charged the county wide pool rate and will be able to complete repayment by 2016. >> colleagues any questions? mr. rose can we go to your report >> yes, object page 13 of the report we note the requested release of 2, 200 million dollars will pay for part time [inaudible] that is 5.25 fte's and one technical program and one out reach program for program budget of [inaudible] shown in table 1 and that is on page 13 of the report. on page 14, we note that the puc will transfer existing position tooz had cca program of which 4 fte's are [inaudible] power, capital project positions that is off budget and 1.25

are paid from pec operating funds shown on table 2 of the report. the recommendationerize on page 15. we recommend you file 1506491 to place 4 million on reserve until the date the funds are needed for energy pure curement. we also request you release [inaudible] of 2.2 million request on budget and finance reserve and place the remaining balance of [inaudible] pending the filling of vacant positions of the cca program and that is file 150506. wee >> supervisor tang >> i want to ask puc staff their thoughts about the budget analyst recommendations. 15 would be on controllers reserve so it wouldn't have to go back it

us, but [inaudible] want to knoo your response sw with all the budget and finance reserve- >> just on clarification, both of controllers reserve >> i think it said something different in the report or at least the one i have. >> puc is comfortable with the recommendations >> okay, thank you. [inaudible] both are on controllers reserve? okay. >> why don't we nowoen to public comment--[inaudible] >> [inaudible] it is money

and power because [inaudible] too well. low income condition >> we are asking for comments on items 14 or 15. anyone else wish to comment on 15 or 15? seeing none public comment is closed. onemore time from the budget analyst, 14 and 15 the budget analyst is [inaudible] >> we recommend release of finance reserve and place on controllers reserve >> okay, colleagues we have there budget analyst recommendation squz on items 14 and 15 i believe we are going to continue these items as well to the july 14 or we can pass them out now. pass them out right now. the chair would like tamake a motion to adopt item 14,

[inaudible] controllers reserve and item 14 [inaudible] snd out item 15 with positive recommend aigds for full board >> is there a second >> vecd by supervisor yee. we take that without objection. thanks very much. madam clerk can you call items 1 and 2 >> item number 1, hearing on budget update from the mayor, controller and budget legislative analyst including budget short fall [inaudible] item number 2, on controllers revenue letter for fiscal year 15 and 16, and 1617. >> this is what we wanted to start the meeting with and up first mr. kate hower the mayors budget director >> good morning kate hower

mayors budget director. pleased to be here to give a high level summary of what is included in the mayors proposed 2 year budget. you will hear lots more specifics from departments as they come their their hearings oreb the next several days. i want to say a word of thanks to everyone who worked so hard on this budget. my staff and mayors office, controllers office budget and analicist division and the team at budget and legislative analyst working very hard right now. the mayors budget is a 2 year balanced budget again. it is this year 8.9 billion in the first year of the budget growing to nearly 9 billion in the second year. of that approximately 4.6 billion is within the cities general fund. the budget includes funding for approximately 30 thousand employees, this is a sliget

increase from the number of positions funded in prior years largely due to opening the new san francisco general hospital, our public safety hiring plans and increase service level of the mta. the budget includes funding as i mentioned for san francisco general and the police and fire hiring plan and also includes the recommended funding levels for both it and capital which are both at really record levels in this budget. budget also includes funding for cost of doing business increase or inflationary pressures for non profit organizations in each of the new years of 2 and a half percent and fully funds minimal wage costs associated with the cities budget. you remember when we started the budget process in december the mayor issued instructions for the first time issuing

instructions with no requested reductions from general fund departments. at that time we were projected 104.2 million dollars over the dwoyears which improved to 88 million in march when the 3 financial officers updated the 5 year plan. in may when you received a update from the controllers office our deficit strunk to 9 million over the 2 years. that is a testament of the strong revenue we see in the current year and project in the budget year. i know the controller will provide a update on the overall health of the cities revenue momentitarily. just high level balancing to give a sense of the big categories the city is spending

resources in. this table is showing-i apologize it is missing fiscal year. the first is fiscal year 15 is 16 and the second is 16, 17. the third year gives a early projection of what the budget outlook looks like in year 3 and you see in the first 2 years the budget is balanced and the projection currentry is 215 million dollar in the third yire. that is important to keep our eye on as we go about balancing the budget this year because 200 million dollar is a pretty significant short fall which will need to be balanced with a number of solutions so we want to make sure we preserve that flexibility in the third year. you see in the first year we have relatively significant revenue growth,

over 280 million dollars and additional 100 million in the second year and in the third year the revenue is more than offset by the loss of a one time source, which is fund balance. you remember we spend the cities one time ending fund balance over the next 2 years of the budget as a starting source so that third year then does not currentry assume because it is not available all most 200 million dollars in fund balance. on the uses side, as our revenue grows the city is required to expend a certain portion of the fundsing on base lines and you can see that the line there reflecting baseline and budgeted reserves. in the first year 85 million dollars reflected there is all most entirely baseline funding

for [inaudible] childrens fund, libraries and our other set asides and baseline. the next line shows salaries and benefit said. we have relatively stable labor contracts over the next 3 years. you can see about 30 million in the first year, additional 57 million in the second year and in the third year 72 million. next year the city will be negotiating with our nurses. for the subsquents year, 16, 17 we'll negotiate with all the miscellaneous employees and in 17, 18 we negotiate with public safety, police and fire. additional cost on the city wide use includes the cities capital plan, our it

plan as well as interdepartment work orders. cost associate would fleet or real estate or power and water bills. all other departmental changes comprises all over changes made in the budge. i noted highlite said. major increstment in the budget including the opening of the hospital rsh new investment for reduce homelessness, the cost of doing business increase of 2 and half percent in each of the next 2 years, police staffing to bring up to [inaudible] by the end of fiscal 16, 17. investment in fire and ems staffing. a new residential and cor door cleaning initiative. there are lots

of other changes you will hear about over the next hearings rbs but i want to highlite these. going into a little more detail-these are a number of different investment in public safety departments. police academy. [inaudible] in the first year of the budget and additional 3 in the second. as you know the mayor included funding for body camries for all of our police officers as well as the associated storage and staffing costs for that video footage. we are including funding for new pair medics fire fighters and 911 dispatchers and making [inaudible] capital and technology across the public safety departments irn particular making significant investment in the radio-public safety radio

replace 789 project over the next 2 years. in the health and human services realm i aurmd mentioned the new investment in homelessness prevention including 500 units of housing, nav gaegz center pilot, subsidies for homeless families and medical respite service said mpts we also included new funding for senior centers, investment in the community living fund to help seniors and people with disabilities stay in their homes and funding to clear the wait list for home delivered males. i mentioned we are opening a new san francisco general hospital and we are also continuing san franciscos leadership in the fight against hiv and aid through the zero initiative. [inaudible] children and youth, i think many of you have spoke wn the mayor about new investments we are

making around preschool for all as well as eliminating the wait list for summer programs for youth in san francisco and creating a additional 820 new after school program slots. we'll continue the [inaudible] plus program which helps young people participate in work opportunities during their teen-age years. we areologist making new investments to promote a livable cities as the cities population continue tooz grow. this includes a residential cor idor cleaning crew [inaudible] we are including in this budget a crew to proactively address tree maintenance. we are also making new investment in the arts to expand art program and promote equity

across our arts funding. we also included funding to expand the pit stop pilot which is a public toilet program. on housing and affordability the budget includes all most 37 million over the next 2 years to account tr the cost associate would minimum wage on the cities budget primarily on non profit staff for which the city is paying for those services and wage cost. there are a few city employees who were being paid under the minimum wage, but very few. additional funding for job training. as i mentioned the 5 percent cost of doing business increase over the next 2 years and additional 79 million from the housing trust fund and also back filling cuts made by the federal government including [inaudible] and

cdbg. finally i think one of the things that the mayors most part of is the work we have done to make sure the funding included in the budget address said long term [inaudible] and if vestment things defered for a number of years including capital and infrastructure. [inaudible] including police [inaudible] nearly 18 million for parks and recreation. nearly 10 million over the next 2 years for arts and cultural institutions and 28.5 million dollars for [inaudible] sidewalks. we are aums making it investments at this time including implementing the financial system replacement projict public radio project and new electronic health

record to bring san francisco general and [inaudible] care into the 21 century. the cities reserves continue to be strengthened in the budget growing to approximately 339 million dollars in the first year of the budget which is a result of policies enacted by this board and a decision to refrain from spending rainy day funds during the economic time. i'm happy to answer questions you may have about this summary now or throughout the budget process >> thank you mr. how rbd. any questions now. supervisor wiener >> thank you mr. howard for the budget overview and particularly want to thank the mayor for back filling once again all the federal hiv budget curts. we are

appreciate of that and the mayor is a wonderful partner over the [inaudible] cuts do to the inability of congress to fund basic government needs and mare lee is a wonderful partner for myself, for supervisor campos and for the community as we fought to keep these life saving services in tact. i aums want to thank the mayor for recognizing that under any conceivable metric we are severery understaffed in the police detarmt and despite the views spressed by some that police staffing levels have nothing to do with public safety, i don't understand that argument, but some seem to kress sprestz it over and over again. i appreciate the mayor really gets it that we have a real problem in terms of lack of

police staffing, inability to respond in the way we need police to respond, traffic enforcement and beat walking so support ovthe mayors acceleration oof the police academy classes. i have 2 question, the fwirs with respect to trees and was happy to see there was some funding in the budget and we had this discussion many times and spoken to the mayor many times, it is-there needs to be a broader solution to how we address trees in san francisco. we have about over wn00 thousand street trees in the city and continue to dump them on property owners who may not have planted them or may not want them or have the where with all or ability to maintain them so we have a really spotty maintenance and actual decline in the number of trees. something like 4 percent of trees die every

year naturally and they are not being replaced. we also have i believe 140 thousand trees in the park system and over the years have underfunded the maintenance of those trees. i'm just wondering in terms of the long term planning for how we deal with this situation-as you know we floated the idea of a parcel tax dedicated to maintaining streets trees and the city taking responsibility ofor the trees, but there could be other solutions as well and kierious to know the mares thoughts on that >> thank you for the question supervisor wiener. as you correctly note this budget does not assume that we will-the city will assume responsibility for the overall urban canopy. the budget will continue the

relinquishment we are currently implementing. the mayor is interested in looking at solutions to make sure the urban canopy is maintained at the level we want. we are not able to identify the funding to take that on in the current bunlt proposal but happy to work with your frasolutions >> i appreciate that. even if this year for example the mayor or board were to say we'll put in the whatever it is, the 15 or 20 million needed to adequately maintainory urban forest-not saying that will happen, it clearly is not happening-i wouldn't have a lot of confident that would stick over time especially with the up and down of budget. i have seen over the years trees fair poor in the budget process and don't [inaudible] around public health and

safety and senior services are important needs that tend oo come out ahead of trees andthality is why we think a fund is the best bet. i want to talk about housing and affordable housing in particular. we know we need to invist more. i appreciate the mayors straund leadership around the affordable housing trust fund as well as proposal which i'm happy to be a cosponsor of, the affordable housing bond in november. we need to acslerate #3wi8ding, affordable housing and acquire sites. can you talk about how we might maximize what we are able to invest in affordable housing now because we have a lot of longer term structural housing fixes that i know are moving forward and will bare fruit in the long run, but people are struggling now so

how can we acseterate that expenditure? >> happy to talk bat that briefly. the mayor aproveed a thee00 million housing bond as one way to address the urgent needs for building affordable housing. the budget does include 79 million dollars from the housing trust fund to spend on affordable housing production, neighborhood stabilization i all of the things that are permitted as part of the affordable housing trust fund language. in terms of further acceleration or investment, while we don't think there are way tooz increase the size thf bond without impacting the capital plan

or raising peoples property taxes, i think one thing the board can consider is a continuation of what was included in last years budget, which is issuing debt off the inkrimental growth and housing trust fund. you recall supervisor that in the budget last year the mayor included 50 million of proposed debt issued of the inkrimental growth and housing trust fund. 25 million dollars in each of the 2 fiscal years. the budget as proposed to uincludes that borrowing in the first year of the budget, but does not assume dilshz borrowing in the seconds year of the budget. the trade off is when you use the inkrimental growth you pledge to a future debt payment and so a portion of the trust

funds growth then is sortf locked in to spending on that debt service, but that is a possibility. >> okay, and then i don't if know is the right time to ask or when the mayors office budget comes up, but i do have questions about equity-geographic ecawithty around the creation of affordable housing. this is the case for a long time, certain parts of the city where affordable housing production is concentrated and part of the reason for that of course, is in the area of the city where the disproportioninate lower income residence so it is understandable why that dynamic came into being. but, there are people struggling with housing in various parts of the city. i know in my district we don't have the same level of

poverty we see in some other neighborhoodss in the city, there are plenty of people of low income, moderate income, fixed incomes, people who are really really struggling in my district for example and i'm sure that is true, i bow that is true in other areas as well. there is very little affordable housing being built in my district other than the 55 lagoon uh-uh project which is phenomenal but putting that aside there is all most nothing being built. my concern is i'm very supportive of [inaudible] in the mission and helping folks in the mission and i'm very supportive of having the location based preferences, the legislation just nrtd deuced for affordable

housing, but my concern is when you start giving a preference for-i think it is done by supervisor district and when you only build affordable housing in certain areas that is very much a detriment of for example my constitch squnts have colleagues that can say the same thing. i feel the mares office of housing has not ever given me a adequate response of why they are not doing more in my district and investing in long term planning for site acquisition. i want to express that frustration and i don't know if is a response from [inaudible] now or when the budget item comes up, but i feel i have been banging my head against the wall for 5 years and i and others are very frustrated

>> i hear that frustration. i think the mayor agree with you that we need to build more affordable housing throutd the city, but every district has affordable housing and needs and-in terms of specific answers during the mayors budget office presentation will probably be the best time to delve deeper in to that discussion >> i appreciate that because i think now is the time to have a plan in place as was talking about taking 30 percent of the slots and saying you vapreference if you live in a supervisor district and because it is defined by supervisor district there is real distortions that can come into play so it is a long overdue discussion and it

needs to happen. >> thank you. >> thank you supervisor wean, supervisor mar >> thank you mr. howard. i'm really appreciative of the mayors balanced budget and your hard work on this. i know it isn't easy to balance the law enforcement and safety aspect with human safety net and capital needs of the city but i'm appreciative of am funding for the cost of doing business for the struggling non property sector. 2.5 percent plus 2.5 percent is really appreciative, but still center to address the structural embalance i hope the board can address [inaudible] i also want to say i feel the housing crisis and affordability crisis, there are many dch needs from emigrant legal defense to homeless families and

transitional aged youth and eeben more for seniors for delivered grocery and other programs and hope we'll look at in the next few weekz. i also want to say the crisis for artdest mereies the crisis for non profit in the city and hope to look that different funding mechanisms in the budget and enhance them. i wanted to ask about the passage of prop c, childrens fund and public education inretchment fund. i wonder-and theectionpansion of preschool for all and additional affschool program, what are those are on top of what we passed for prop c as voters acted last november? >> thank you for the question for vieer mar. let me clarify, which