recept squz expendsures in fiscal year 2015, 16 >> i see cathy wagner and mr. robertson >> good morning, cath y wagner with san francisco airport. i'm joined by bruce robertson who can answer questions as well. the airport is rerequesting the appropriation to 15, 16 operating budget for 2.6 million dollars [inaudible] light, heat and power work order. of the 2.6 being requested the airport is seeking approve for 1.4 million for increased utility rate via the work order as well as 1.2 million in the form of airport annulate service payment. these

increases reflect a growth in concession sales generated by ground transportation fees. the budget analyst reviewed the request and recommended approve of the supplemental >> colleagues questions? seeing none mr. rose can we go to rourt on item 5 >> yes, on page of our report, this isn't the budget report recommendation, the separate report, the airport is increasing service payment by 1 [inaudible] from 39.6 million to 38.8 million and that is shown on page 2 of the report. do recommend you approve this legislation >> as when we have individual items that have legislation

we will take public comment on the legislation itself so if it there is anyone that wishes we'll open up public comment on item 5 itself. any public comment? seeing none public comment is closed. supervisor tang >> thank, i would like to the make a motion to approve item 5 and send it forward to full board. >> we have a motion by supervisor tang. can we have a motion to paz this to the july 14, board meeting where we'll hear the entire package of budget items >> is there a second >> second by supervisor yee. madam clerk can you call items 12 and 13 together >> itedm 12 ordinance amending ordinance 146-14 by appropriating 2.2 million

benefits non personal services service of other department squz general reserve jz appropriate funds to fund salary, [inaudible] overhead in the public utility budget. [inaudible] item 13 [inaudible] to reflect the additional 5 budget position in the public utility position, water enterprise department in [inaudible] >> we have mr. [inaudible] who runs the pec. thank you for being here >> good morning. harlen [inaudible] we reached the midpoint f a 2 year budget so here tagive a high level overview of our request for midcycle budget adjustments. looking at-going through the presentation i want to focus on the approach we take to balance the budget, the successed we had this year

and the challenges we are facing ahead of us. those have a financial impact. then i would thrike propose a operating budget adjust mentd for the upcoming fiscal year. every year we emphasize on the approach of balancing our budget with 3 core piorbties schis deliver high quality 24 hour 7 days a week in water power and sewer. we want to main stain infrastructure to insure assets are in a state of good repair and like to preserve the [inaudible] we are balancing these priorities and some of the thicks we have done, number one we dhept operating budget flat. in previous years we had relatively flat budgets only for inflation. number 2, we enjoyed low cost bond

financing. our team has bun a outdstanding job locking in historic low rates for bond financing and refunding. number 3, we time and phase the capital improvements so we can minimize the impact on our rate payers. here's a bird's eye view of the current fiscal year 14, 15 and 15, 16 adopted by the board of supervisors. as you can see we have a annual budget, approximately 940 million budget. this comprises of operating, cash fund nob and debt service. the 50 million increase from last year is debt sunchs. we are close to issuing all the debl for the water

improvement program. this is consistent to be ree libel. the overall budget remains flat with nob with debt service and con tractual obligation chblt we had a lot of success in the past year and want to highlite a few that had a impablth. suck sss ein the capital area, water improvement plan is on track for completion. it is ov85 percent complete. we are on phase 1 of the sewer program. the [inaudible] which is a main portion of the [inaudible] is ahead of schedule. we hit so many major mile stones on the power side. we issued the first municipal bonds in the history of power enterprise. we received a bond rating of double a minus and a plus which makeathize enterprise very stable. we work on a business plan for the

enterprise z we are on schedule and launching the cca program. a major focus of the aensh at this time of drouth is promoting walter conversation. i'm proceed the customer, retail and city kapartments have helped reduce water consumption of 8 percent under the call of the volunteer conservation. now we are mandated to reduce our use by 10 percent issued by the state. as we look ahead for the second year of our budget cycle, there are a number of challenges that wim impact our budget. dot impablths, while consursation a big success it also posed challenges on the financial projection. our projection water sales are down at both retail and wholesale level which means 24 waste water

revenue is down since water and sewer fees are linked. on the power side, we are jun rating less hide ropower so the power saleerize down as well. however, we are doing very good job of managing this issues with plan reserves, but if the drought persists, it could impact our rates and we'll need to have a conversation about how we address these challenges. one of the examples is moving our rates to more fixed rates versus volumeetric rates. the next major issue is climate change impacts. in this time oof drought we are seeing fewer but more intense storms. these storms result in localized flooding where the sewer system becomes overwhelmed. we have a number of claims to settle due by the flooding of the storm of last december. i want to thank you for

approving the supplemental propeation of the claim jz want to thank supervisor wiener and yee working with the [inaudible] as we address these challenges to the communities. the other issue which is significant is the increase of development city wide. you can look across the skies of san francisco and see so many crane as as development increases. while we do our job it means [inaudible] it also is a challenge to meet the demand for connecting propertyies. we need resource squz staff to meet the demand. let me walk through how we are proposed to address these challenges to our budget. i want to emphasize a vast majority of our budget is not changing. we vafew budgetary adjustments in fiscal year 15 16, that reflects the high level priorities we need

to address. on the revenue side lower water and sewer sales due voluntary water conservation result and reduced revenue of 9.6 mittian for water enterprise and 14.9 for waste water enterprise. we are offsetting with plan reserves. we also have fewer expenditures tew count for in fiscal year 15, 16. new service [inaudible] support. as development continues to grow in the city we need to increase capacity to connect new development and address connection back logs. on the slide you'll see twee are bringing 5 new positions to support new pipe line oof service insulation. the slide shows zero dollar impact because they are funded by existing projects. as we request a half million dollars for large vehicles

to transport crews and equipment, the cost for this is cover bide the conduction fees are on the customers requesting the service. this work [inaudible] supports new housing development, large scale development and especially in the south east of the city. they are also support water pipe line replacement programs which debled in the recent years and will continue to increase. without the staff we would not be able to meet the rate of pipeline breakage. we are facing 2 month waiting time for new service, instullation for new home owners. the [inaudible] to keep up with puc payment program with pipeline repacement. salaries we request 1.4 million relate today salary adjustments.

this includes the conversation of 10 temporary positions to permanent following a mou agreement with seiu and other routine mou adjustments. flood watting management, we continue to work to identify long term solution tooz address louckalized flooding on one of the most important ways we are managing flooding impact in short term is through flood water grant program. the program was created in 2013 to help vulnerable property owners, financial flood barrier jz backflow [inaudible] this is a quarter million dollar appropriation to continue to support this program and we are getting to release improvements through the grant program to consider alternative projicts posed by property owners that are well receivered by the community. all together we are

requesting a midcycle adjustment of 2.17 million dollars. this is a net zero adjustment covered by reduction and fringe bfts and other savings and will not result in increasing our budget. as i wrap up and want to thank the committee for rently approving the budget related items including the appropriation for flooding claims and over time cost. i aumsh r also want to summarize the pending puc items before the committee today. we are requesting 2.17 midcycle adjustment for fiscal year 15, 16 budget to cover new service instullation, salary and flood water manment program. we have 2 separate items today related to start of capital to launch the community choice aggregation

program, the supplemental [inaudible] for 4 million dollar and reserve of 2 million dollar. ument to thank you for the support of these items and cce program. i'm happy to consider any questions >> thank you mr. kelly. any questions at this time? can we go to your report on 12 and 13 mr. rose >> mr. chairman and members of #c34i9 er committee on page 5 of the report the puc proposes to deappropriate 2 [inaudible] in surplus funds in the waste water [inaudible] enterprises and the puc operating funds. the detailerize shown in table 1 page 5 of the report. the reprope aigdss are shown in table 2 on page 6 of the report and explained on pages 6 and 7. we do recommend that you approve the

proposed ordinance >> okay, thank you very much >> that is item 12 and item 13 mr. chairman >> yes, please, thank you >> item 13 of page 9 of the report we note the 5 new auch budget positions are funded by water service instullation revenues previous appropriated in the water fund enterprise. these revenues are estimated to be, 726, 146 and that is shown in table 1 on page 9 of the report and on page 10 of the report in table 2 we note the cost of the 5 new positions in fiscal year 15, 16 are spected to be 672, 448 dollar jz recommend you prove this ordinance >> thank you very much mr. rose. any question frz the budget analyst ? this time weem rr open up

public comment on 12 and 13? seeing none public comment is closed. we have a budget analyst to approve item 12 and 13. as with the prior item i would like to recommend [inaudible] y see moved. >> motion by supervisor tang and second by supervisor wiener. take that without objection >> madam clerk, do items 1 and 2 first? before we do that if you would call items 3 and 4, madam clerk. these are the budget hearing item squz take this quickly out of order and have mr. sis narose come up so he can get his hearing done >> item 3 proposed budget-- >> mr. chair, [inaudible] controllers office. i don't know if it is expeditious to hear items 14 and 15?

>> we are going to do that before the puc leaves here, but i want to get mr. sis narose on his way >> item 3 proposed budget appropriating all estimated receipts and estimated expenditures for department of the city as of june 1, 2015. [inaudible] item 4 [inaudible] e#23450i78erating position in the annual budget for fiscal year year ending june 2015 and 16 [inaudible] creating and establishing these positions >> this is the item we'll hear all the department. mr. sis narose congratulations you were the first up for the if tire year >> thank you, i appreciate your recognition of the schedule constraints and we are putting something on the

overhead . good morning i want to thank the board and supervisor budget analyst for working on this budget. we are not yet in agreement at this time and will work diligently to be in agreement by the time we get here next week. as you know the office of the treasure tax collector [inaudible] serves 2 functions for the collection of tax revenues and [inaudible] on the tax collection side we manage to bring in billions of dollars in tax collection annually. our major categories include property tax, business tax including our new gross receipts tax, the pay roll tax, the [inaudible] and parking tax and since propersition e passed in 2012, our office is leading the implementation thof gross receipts tax. we ails collect hundreds of fee squz

license on behalf of city and county and serve as the delipgwit collection ainsh fl sth city. we manage approximately 6 billion in funds under management and manage those for safety, liquidity and tern for a [inaudible] social responsibility. as many are aware our office of financial empowerment we build a strong system insuch that is inclusive and fair and helps aprieve these goals through programs such as programs for kindergartern through college. investment in improving business property and technology over the last few years allow more z more of taxes to be filed and paid on line. it allowed to move the work flow unin the office to be more paperless and make

more it digital for archivel purposes. it allude to improve responses to taxpayer squz improve the way we work with them. the gains we are seeing based on that, the on line gross receipts filings and business registration fees resulted-those laws resulted in changes for 100 thousand business taxpayers in the city. we have also seen on line taxes-some of the biggest taxes of parking and hotel go on line which we collect hundreds of millions of dollars dollars. recognizing not all taxpayers are compurtd savvy we serve [inaudible] to insure successful compliance with business registration renewal. we responded to

over 25 thousand 311 service tiblths to make sure peoples question get answered and address. this year we implemented property tax program which brought in [inaudible] we are also working to bring counsel to the service programs like the cities work force training eft, the public housing and we do this in partnership it [inaudible] oewd and cities housing authority. i'm proceed to say the kindergarten to college program hit a mile #1230e7b where families 7ed 1.2 million of their own money for childrens college education and half of these families saving are qualified for and receive the federal free or reduced lunch

program. in fact, we are doing all this by vg our department budget-we are not having a proposed increase in the budget for each of the upcoming 2 budget years. in fact, our budget decreases in both $2 budget years. in fact, our budget decreases in both years in realism in the past our budget nfte growth is all to support the gross receipts implementation. without this projeblth our budget remains flat while other department said have grown by over 400 million dollars. we are seeing a greater number of tax types and more complexity to the taxes we collect in areas like the gross receipts tax, the trans[inaudible] occupancy tax and annual business registration. this work is possible because our department is increasing efficient and engaging with technology to provide better

service and enhance collection jz we believe we must maintain the ability to staff appropriately to meet these needs. we feel our budget request is appropriate and look forward to working to reach agreement with your by next week. thank you so much for your time >> thank you mr. sis narose. any questions at this time? supervisor yee >> thank you mr. sis narose for your presentation. you mentioned several items were-thinks have changed and one of the things that i'm thinking about it is-i was curious because there is a lot of discussion about short term rentals and collecting of the fees and taxes and so forth. you didn't really mention it. has it had a impact in your office since wree sort of charge today collect the fees? >> yes, the trans[inaudible] occupancy tax applies to all transactions where a vister or guest is paying to stay

in the city. it is responsibility in the office to collect the [inaudible] occupancy tax and under the law the hosts that provide those services would be operators and we have done extensive work to reach out to operator said. we put a lot of information on the website and modified the forms and open to work with the host as they start to comply with our laws >> do you approximately how much was collected? >> we don't have a breakdown by the different type of operator saidism we are looking to gain more information about that as we go forward. we don't typically distinguish between oprairlts of different types because honestly we don't have too many different [inaudible] occupancy operators up now. are

looking to put those distinctions into the [inaudible] the new business restoration form are starting to ask operators if they are hosts so we hope to have more information about that in the future >> thank you >> colleagues,gy other questions >> mr. rose, quickly do you want to touch on this item? >> yes, on page 78 of our detailed budget report, our recommended reduction for the proposed budget total 686, [inaudible] 246, 650 are one time. 449, 363 are on going savings. [inaudible] all are on going sabeings and as the department stated we are working with the department

and will report back next week on the final reduction >> any questions for mr. rose or mr. sis narose? see you back next monday. safe travels. we are going back to the items we want to knock out so if yoi call items 14 and 15 madam clerk >> item number 14, hearing to consider the release of reserved [inaudible] 2.2 million [inaudible] item 15 appropriating [inaudible] to provide short term working capital need frd the initial start of the community [inaudible] aggregation program >> thank you very much we have barbary hail >> thank you. barbary hail. the 2 items before you allow us to launch our community choice aggregation program and fund it in the early

operatoring days. itedm 14 covering the prelaunch program implementation cost. that is staffing cost, technical consultant cost and communication and out reach program which includes the statutory required preenrollment notification. we estimate spending the 2.2 million currently on budget and finance reserve on those 3 areas. the second item, item 15 is where we are seeking a 4 million dollar loan from the [inaudible] fund blajs to community choice aggregation program clean power sf. this would allow us to begin to provide service to customers in the program, to bill them for that service and receiver fraiment the service. we

expect that process between beginning service and actually receiving payment for that service to take about 45 to 60 days. this 4 million dollar loan for working capital we are seeking from the [inaudible] fund would fund those early months of the program. we expect by may of 2016 we would be in a position to repay those loan funds and begin to bay that back. the loan we are seeking is 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