deficit we we don't necessarily have a revenue problem as you can see they are growing at a strong pace but expenditures are growing even faster and that's a challenge in balancing the budget and some of the driving factors including salary and benefits of recently negotiated labor agreements, you know, in november there were a number of ballot measures that increased baselines in reserves and a number of city-wide operating costs including capital as well as equipment and some of the other assumptions includes departmental costs like the opening of the new public safety building and the new general hospital as well as public safety hiring plan. >> so charter mandates in the in the 5-year plan we also have to present fiscal strategies to balance the projected deficit so this chart is showing you or

attempting to show you -- i'm sorry it's such small font but we're taking a balanced approach growing at a slower rate so curbing growth and also increasing revenues doing it from both ends to present a balanced budget. expenditures over the the 5-year period are expected to average about 23 percent over the over the 5 years so our 5-year financial plan proposes a reduction to to about 18 18 percent slower growth in cpi and if you want to nitty-gritty details you are more than welcome to dive in on the city's website and increasing revenues to 18 percent to present a balanced budget. as i mentioned earlier this is the first time the the

5-year plan we're presenting a recession scenario and again it's small i apologize but what is your seeing here is the average length between downturns since 1900. and so the black dotted line that's vertical down the middle represents the average and so the average length of time between recessions has been about 46 months as represented by that dotted line and as you will see the top bar from july 2009 to to october 2014 represents our current economic expansion and as of now that's about 64 months of economic expansion and the bar to the right of that represents if we were to continue to continue without a downturn through the term of the of the 5-year plan, that would be un precedented 132 months of economic expansion without a downturn that would be the first time in 115 years that we would have an expansion that

long. so a downturn at some point over the next 5 years could be very likely and as part of as part of as part of the financial planning we wanted to look at planning mechanisms and ways that we could help plan for a possible downturn. and so this chart is representing what we might expect to see just doing modelling of what a drop in revenue might look like in a recession scenario so we took the average decline in revenue and increase in pension contributions that occur have you that occur as a result of a downturn and averaged the most recent recession as well as the.com the dot com bust and we'd begin to feel the effects in fiscal year 17-18 and for those 3 years 18 through 20

we'd have a 936 $936 million reduction in revenues. it would also represent a projected increase in the projected deficits at the bottom of that that chart there. so it's a potential change to fiscal solutions in light of a recession that we proposed and the the 5-year plan will be much more reliant on reserves to balance the budget and revenue obviously will be a smaller part of the balancing plan there there will be significant potential reductions in one time spending like capital equipment and it as opposed to continued increase in the growth in funding those. >> this is just a refresher. this is just thinking about the budget cycle coming up now and the budget instructions we gave

to departments in december and reminding you for fiscal year 15-16 this is for 15 through 17 for the the 2-year budging and we're projecting a 15.9 a $15.9 million shortfall. so with that, that is informing the budget instructions that we gave to the general fund department so a lot of general fund departments were very excited to see in fiscal year 16 departments were not requested to to make cuts to their revenues and in year 17 we've proposed ongoing reductions in revenues equal to to 1 percent of the adjusted support of the departments.

and next should be a timeline of the budget process. we gave instructions in december departments you will see on on february 23rd submitted there proposed budgets. i would like to say it's the beginning of a conversation that goes on for a number of months between departments and the mayor's office and plenty of opportunities for public input and hearings and things that happen at the board and our office proposes a balanced budget in june and in july the budget is considered by the board of supervisors with that i'll answer any questions about the presentation if you have them. >> thank you kelly. you know, before today we had heard you have done about 15 to 20 of these presentations to different commissions and the board of supervisors and it really shows. >> this is my first one. >> your first? it was

phenomenonal. >> thank you. >> colleagues? >> commissioner wald. >> it was a terrific presentation thank you so much for coming here and like our president i would not have guessed it was your first one but i do have a question. >> yes. >> the instructions that you referred to. >> uh-huh. >> for the general fund departments. >> uh-huh. >> the department of the environment is not a general fund department and did the mayor give any special instructions for such departments? >> there aren't any reduction targets like general departments they are expected to present a balanced budget. there are general kind of themes to the budget that the mayor kind of emphasized and i have those -- one second. kind of prioritizing you know fiscal sustainability in government efficiency and prioritizing government response as

government responsiveness to citizens and shared prosperity are important and also understanding and knowing population growth as our city is expanding. >> thank you. >> uh-huh. >> and, you know, kelly you would be happy to know that we sat down with our director and the operations committee to look at the budget for the department with our chair of the committee commissioner king here found ourselves reading through the shared prosperity agenda and really took cues and talking about sustainability and solutions to climate change and benefits diverse communities and solar and electric vehicles for

everyone and neighborhoods and businesses. we thought about that a that a lot and i think there are exciting ideas. i think the mayor said to get to zero waste we're going to have to have broader participation from diverse communities so how we support families at the department and the mayor's priorities as you mentioned and also make sure to address components on how we operate and i think we we got some exciting ideas we're really excited about it when it comes to zero waste and he's been really passionate about and we know the financial picture and you have given it to us in a very stark and clear sense but we definitely look forward to i think for us we'd love to become a general fund department again like 10 years ago and we're confident about

director raphael and jennifer and folks if if you haven't met already you will hopefully get to know and they are great we have put a lot of faith in them to to help deliver the values and we see the mayor care about. >> i look forward to working with your staff on those ideas. >> commissioner king. >> i'd like to echo the president's statement. part of our goal here is the equitable.

>> we're the city that's going to teach other cities. if we are all going to live in one place and it seems like this is the trend to do we have to do it sustainably we have to do it this way. so if that's the case, we'll be the first to show you how to do it and then you can copy and that's worth investing in and that's a value that that you can tell the rest of san francisco is worth general fund money for. >> uh-huh. >> thank you commissioner. >> colleagues? director raphael before we go to public comment, any thoughts? >> kelly, thank you and i appreciate the fact ended and read to us the

instructions that we did get from the mayor because it was a test. >> where i said all right. this is a great time we're it $15.9 million is a a little bit that staggering the lowest in 15 years yeah. we're in a healthy position there i think the thing this impressed me that means you have to as department heads differ ever more value for other buck that you need to show people how with consistent resources that are not being cut you'll do a better job of being responsive the mayor was pack at when he gave the speak to the department helped those 3 areas to keep in

mind the fiscal stunt number one the increase in responsiveness and number 2 the shared prosperity number 3 the 3 things the mayor specifically said to us that are weathered to our budget and weathered onto the discussion we have with kelly and her boss kate howard about the general fund we took our comments and suggestions to heart and had a very hearty discussion we'll end on that not kelly was many the room she heard our discussion and i appreciate your vicinities of support too. >> very much so i'm sure you're aware of kate is amazing the city is in good hands with kate as the mowers before you get

director public comments on the presentation all right. seeing none no speakers public comment is closed. any final comments clirgs all right. thank you thank you, kelly. >> next item is review and approval the department viable for the 2015-2016 that explanatory documents for the 2015-2016 sponsors are deborah reaping yell and accident project sponsor and finance administration this is a discussion and action item. >> oh, joe. >> good evening. i'm joe. >> before you starting i'm going to do a couple of introduceries the way we are going to industry this as 4 of the 5 you sat through a detailed discussion with the operations committee we'll go a at high-level about the budget because you've seen it we want

the public to hear the discussion when joe is done i'll add comments about public comments as well as discussion an general fund if that's okay. we do that first perhaps you can answer clarifying comments let me do that first. >> okay. >> monica if i could get the overhead see how this thing works. >> okay. >> yeah. as director raphael said this is essentially exactly the same document in the operation committee it is one small change we've made to reflect the cost for wore employee i'll mentioned it the numbers have not changed effectively we've got the same document as the operation committee a so you'll you know

go through this pretty quickly and obviously take the questions at the end so our 2015-2016 proposed budget and again you know the budget submission is on february 23rd the preliminary draft budget that will be changing at that time we submit it we feel good about the budget we have in place with that it certainly will be you know changing and there will be differences between this document and the one we finally submit to the mayor's office on february 23rd so for next n.y. our budget is 234r58gd our variance is 1.33 percent is or it will be increasing as we feel is reasonable

this is an offer lay of the program areas pretty quickly since we've done this recently this is the departments revenue and the department gets revenue mainly from 3 sources the next fiscal year 46 percent of the funding from the k3w0u7bd account and 9 percent from other city departments and 45 of our percent of our budget from grant of various sorts our total budget for sources so approximately $20.46 million for the next fiscal year. >> sorry this doesn't obligating good for right handers first one is the administration the administration for 2015-2016

is very flat and didn't a change at all there's a small decrease in our salaries benefits and overhead that is reflecting of a net decrease of one fte from one fiscal year that will not effect any service for the department we've been consolidating program fixed up and it's weird to do that but officialal flat for the next fiscal year budget is also very flat one big difference in this budget over the current fiscal year a reduction of one hundred thousands of services and other departments and that had you had occasion $100,000 in attorney fund for the upcoming refugee rate hearings we've had budget

for this fiscal year but conducting next fiscal year we'll forward those funds. >> next program area is reduction it is very flat it is really not changed one percent net change you know actually nothing about in it is different from the other one so this budget is remaining flat and our funding for this the only larger change we have a cost interchange for puc where the funding for school ed that was housed here we now hundred dollars in outreach that is a more appropriate location

green building is also very flat has a small reduction in salaries and overhead it reflect green building personnel that will be doing service for the energy program for the next fiscal year other than it's flat for the next fiscal year energy efficiency shows a mieftdz reduction from our bay grant for next fiscal year takes a fairly good size reduction from $1.80 million to $1,000 that variance make up almost entirely been an increase in 9 energy budget for next week next year so we're flat and in

good shape for 80 this program area clean transportation we are showing a big increase 35 net overall and that's a reflection of 3 new grants that the department has received for the next fiscal year for 5 hundred and 61 thousand dollars it is also where you see a large increase in the number one personnel services category those are tied directly to deliverables and grants we've received and environmental justice is showing a reduction in the next fiscal year and that is mainly due to the e j appropriation

that is coming into its final year of funding next fiscal year this is less than what we have for a fiscal year for the appropriation so this is why you're showing the reduction year to year in that program area urban forestry is increasing a significant amount this is one area that's different from the operations committee documents that we had submitted we had placed the entire fte within the urban forest program area and the work that this person that this one individual employee is doing there's a portion of their work that's not urban forest it

is tied to toxic reduction so to be consisted with some of the other employees that are split between two different program areas we and you know we have placed the portion of that person's work not urban forest related to is to the proper funding area that is toxic resurrects you've seeing an increase in the costs excuse me. yeah. kwofts with the urban forest budgeted we've increased our assets to various departments we get funding for the increased year for the 2015-2016 so that's why you're seeing a reflection in the increased costs the urban forest group outreach for fiscal year

2015-2016 is it is showing a reduction of 4 percent this salaries and a and benefits have a reduction because there was an fte that k457b8gd the cost center to reflective of reflect the work that cost center is doing there's a - the 09 interesting thing an increase in the grants of one hundred and one percent that's the towers cycle grant we received in two fiscal years workout because they're continuing the program for the next two fiscal years we were able to capitalize so we have two fiscal years for next fiscal year bio diffident is one area of

current deficit in funding we have a gap $77,000 $795 and you'll notice there is an increase in salaries that reflect the true cost of the position for the current fiscal year we were able to mitigate in order to get the program off the group but the next fiscal year the costs reflect the full salaries benefit direct and indirect we are working on closing that gap but currently that is a surveillance that remains in the budget between now and february 23rd we'll be able to solve this issue late area is the renewables a larger deficit of one hundred and 78 thousand plus that

reflects the position that we felt vacant we very much like to philosopher work in the next fiscal year obviously it did not on finding the fund to make that happy but this is the main gap in the climate renewables and that's really it our budget is refeel and actually real good shape for the next, we have a couple of challenges but happen where we are in the process at this point i'll be happy to answer any questions. >> thank you, joe any clarifying questions do i do my remarks. >> oh, okay. i that we're good director.

>> thank you, joe for that presentation. >> also any first commission. >> all right. >> we'll change you will - >> we have 7 questions. >> let me pump you up a little bit. >> can't make it easy on joe i want to call out one of the things that joe mentioned i want to emphasize and get to general fund i want to emphasize your action item together is to approve a draft that's because the budget is not due as kelly said to the mayor's office middle february 23rd so because of the timing of this commission i don't have the final final that's going to go to the mayor's office there will be back and forth between us and there will be consideration if we get input if anyone else who wants to weigh in on our budget better to be safe than sorry but as a whole you believe the

direction is right and i want to be clear this budget has two deficits we can't submit a budget not balanced by definition we're going to have to make disconnections around climate and bio divest if we're not showing a deficit we're in good shape we've received a letter from nancy a members of the public who raised a number of issues around appropriateness of our expenditures i've looked at it carefully the comments she's made and really appreciated nancy ids attention it's rare we have a members of the public that takes the mind to look at our budget it's a blessing one of the changes that joe talked about was because of a comment she looked at our u6r9

and said why is there im30u7bd money that's to be routine by the planning commission, and may be acted upon by a single roll call vote inappropriate use of the impound money it was actually a 345ek we were trying to simplify things and instead confused them we thought it is best to show you a whole person and all the places they're getting paid from so let me give you a concrete example there's a young man named luke's who works on outreach on impound and that's where he is paid and then combrpg we couldn't show him as a separate entity he's a piece of the program to the u6r9 person is like a part of her salary from other departments and small piece of the toxic budget thank you narnz that