okay. we are done with our three departments for today. we will open this up to public comment. anyone that wishes to publicly comment on items 1, 2 or 3, please come forward. >> i filled out a card, mr. chair. gilbert krizwell. new district 8, where did the surplus go? i remember the last time that mr. riskin was here, they had a surplus. the mayor and mta have turned their backs on people living with disabilities and people with h.i.v. making us wait until after the november election, why wait, do it now. reject the mta budget, freeze them out until seniors and people with disabilities ride

muni for free. until the mta and the mayor care about seniors and people with disabilities. and people living with aids and h.i.v. give us some relief now. this crisis of affordability, this crisis of housing, this crisis of transportation has an effect on everyday citizens. this age crisis, let's talk about the give aways already given away, the google buses, gen-tech buses, sunday freebies, a revenue program for the mta that could pay for the program for seniors and those with disabilities. you want people to vote for your november ballot? why don't you give us a free ride. thank you. >> next speaker.

>> morning, supervisors, thank you for having this meeting. i am a senior in disability action. in regards to the mta budget, i first want to acknowledge the great work with riskin and the commissioners and the board. especially the board of supervisors, yee and mar and co compost, and kim. and because of the work we support the mta budget the way it is, based on all the work that is going on. especially with all the issues that came up. that affect seniors and people with disabilities. vision zero. the free muni. equity. there is a lot work that has been done. but also we support it because of the commitment that the mta

commissioners that have put further to resolve some of these issues that have not been resolved yet. again the same issues i mentioned. we support it and we very looking forward and encouraged to continue this work with mta especially start, the holiday season start when everyone is in a good mood, and work on these issues and we can move forward and provide the type of muni service, mta service we look forward to. >> thank you very much. are there any other members of the public that wish to comment on items 1, 2 and 3. seeing none. public comment is closed. supervisor mar. >> i want to thank mr. riskin and mrs. bose and martinson, for the hard work moving forward so many big items to improve our transportation system, and i

know like others that the november ballot and future ballot s are critical for fundig for our transportation system. i want to applaud you and i know that you are balancing and juggling quite a bit. and i wish you luck in the labor negotiations and i know how that impacts the overall budget as well. and in your slides you said there is 24 different bargain g ing -- bargaining units and my hope is that the employees receive something positive. and i hope that in the zero vision and walk and hope that funding for the other bus rapid systems throughout the city is a key part for the future. and like senior and disability action, as we expand free muni

for younger people. that we have equity in mind to think about lower and moderate income with disabilities and seniors as well. and i know that you are working on that as well. i thank you for presenting the budget. i have concerns like supervisor avalos but i feel that you are working in good faith to keep us informed on the moving pieces as well. thank you. >> thank you to all department heads for coming today. colleagues i suggest, i would like to entertain a motion to continue items 1, 2 and 3 to next week's meeting. just quick. before we do that, just in terms of intentions. i think that child support services, my sense that we are going to be okay with their budget. and i don't think they need to come back next week. we are going to make amendments next week to the retirement

budget, and director hewitt wants to be back. and mta, we will be in touch. whether there are continued questions before we pass it out. but we will continue, and that is part of the items for next week as well, but we will be in touch about that. can i have a motion to continue items 1, 2, 3. >> moved. >> motion and second. madam clerk, call item 4. >> item 4, resolution concurring with the controller's certification that services previously approved can be performed by private contractor for a lower cost than similar work performed by the city and county. >> good morning, mr. chair and members of the finance committee. as we spoke to this item yesterday, there are a number of enterprise departments that have ongoing contracted services and the certification is required by the controller that it is indeed

less costly to provide the services through contracted out services. rather than for civil service, and before you today is citation processing, and towing services, and paratransit services, security and shelter, transit services for the mta. >> okay. thank you very much. and to be clear, we can't pass this out today? >> you can pass it out today, you have the public utilities commission next wednesday, however, this item has been agendaized for today, you pass it out today if you wish. >> we have not agendaized this for next week yet. colleagues any preference? i am comfortable to pass it out today unless we want to hold it over to the other departments. good, we will entertain a motion to do so. first open up to public comment. seeing no one left in the

chamber. anyone else that wants to publicly comment on this item? seeing none, public comment is closed. with that supervisor breed you want to make a motion to move item 4 forward? >> motion. >> second. >> we can take that without objection, madam clerk, any other business in front of us? >> no, mr. chair. >> thank you, we are adjourned. [gavel]

[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. >> asking you to go to the projector, please. >> right. >> again pointing on this column, the market value assets at the end of the financial, what they call the great recession, just under $12 billion. and then increasing to $17 billion which reflected a market value funding status of 84%.

i am happy to report with the markets so far this year, through the end of april, we have exceeded $19 billion in assets. and on target to return over 14.5% return for the current fiscal year. again as long as the financial markets hold through june 30, it seems arbitrary but that is the time that we do a snapshot and measure the health of the plan. so over the four years since the great recession, as it's called, we have increased the market value of this trust approximately 5.1 billion. and at the same time over this same period we paid in excess of 3.5 billi$3.5 billion in benefi. >> can you talk about the difference of actuary value and market value. >> the actuary is what they

determine it will grow, which is currently 7.58%, and each year they will assume over that previous year that it grew at that rate. we used to regularly be when we are better funded have more market value of assets than actuary of assets. the important part is that actuary assumes that we have the actuary value, and when actuary exceeds market value as it did in 2008 and 2009. i am happy to report for fiscal year 2012-13, now the market value of assets is $17