site. the lease at pier 48 should end at the end of 2015. we've been looking for really more than a year for another premiere warehouse site. we have not been able to locate a warehouse location in san francisco. the concern is we won't be able to find a location in san francisco and have to go out of county to house and stage the warehouse operations. another large program for the department is incorporating filipino, one of the languages we provide services. and for 14-15 we intend to have most materials on our website incorporated with filipino. and then in 15-16 to actually bring filipino onto the ballots and into the voter guide. then as far as permanent

position changes, we'll add [speaker not understood]. that would be to assist the department in incorporating filipino language services. and then also we're going to remove two 14 71 worker election positionses and move those into a 10 92 it position. 15-16 we have no new positions sloted. finally, we agree with the budget analyst recommendations. we appreciate the work as well as the mayor's office [speaker not understood]. >> thank you very much, mr. arnst. colleagues, any questions? mr. rose, can we move to your report? >> yes, on page 69 we recommend reductions total 6 68, 0 71 in 14, 15. [speaker not understood] in recommended reductions. 255,5 61 of the ongoing savings

and 412 00 5 [speaker not understood] these recommendation still result in ~ [speaker not understood] to the city's general fund in 14-15. we are also recommending a budget and finance committee reserve for the actual cost to release the warehouse space in 14-15. this recommendation is consistent with the recommendation made in the previously approved by the budget and finance committee in june 2013. our recommended reductionses to the proposed budget total $275,084 in 15-16. all of it is ongoing saving. this would allow an increase of [speaker not understood] in the 15-16 budget. these recommendations would result in [speaker not understood] savings to the city's general fund in 15-16. as i understand the department does concur with our recommended reductions shown on pages 70 and 71 of our report. >> okay, thank you very much,

mr. rose. mr. arnst, confirm you're in agreement with those? >> yes. >> colleagues, any questions for our budget analyst or at this point for mr. arnst? okay, much appreciated it. thanks for being here. >> thank you. >> i'm not sure the assessor-recorder came here so, you can come up here. ms. chu, come up. i should say former supervisor chu. >> thank you. good morning. we're just going to set up the audiovisual -- visual, i should say.

a little of technical difficulties. we'll do the overhead instead. thank you very much to the budget and finance committee for having me here today. i did want to spend just a quick minute before i begin with the presentation to introduce my team to you. i'm joined today by douglas legg who is my deputy director overseeing operations in my organization. i am also joined today by deputy director gigi whitly who oversees administrative functions in my organization. so, we have a very brief thorough presentation for you. the first slide we want to go through is talking about our essential functions in the organization. i think we have been before you before to talk all our general duties. but for the most part we think it is just important to continue to share this information as we go out with members of the public and share the course of our work. we, as you know, are

responsible for valuing all the taxable property in san francisco, conducting fair [speaker not understood] assessments and also maintaining the public records. we also, as you are very, very familiar, are responsible for collecting the real estate real property transfer taxes when they are due. it is important to note that we take our job very seriously because we understand just how important it is to ensure our office functions well for the financial health of the city. we bring in about 40%, almost 40% of the city's revenues when it comes to the general fund, 1.2 billion of that comes from property taxes from real estate as well as the property that is owned by businesses. on top of that, about $235 million comes in from transfer tax anticipated from the upcoming year. what we wanted to talk to you a bit about was to share with you some of our vision for the next two years. we have been doing a lot of thinking about our organization and figuring out how it is that we might be able to move our organization forward to the good of the city.

so, our priorities focus on a few areas. first we want to make sure that we analyze and consistently produce high assessments. we have to work with our assessment caseload that is consistently [speaker not understood] in the assessment appeals role, but also now in the new construction world. we want to make sure our assessments are done in a timely manner ~ to the extent that we have assessments that are waiting to be done, we have money that is sitting out there not yet collected. so, we want to make sure to have timely enrollment so we can maximize city revenues. we want to make sure that we replace our [speaker not understood] it systems. [speaker not understood] as you go and look at our system it looks like a new system. it is the underlying old green systems where you have to push function 1, function 2 to move from shot to shot. that is something we have contend with in terms of our operations. finally, we want to strengthen

our organization to improve customer service and mitigate risk for our organization. you asked us for a very high level summary associated with the changes in the budget. so, here is a very, very high level form is a change, you can see the changes from our budget. so, compared from year to year we are seeing in the first upcoming year, fiscal 2.5 million increase. year 2 is 6.2 million. representing fte change [speaker not understood], two in the first. just to speak briefly about that what is embedded in the $2.5 million increase is two components. one is we had an assessment appeals team that as you are aware has been funded by the board of supervisors to deal with our consistently high level of assessment appeals. in the first year, the current year, we had the amount of money in the budget. year two which is the upcoming budget year, it is anticipated that revenue is thev going to be in place. given we still have a high

level of assessment appeals, about one point, half of the 2.5 comes from just continuing the assessment appeals team. the other component is really a work order from the department of building inspections to deal with the high-level of new construction appeals that we're seeing -- not appeals, sorry, assessments in our work load. when we spoke about the priorities the slide before, you should imagine, then, that our investments in our budget would be reflective of how it is that we intend to carry out those priorities. so, a few things we want to touch upon that we'll go into further detail about. one is the budget that you see before you in year one will have an expansion of a new construction assessment team first and foremost. number two, it will also have an investment that begins to take a look at how it is that we might go about replacing our it system. number three, it has also investments in helping us to sure up our analytical capacities and also our administrative functions.

so, on new construction for a moment, you see before you a chart that really depicts sort of a work load in terms of new construction. i think many of you take a look at the world around us. we see a lot of construction activity happening all across the city, whether it's [speaker not understood] in the street, the traffic congestion borne by all the construction activity. there is also a downwind effect in our office. every time there is new construction activity that takes place, we have to value those assessments and every time there is new construction activity that also mean additional tax revenue that comes on the role for our city and county. every year we have about 25,000, if not more, department of building inspection permits that get filed. our office is responsible for reviewing every one of those permits to make sure that we capture every single one of them that may be assessable. we expect that by the end of this current fiscal year we're going to have more than 9,000 new construction assessments that have yet to be valued and,

so, this is a very significant area for us to make an investment. so, what you will see in the upcoming year's budget is there is a two-year level information worth about $2.6 million to maintain, expand our new construction team, to ensure that we are capturing the revenues that are coming forward from all the new construction activity happening in san francisco. so, just something that you should, should be aware of. in the upcoming year, for example, we had at our office work down a lot of new construction assessments. we probably finished about 5,400 assessments. the number of new cases that came in was 9,300. even if we carried on with our existing employees and continued our work load as is, we would continue to fall behind year after year without an investment. so, taking a look at some of the budget investments, this is one air why we thought made a lot of sense. it not only will help us keep up to date with the cases that we have, but also help to bring in revenue for the city which we know is an important

function of our office. the [speaker not understood] investment we want to speak about is our infrastructure for our information technology systems. as i mentioned earlier, we have a system, a computer system, based off of cobalt programming language. it is no longer taught in schools and is no longer going to be maintained going into the future. so, this is not only just an issue of efficiency in terms of being able to have a better more efficient work product and system to help us do our work, but also will become an area where we're going to have to start mitigating the risk. so, rather than kicking the can down the road we want to start taking a look at this problem and to address it. so n this coming year's budget what you will see is a $400,000 investment to begin that work, to take a look at what systems are available, to also work not only with our office, but also with the tax collector's office, as well as the controller's office as they begin to take a look at their

financial system to say how sd that we might be able to procure a system that makes sense that speaks across all our different organizations. in our current property tax system, if you can believe it, not only is it an outdated database platform, but it is incompatible with our other systems. it lacks a lot of good reporting that you would imagine you would want for an operations. it also does president really speak veriual to the controller's system nor to the tax collector's system. ~ very well [speaker not understood]. so, as we look forward, we look forward to working not only with the controller, but the tax collector and saying if we are going to go forward with buying a new property tax system let's find one that makes sense for all of our organizations. let's make sure that one is seamless going forward. and, so, the budget, as i mentioned, has $400,000 to begin the assessment, the analysis of a system, to hire project manager to begin down that process. phase 2 will be the place where we will start to actually take a look at hiring, but that's

not until year two, we expect. the third area of investment is around business profit improvements. so, i think as i come into the organization, one of the things that i value very much is take a look at the data we have before us and really using that to understand how we can make our operations better. not only for our organization, but how it is that we work with other departments. we want to make sure they have the resources to do that. so, you will see in our budget this year investment in analytical capacities and resources. there is also an investment in our finance and it divisions for our organization to be able to mitigate some of the financial risks that we see as well as to expand some of the data reporting that we have. we have also done a few things i think are really wonderful that we're going to continue to invest in which include doing enhancements such as e-phone and e-recording. in the past if you're a title company bringing in a deed, you

have to bring in a physical piece of paper, we would manually stick a piece of paper on that label, we would scan that paper. then after we fix it and the nature is -- everything okay we would mail it back to you. we would allow [speaker not understood], mitigates any lost documents, remove inefficiencies associated with that process. we also have begun aloe filing for our business. if you are a small business no longer do you have to fill out a piece of paper, drop it in the mail hope it doesn't get lost along the way ~. you can file your information directly online. so, we look forward to continuing some of these investments that really will help improve the customer experience as well as digitize our records as well as you and the board are interested in doing. finally, we want to speak about the assessment appeals team. so, we haven't really -- it wasn't one of the points that was mentioned because it's not necessarily a new investment, but it is something that we

think is important to continue investing in. taking a look at the chart there, you see we have historically seen before 2008 a very steady level of appeals that were filed. we had a range of about 1500 appeals that were filed prior to 2008. after 2008 it skyrocketed to a peak of about 6,400 appeals that were filed in any given year. you would expect, especially in the upcoming market, you hear a lot in the marketplace about how prices are going through the roof, how market prices are coming back up for residential property, commercial properties. you would expect that the natural course of action would be that appeals would drop off. we haven't yet see that. we're crossing our fingers hoping we won't see that. in fiscal year 12-13, last year, we had about 5,500 appeals filed, still much higher than our historical level of 1500. this past year, now that the market is improving, you would

have expected that would have dropped off significantly. it still has not. we had about 4,98 1 appeals that were filed last year. so, we're not seeing yet any associated with the assessment appeals ~. so, what you see reflected in the budget is a continued investment in the budget in the assessment appeals team to make sure we are protecting those values. just to give you a sense of it, the existing open appeals we have, 6800 that we will have at the end of the year would be worth approximately $388 million worth of property tax revenue at risk. so, it is extremely important that we continue to invest in this area to defend that property tax valuation at your assessment appeals team. i think one of the things that is most worrisome for us in our organization is taking a look at the work load. so, as we spoke about, we want to make the improvements in customer service. we want to make sure we bring in the revenue for a steady financial picture for the city. but what we're beginning to see is our assessment appeals work load has not dropped off and we

just don't know if this is going to be the new norm. so, we will be taking a look at it over time to make an assessment about that picture. we're seeing changes in ownership are continuing to happen at a steady pace. however, in the new construction world we are seeing the new construction outpace our ability to keep up with new assessments. for our organization and our team we're going to be looking closely at the next year what that level of investment needs to be in terms of staffing to make sure we are weeping on top of it. this is good not only for the taxpayer to resolve the assessment issues, but it's also important in terms of bringing revenue into the city. so, then, i will close with our summary. so, again, we talked about the, again, the trends in our current work load. we are going to be taking a look at how things move forward, the high volume assessment appeals will be a consistent issue for us and of course our need to replace our critical it system is something that is going to be a major focus. so, there is absolutely nothing shocking about our presentation. it's all about the bare budget and the bare operations whatv

we do and making sure that we're doing what we are charged to do in a way that is the most efficient. i know that the budget analyst will be going through our recommendations -- his recommendations fairly soon. we are not yet in agreement with mr. rose, but we look forward to working with his office over the next week to make sure that we do our best to come to agreement before next week. so, in advance, i want to thank mr. rose, of course the mayor's budget office and the controller for your help and thanks to the budget committee for hearing our presentation. any questions? >> thank you, assessor-recorder chu. colleagues, any questions at this time? okay. mr. rose, can we go to your report, please, it snit >> yes, mr. chairman, members of the committee. on page 63 of our report i recommended reductions to the proposed budget total 225,0 77 dollars in fiscal year 1415. of that amount $225,0 77 [speaker not understood]. an increase of 2 million 2 62,5

88 dollars or 10.5% in the department's fiscal year 14-15 budget. our recommended reductions to the proposed budget total 190,152 in 15-16. all of those recommended reductions ongoing savings. as the assessor has stated we are still working with her and the department and we will report back to you next week. >> okay, thank you, mr. rose. colleagues, any questions at this time either for mr. rose or for our assessor-recorder's office? okay, we'll see you next week. thank you very much. okay. up next we go i believe to [speaker not understood]. ethics commission is up. so, why don't we go there next. >> good afternoon, mr. chairman, supervisors. john st. croix representing the

ethics commission. just very brief, the proposed budget is 182,000, almost 183,000, less than our request. the functional effect of this is that i will maintain a vacancy in our investigation and enforcement division. for next year i would just point out that almost all of the increase anticipated in the budget will be a deposit to the election campaign fund in anticipation of the mayor's race. and we do not have any new departmental initiatives or anticipated overtime costs. the budget analyst has no recommendations for us this year and we agree with those recommendations. [laughter] >> surprise, surprise. >> and i'll answer any questions you might have. >> okay. colleagues, any questions for the ethics commission? okay, thanks very much for being here.

>> so, we don't need to [speaker not understood]. >> okay. up next, board of appeals, we have board of appeals here. okay. >> good morning, members of the committee. i'm cynthia goldstein, executive director of the board of appeals. and what i'd like to do is very briefly give you an update on the board's activities this current year and then walk you through the budget proposals for the next two years. as you know, the board is the last stop in the

decision-making process for a wide range of decisions on appeals made from determinations of other city departments and this first graph shows you the appeal history for the board, the numbers of appeals filed with the board over the last ten years, [speaker not understood] for the current year. you can see during the economic decline which had a significant drop in appeal volume. but the last year we're seeing a good increase. this year is the first year we are back to average numbers. this year is the appeal distribution. you can see where the appeals come from, different departments. as has been true in the past, a majority of the board's cases are land use related, coming from the departments of building inspection and planning, zoning administrator. you can see this year we did have a spike in appeals coming from the department of public works as well. that represents 42% of the board's cases for this year and actually 68% of those cases

were related to appeals filed by or against at&t, coming out of their [speaker not understood] facility roll out. this shows you appeal distribution over the last five years and you can see, again, that we are heavily related in the land use area, but the other types of appeals tend to spike and drop depending on legislative roll outs. we had a spike in dpw cases in year 12 because of the [speaker not understood] coming online. [speaker not understood] that was related to an increase in [speaker not understood] sale of tobacco to minors. we had an appeal to that permit. going to our budget now, our budget come -- our revenue budget is generated by two sources. our charges represent 95% of our budget. those are collected on new and renewed permit applications. the controller has the authority to adjust that -- those surcharge rates, depending on -- up to the rate

of inflation, but any adjustment beyond cpi requires legislation. we are not coming to you this year for an adjustment to the surcharges. we expect that the surcharges will generate sufficient revenue for the next two budget years. and then the remainder of our budget comes from [speaker not understood] paid by individuals who come to the board office and they file an appeal. we have minor increases proposed for the next two budget years. all of them are related to mandatory personnel expenses associated with the labor agreement. [speaker not understood] for the first fiscal year and 1.1% for the next year. as i say, we do project there will be a sufficient rise in surcharge revenue to cover these increased expenditures. this rise is based on unanticipated permit applications. if there is any year-end shortfall, however, we do have a reserve fund that you all set up for the board last year and there is sufficient funds in that that would cover any shortfall that we might

experience. we are not proposing any changes to our current staffing levels. we do have -- expect to have sufficient staff to cover an increase in activity, but we do have one technical adjustment that is being proposed. there was a general fund allocation in the budget as proposed by the mayor, but we think that the surcharge revenue will be sufficient to roll out in that general fund allocation. the rest of the slides realery to give smug detail if you would like, the budget rolled out to large service areas and the organizational chart as well as the surcharge rates and the filing fee rate. and that is my presentation. if you have any questions, i would be happy to answer them. >> thank you, ms. goldstein. and there's no budget analyst report on this one? >> there is not. >> so, thank you so much for the presentation. the next department is the rent board. [speaker not understood].

>> i'm not sure we made things easier by showing off. >> thank you for the handout and thank you for being here. >> my pleasure. ~ ms. lowell. >> my pleasure. my apologies.

[speaker not understood] the executive director. this is my deputy robert collins. and in a second we're going to have a slide to show you the mission of the rent board. i always come before you saying that my goal is to be the least of your problems, but not this year. i think [speaker not understood] we're experiencing a bit of an affordability crisis in san francisco. the mission of the rent board -- we can just follow along, if you don't mind. the mission of the rent board is basically to protect tenants from excessive rent increases while ensuring landlords fair and adequate rents for trying.

in order to do that, our two basic services are public information and counseling and administrative hearings. and at the moment we have a 2 to 3 month backlog for priority cases for hearing and a 5 to six-month backlog for all other cases. i don't want to tell you that this is acceptable. this is completely unacceptable. in order to address this backlog we have received the support of the mayor's office and dhr to staff up one additional position in each of those two key areas. one additional counselor and one a ~ additional law judge has come on [speaker not understood]. we are going to be asking with your consent to ambitious -- >> can you repeat what those backlogs are or how severe they are. >> at the moment it is taking us two to three months to schedule a priority case.

a priority case is where there is an excessive rent increase while the tenant could be displaced waiting for the decision of the administrative law judge. more run of the mill cases are taking 5 to 6 months. i don't like to get up before you and saying we're not providing good service. so, in order to address that situation we have got two temp employee positions and we're asking to make those permanent. two years ago when we were before this committee, our current assessor -- then supervisor chu who was the head of this committee, and she did kind of a mini audit of the rent board because i think we were in a recession and the idea was perhaps we could do more with less and actually at the end of that mini audit then supervisor chu said, you know, i'm concerned that you're going to get into a backlog situation and i want you to come before us. if that happens. and, supervisor mar, you told us the same thing last year. well, we're here. it's happened.

i will show you on the next chart, which is the work load statistics, if we can get there, robert, exactly what this backlog looks like. our total -- [speaker not understood] is the two-year total. our petitions, total petitions have gone up 26% in the last two years. now, some categories have gone down. for example, tenant petitions two years ago went down 4%. but guess what? this year it went up 24% so we have a 20% increase in tenant petitions orbv the last two years. our other major category of work is landlord petitions, of course ~ and the good news is those went down 1% this year, however, they went up 37% last year. so, we have a net increase of 36% in landlord petitions as well. the next category is ellis and we're not going to talk about ellis. we all know way too much about ellis these da