the research that the city and county of san francisco have done so far that might help them and they're going to have access to that information? >> i told them they would have access to the information. on the market research side their concern it was a couple years old and none of our research incorporated commercial customers which they're interested in having and not incorporate anyone outside of san francisco and is a concern for them and whether to join up so they would have to do brand-new market research on their own. on the study side we have information and i hope that keeps the cost down on that side. >> what is the size of the customer base now. >> the size is about 130,000 although i haven't checked in for a while to determine the current numbers are but i want to say around 130.

>> all right. thanks. >> colleagues, any other comments, questions for the executive officer. okay. we can go onto public comment and it's open and seeing no one come forward we will close public comment and this is an information item or action item. we have a resolution with the packet with the 5,000. >> yes, there's the not to exceed 5,000 and the only action item needed today. >> okay. i will entertain motions whether to move forward. okay. motion by commissioner breed and second by commissioner mar and we will extend this for the study and we will take that without objection. [gavel] okay. next item please. >> item four consideration and approval of the final lafco

budget for fiscal year 2014/2015. >> jason fried lafco staff again. as i mentioned to you i presented the first draft budget at last meeting. this is the second required hearing. there is however a difference from last month to this month in the budget. if you look at your packets you will see there say re-- is a reduction in the budget. that was as the city and county of san francisco was going through their process and changes to staffing and how lafco can interact with staff i noticed an interesting difference between what we say our budget was and what they were saying and i did research and worked with the clerk and by state mandate the minimum amount that we can request be ag indicated to us and it's 300,000 so you will see the budget reflect the lower amount. once

again we do have enough in reserve to pay for one year of our budget but after year we will be below that budget and next fiscal year we will be below that amount. we're at 300,000 now in the reserve act so we can go one more year if we want to return the money and i will suggest that at a future lafco meeting once i review other lafcos and what is a good amount to have? we were up at a million dollars and we have spent it down and we should have a policy in place and most lafcos do and we should stay within the budget and be fine and the choice is up to you to return that back to the city and county for a year but let them know we're reserving our rights to the full amount in the future. >> what are we spending a year?

>> i went back the last years from what i consider our general fund, not the city's fund but lafco's account. we tend to spend 100,000 or 125,000 a year and most goes to the clerk's office for clerking the meeting but also the back office, hr, it, copiers and that goes to them and the bulk of the money and the rest is paying for miss miller's time to do non cca work which i will now take over so we should be okay if we follow the patterns. if there is a interest to do things not cca related we would need to have a discussion but we can have that discussion as time moves on. >> okay. i am just reviewing the chart here that you provided with the budget. it seems like

the biggest changes to the budget are service of other departments where there is a $25,000 reduction. looks like that is almost wiebed out. it was $28,000 to begin with and we will have $3,000 left. $15,000 from lafco staff and legal and consultant services. that's the next big ticket item and proportion to the largest allocation we have for this fund. everything else seems shaved off. do you see any challenges in place while the 44,000 that is being removed from our budget? >> as long as we stay fiscally prudent, no. one thing i should mention some of the numbers are shaved down because they're not to exceed rates and talking with the clerk's office i asked what have we spent in the categories over the last years and all of the numbers -- even if we

continue to spend at current pattern with inflation we would stay within that amount. at one time we brought for other stuff and now it's brought in house to the clerk's office and we don't pay others but just the clerk's office and wrapped into the services we pay them so that's why that number dropped dramatically and we haven't come close to that amount in the last years. >> i am concerned about the reserve of other lafcos around the state if you could do work and understand what the reserves typically are or a range from. that would be good to see. also this budget if we were to approve a budget of this size we basically and we fund cca work but we don't have other work that will be budgeted or this budget would allow us to do other non cca related work

including research or researching other issues, possible municipal w fior banking. could you respond to that. >> yeah. if you take the assumption we will continue with the pattern of returning the money we would have 300,000 less in the act so we spend 100,000 to 125,000 and make it easy and make it 150 that would leave 150,000 in the reserves for other projects and things in the course of the year but that spends down the reserve if we spend the entire 150 but we have room to do side projects as needed if requested by this commission to do so. >> great. thank you. and so are you recommending any particular action? >> well, you need to approve

the budget and the question that comes in and discussion at the last meeting and i yield to the commissioners themselves to determine if we give back the money, or one of the things we could do is we're reserving our right and instead of giving back all 300 only give x amount and keep some in the account and i yield depending what is going on you could do that or return the entire amount. you all serve on the budget committee so you know what is looks like for the upcoming year. >> okay. why don't we open this up for public comment. anyone for the public like to comment please do so. seeing none we will close public comment. typically we give back the funds? >> that is correct and we have enough money in the reserve act for an -- account for an

entire's year budget at this point so we could do that for a year or if you want to figure out -- >> i am fine to do that for one more year. i think i want to look at the budget process if we want to reverse that in june but more time would be -- that's my suggestion. okay. i am seeing ascent from commissioner mar. do we need to make a motion on that? >> yes, you need to make a motion to approve and accept the staff's recommendation if you give the money back. >> i move that we accept the recommendations. >> second by commissioner breed and i will third that and without objection. [gavel] okay. the next item please. >> item five executive director's report. >> do you have something else to say? >> one last thing. our public seats have been up for reappointment now for a couple

months. the current members are in those seats until we reappoint the seats. we have at least two applications in for the seats so we will hopefully move it forward at next meeting so if you know anyone else that wants to apply i encourage them to get the application in a week before the meeting so we can review them and i will get them to you to review them long before the meeting occurs. >> okay. we will open up item five the executive director's report for public comment and seeing no member of the public come forward and we will close public comment and we will go to the next item. >> item six public comment. >> we have public comment open on any matter related to lafco and seeing no member of the public come forward we will close public comment and our next item.

>> item seven future agenda items. >> colleagues any comments or questions on future agenda items? and we will have public comment on future agenda items. public comment is now open and we will close public comment for lack of a commenter. [gavel] and we will go on to the next item. >> item eight adjournment. >> colleagues we are adjourned

[gavel] good morning, everyone welcome to the san francisco supervisors budget and finance committee, i am mark farrell, i will chairing this meeting, and want to thank sfgtv for taping this meeting. clerk, any announcements? >> yes, chair, please silence all phones and submit documents to be submitted to the clerk, as today will appear on the may 33 meeting. >> call item 1. >> item 1, proposed budget and appropriation ordinance for selected departments as of may 1, 2014, fiscal year-ending june 30, 2015 to june 30, 2016.

item 2, proposed annual salary ordinance for selected departments for year-ending june 30, 2015 and june 30, 2016. >> item 3, hearing for mayor's proposed budget for selected departments, for fiscal year 2014-2015, and 2015-2016. >> thank you very much, we have a continuing number of city departments coming before us, three departments, child support services, retirement system and municipal transportation agency, with that we will start with child support services.

>> good morning chair farrell and members of the committee, i am carol roy, head of child services, i would like to thank you for rin vieting the department to present before you today. in the interest of time, i will keep my remarks brief. the presentation i will provide today will be a high-level review of the department mission, and case load, and fund structure and existing funding

challenges and solutions to those challenges. and i will complete today with a quick look at our service delivery strategy. the child support program understands that sometimes parents need help in meeting their obligation to provide economic support for their children. many parents responsible to pay child support are themselves struggling with poverty, lack of permanent housing, face long-term unemployment and significant barriers to gainful employment. in response the department has changed their skrukture from punitive to family centered. helping parents meeting their economic commitment to their children, leads to stronger family ties and cooperative parenting. based on district

representation, our clients are predominantly african-american, latino with a number of asian and caucasian families. many receiving public assistance, but personality to note that our services are available to all parents that need them, regardless of income. low-income families that timed out of public assistance, rely heavy on child support as a safety net. child support is 40% of a family's income. for deeply poor mothers that receive it, child support is 60% of the family's income. in 2014 we collected and distributed $26.6 million, and of that 95% of every dollar collected, $25.4 million went

directly to families and through those families into san francisco economy for basic needs. provided by federal and say the and local governments and recoups welfare cares. 100% is from federal and state resources, the county does have cover this cost and with the expenditures in 2014-15 is to live within revenue streams. the most significant budget challenge facing the department s. rests with the growing cost of doing business today and tomorrow with funding that is less than the department received 11 years. the program stresses on this budget are growing costs of salaries, business and office space. funding for fiscal year 2015 is

reduced by 2.6 percent for phase 1 of a department labor grant, and one-time funding for it-service replacement. the department has absorbed the short fall without interactions and direct services. in 2016 the department anticipates a minimal increase of 1.8% in federal funding that represents an increase of matching federal funds and completion of the demonstration grant. over the last decade our case load has steadily dropped from approximately 28,000 cases and 158 budgeted positions in 2004, to maintaining positions that

represent salary savings but can be filled should the case load grow. there is are no new positions in this budget and the department does not have an overtime budget. the funding sources are threefold, to provide excellent in-house service to the staff and controlling impact of the operational budget. direct services now represents 93% of this budget. second, the department began working with the department of real estate a few year prior to the end of our lease to leverage the opportunity to renegotiate new terms and prepare increases in the budget. led to competitive rates and slower lease costs over time

that translates into long-term lease savings. and we floon share our office space and savings with other city departments. finally the department has right-sized overhead and keeping costs in line with a small are workforce and reallocating savings to fund increases in salary cost. going forward we will continue to engage our employees to look for ways to deliver quality case management is both efficient and keeps pace with the needs of our clients. the department will carefully manage its staffing levels and reduce spending on non-salary costs. we will continue to settle worker injury cases when possible and remain committed to reduce the number of new cases through prevention strategies that include ergonomic training, evaluations and work-station

assessments. the department will also focus on cultivating alternative grant opportunities that utilize existing services, build resources and promises a 66% federal match on every dollar invested. these solutions are thoughtful, viable and ensure that the department will live within its baseline, ongoing reductions are seamless to clients, and that service delivery continues to exceed state-wide performance. the department has a workforce that is culturally competent. case workers appreciate and respect cultural differences and take them into consideration in order to effectively provide excellent customer service to parents in a reliable manner. the department has prioritized language access understanding that absent effective

communication and cultural inequity service delivery is very possible. we regularly analyze and criticize our systems in relation to client feedback and concerns, to ensure that systematic barriers to access do not occur. roughly 2,000 noncustodian parents are delinquent in their payments. 85% of these parents have a relationship with the criminal justice system. the department is committed to do more to assist all parents in their effort to overcome barriers and to successfully compete in jobs. we understand that this requires a concerted effort and child support must be a part of that effort. we can and must do three things,

continue to grow partnerships with other service providers, continue to grow and enhance case management to barriers that reflect our client demographics, and continue to develop realistic orders that are reliable and make sense for both parents. we have created initiatives to confront the challenges these parents face. in my experience a good budget offers practical solutions to the problem of its time. and practical solutions work. we have made meaningful progress, we have proven to our colleagues, our child support colleagues in other counties and other states, that fresh thinking leads to strong performance. of the 58 california counties in san francisco, san francisco is ranked fourth in statewide

collections. and although the majority of our parents on our case load have a low income and struggling, parents are stepping up for their children. 74% of families with children are receiving child support. the san francisco department of child support services managing both with conviction and optimism. we continue to build a stronger and more valuable program for all san francisco residents. for all san francisco families. by leveraging our partnerships with relevant city agencies and community-based organizations, strengthening outreach to our neighbors and inreach to our national program to build deep client connections, and through holistic case management we deliver relevant services through innovation and promote familiar relationships.

i would like to take this opportunity to thank the men and women who continue to make child support services in san francisco their career, and service to the public their passion. i would like also to thank the mayor's budget office and the controller's office, particularly marisa and teresa cal and teresa sandler. to help the department connect to county policies. and on behalf of the 11,699 children we support, thank you for your time and attention. that concludes my presentation, and i would be happy to answer any questions. >> thank you very much for your presentation, colleagues do we have questions at this point in time? comments. okay, we don't have a budget analyst report. as you know. thank you for being here, we

will hear all three department budgets and then take public comment thank you very much. >> thank you very much. >> up next i believe i saw jay hulet here from our retirement system. we will get started. >> good morning, members of the committee. we will have copies for the staff, they are being made right now. hopefully you have a hard copy of my presentation. i am the executive director of the san francisco employee retirement system. our mission is dedicating to securing the trust assets and managing the programs and providing promise benefits. the next page shows the number

of current plans, for active employees, it's 14. most of you are aware that over the last three to four years there is a lot of pension reform to the voters. of the city and county of san francisco, that resulted in nine additional benefit plans that we administer. we have still some folks that are actively employed that were hired prior to 1976, they are covered by a separate benefit plan, those hired after '76 but before 2010, the first phase of the pension reform. they are covered by separate plans and have a one-year comp used in calculations. those hired after june, 2010, most of you participated in changing that plan to a two-year comp plan. and those folks hired after

january 7, 2012, are covered by a three-year final comp plan. these changes were designed to provide fair benefits but obviously lower the level of benefits that are available to retirees once they retire. our total membership exceeded 60,000 for the first time this year. we have under 35,000 active non-retired employees. some of those will include folks that have vested and left their money on account with the plan. they may not be working for the city but have rights to come back and claim benefits. and we have 26,000 retired members and we have a retiree payroll of over $1 billion. the next page is trends over the last five years.

again we have a total active membership broke out by active and vested and reciprocal members. active members over a five-year period are still in a decrease from the level of active employees we had as members in 2008-09. and you can see the effects of the streamlining of the positions. going through and coming out of that difficult period. we also show the active to retiree ratio and you see that it's steadily declining but not as quickly over the last three years in the prior two years of this five-year snapshot. and you will notice that retired members increase by over 16% over the same five-year period. and that we continue to have a net increase, we measure

obviously some retirees will end up eventually dying. but we still have a net increase of nearly 1,000 a year of retirees going into payment status. the next page tracks the funding levels over the last five years. you notice in 2008-09, we had market values assets just under $12 billion. and that was the end of the difficult financial markets in 2007-09. >> mr. chair, excuse me, as i benefit of the public, these slides should also be on the projector. >>