be absorbed in programs that may experience growth. the document that is talked about, we want to ensure that housing developers that are taking over management at properties will interview those employees. they know the people that live in public housing. they know the issues with the buildings. they should be interviewed because of their expertise and time and commitment to the authority. we are also committed as an

authority talking with other employers to ask them to inform us of job opportunities of staff, including the city and county of san francisco and other bay housing authorities. and we want to be sure that if the employees hear of those opportunities to communicate to senior staff so we can get that information to employees and they can take advantage if they choose. with regards to communications, back in jan 6 we were advised that the housing authority was approved for the rad notification. and we wanted to meet and confer over the impacts of the program. and over a week we spent a letter to the bargaining units and a week after that sat down to have those meetings. to date we have had seven

meetings with sciu and two meetings with special organization and three meetings with specialty crafts and to be specific about those employees that may be impacted. currently in negotiations still with all labor negotiations with the employees that work at the housing authority. we believe they have been very productive. we have a lot of work to do still. but to ensure transparency with everyone, we made promises and even items that don't need to be approved for action. we wanted to hear them at the full commission and at the recently established committees. at the residents of operation committee and finance committee. so that everyone has a chance to hear what is going on at the

same time we do. just to conclude again, as we finalize the presentation. we should view this opportunity as one, that provides better housing for our residents. we are talking 27,000 residents that can benefit through improved living conditions through this program. and those are leveraged through $440 million in tax equity debt. and the mayor of the housing authority said $560 million in rehabilitati rehabilitation. and we said that capital budget had $5 million in the bank to deal with needs. and lucky to have that go towards elevator repairs at needy sites. we want better management from housing developers with better

expertise for the benefit of our residents. thank you very much, and we will take questions after public comment. >> thank you. i have a lot of questions. but i think supervisor avalos, i want to go ahead and open for public comment. you want to take a break? okay. >> one minute. >> yeah, me too. we don't have a quorum if one of us leaves. we will take a five-minute break and be back and open it up for public comment.

>> okay, we are back, and thank you for your patience. i want to make the time during

public comment efficient. so i ask that you stay within your two minutes. so that you respect other speakers who have been waiting here for a while. i will call a few names, i ask that you line up to your right. and walk to the podium and as soon as someone finishes speaking. come on up to the podium and you don't have to wait are in your name is called. i will start with charlie walker, ace on the case, michael brown, rico landry. mr. walker. >> good evening, i would like to compliment you for calling this hearing. and i am very upset over the fact that that man over the housing authority stand here and tell you a deliberate lie. they are selling those units to those developers.

i am involved with one of the companies, the only black company that bid. there is no black company involved in their construction. they think this is a joke of theirs. but for him to stand and tell you they are not doing demolition. they are already doing demolition. and he has no respect of you as a supervisor, and stand here and tell you a lie, they are not going do that. they are going to tear down potrero hill, and those places are already falling down.