this earthquake occurred. he passed away at 109 years of age. just 10 days shy of his birthday. he was a friend of the department. we loved seeing him the morning of the commemoration of the 1904 earthquake and fire. this meeting is now adjourned. [ meeting is adjourned ] >> good morning welcome to sa

francisco board of supervisors budget and finance meeting for wednesday february 3, 2016. i'm mark farrell and chair thg committee and joined by sfr visor katy chang and norman yee. thank you to [inaudible] for covering the meeting as well as linda wong. do we have announcement? >> please silence all cell phone squz electronic devices. [inaudible] items acted apauchb today will appear on february 9 board of supervisors genda unless otherwise stated >> thank you madam clerk. can you call item 1 and 2 together? >> resolution [inaudible] the public interest and [inaudible] demand the construction, acquisition improvement seismic strengthening and betterment of critical [inaudible] homeless

shelter and service facility and related cost necessary or [inaudible] find thg estimates cot of $350,000,000 is too great to paid out of the annual revenue [inaudible] item 2, ordinance called and provider for special election to be held in the city june 7, 2016 submitting to voters to incur bonded debt of the city. >> colleagues we have these items we continued from last week here at committee and brian strong was director of capital planling planning is here to provide a presentation. >> thank you very much. brian strong director of capital planning. good morning. happy to be back before you. let me just get the

presentation. that may be the best that i can do on this right here. there we go. so, today we are bringing back before you health and safety bond. last week it was introduced in december and came back, came to you last week. we needed to make some amendments to it. we are actually going to submit it to you today and then we are making additional amendments that are caughtifying the

agreements we made before and already explicit in the budget analyst report that you had already seen. so, the bond is a $350,000,000 bond and make vital city facility to protect public helt and safety. we adjusted the bond to reflect 3 really primary project areas and those are reflected in the amendment to the-in the amendment you received today. so, the first area is public health, public helths safety and that is what we talked about consistently for a number of years. which is zuckerburg general hospital that is referred to as building 5. it is the existing hospital and

1970's era white concreate building on the campus that needs to be seismically improved. we will talk about dph helths centers. southeast is a $30 million bond and also wanting to address other dph centers across the city. both the hospital and health center, barb raw garcia will speak to that. the next item is ambulance deployment. we amended the measure to also add $14,000,000 for neighborhood fire station improvements. as host are aware there is a strong need for improvements to fire stations across the city. that brings the amount for fire station and fire

facilities up to $58,000,000 and chief hayes white and deputy chief ken bim bardy are here and will speak to that portion the bond. finally there is a aadditional program which is homeless suvs site which will address monderization and other full sillties to improve homeless service and sam dodge from the mayors office will speak on that bond. with that i'll fass pass it on to barbara garcia. >> good morning supervisors. we are excited to be here today about this bond frmpt the first case the hospital campus this makes critical earthquake safety improvements and focuses

on the ont psychiatric emergency department which will stay in the original building so this provides safety for that service. it will look at impruchbment through ambulitary care program. many the ambulatory care programerize throughout the campus so this will bring us together. we also have a over 100 year partnership with uc and this will help them with the seismic standards the uc regions to allow them to fully operate with us and move them out [inaudible] the hospital schedule and budget is $222,000,000 budget and as you can see the budget goes from april 2017 to 2019.

this one stabilized the building will serve as a centralized outpatient program for 600 thousand visits per year and will house urgent care in the psychiatric emergency service. we have many health centers throughout the community and for the last 10 years i worked on how to improve and expand our help center in the bayview. today we have a renovation going on there to insure that it is reflective of the new way of providing care and so we have a $2,000,000 improvement and are looking how to expand southeast to have a integrated model. [inaudible] this is a $30,000,000 project that will provide for a model of care of integrating mental health, substance abuse service and as well as primary care services. we will also look at the

networks of the health clenics, which had all most 300 thousand prime care visits and specialty care so southeast will have a $30,000,000 expansion and $20,000,000 for projects going forward providing seismic safety and also providing models of care for integrated care. southeast health center $30,000,000 with construction starting 2016 and through 2019 and the others going 2016 through 2020. i'll hand it ouf to the chief of fire. >> good morning. thank you to the director of public health

barbara garcia we are happy to bridge this foryard and talk about the need for the bond. there will be $44,000,000 is geped. we are housed at 14 feent evans, it afstismerary solution that begin in 200 seven and inadequate and what we will get from the new facility is much more efficiency. we believe we should see decrease in the response time. this facility would meet essential facility seismically safe standards and at this opinion we have a shared facility with the logistics unit and the inadequate part comes in we are only able to restock one ambulances at a time and the new one we can stalk 3. we move from 24 hour

basedoombulance to a deployed peak period staff model which proved very well for us so we believe it is seismically safe and will insure the dispatch facility remains operational after earthquake and on a day to day basis provides a lot more efficiency. the next slide that i wanted to point to is the $14,000,000 that will be added to address needed up hp grades and modernization to our ages facilities. this will build on the good work voter squz legislative body of government passed in 2010 and 14 and we will continue to modify and upgrade and make seismically safe our facilities. we have nearly 50 facilities, 44 fire stations and 6 support facilities so we look

forward to this bond placed before the voters and legislative body is very supportive of public safety and in our abilities to be able to save lives and property in the city. at this point i would like to turn it over to sam dodge who is the directors of the mayors office. >> thank you. good mornic supervisors thank you for having us. the homeless service sites priorities include improving and expanding services delivered here in san francisco to the homeless population and making sure we vasafe and healthy environment for those service to be delivered and improving the efficiency and effectiveness of the street average programs. so, we really have a unique situation where we own some of our largest capacity, we own our large m

[inaudible] south facility and own the 1001 shelter facility and need to address health and safety deficiencies in our city owned sites and to make sure that these sites are good for families and for single adults we are serving. we also really need to have a more proactive program when it comes to serving the homeless and that means have a good home for the outreach team reaching out to the street and bringing the services beyond the wall the shelter jz making the shelters accessible to people that are outside of the system of care. we need to expand that innovative model. our cuncht shelter system works for many people, but there is many people that it isn't working for and we have to opportunity with capital investments to make sure we build a system that can

help end homelessness fl vast amajority of people if not everyone. now we are going through a process of department formation and bringing all our different homeless services together into one department and part of this work is going be working on a capital plan that followed these priortiz i outlined. our homeless service center sites programs will include these listed and will work on the construction and planning schedules as listed. with that, any more from me i look forward to your questions and i have a few people here that are-that want to speak to some of this and hopefully they can speak soon so we can get them out of the door. we are trying to open up a emergency shelter today and have to do work on that. >> thank you mr. dodge. colleagues any questions? mr. rose can we go

to your report for items 1 and 2? >> mr. chairman and members of committee of page 8 of the report we showed the break down cost of $350,000,000 for the 6 proposed projects and that is page 9 of our report. on page 9 we report that the project crossed totaling 350 $350 million do not include furniture cost or equipment. such cost total

10, 800, 000 dollars. on page 10 of our report we state the bond will result in smailted total debt service of 603, 999, 767 dollars including 253, 997, 757 in intrest and $350,000,000 in prinssple with debt payments of [inaudible] and that is over a approximate 20 year period. the owner of a single family residents with value of 600$20 year period. the owner of a single family residents with value of $600,000. additional property tax of 54, 27 cents to cover the general obligation bond. all such property tax increase should be offset through the [inaudible] general obligation bonds. on page 12 of our report we

have two recommendations, first we recommend you amend the ordinance and resolution to add on january 26, 2016 the planning department determined the bond [inaudible] community health center across the city to mental health urgent care, substance abuse and social services were [inaudible] under ceqa guidelines section [inaudible] establishment of rates tolls fair squz charge frz the purpose of [inaudible] and secondly we consider aprovel of the ordinance and resolution as amended to submit $350,000,000 bonds to the san francisco voters to the 2016 ballot. we are happy to respond to any questions >> thank you very much mrs.

rose. mr. strong can i get the dla recommendation? i just want to clarify this as a long paragraph and want to make sure you are copesetic with it >> i believe the city attorney in the amendment that language that we just submitted amending today made those questions so the amended version before you has that. if it isn't in the same language it essentially says the same thing, making sure that we had the ceqa approval language properly put in there for the aspckt pect of the bond >> before we take action i'll kern form that. colleagues any questions for mr. rose? we will move to public comment. i have a number oaf speaker cards here and we'll try to get people off as seen as we can. i know tom o'connor is here from [inaudible] so call

him first. commissioner edward chow. sue car lisle [inaudible] roma guy and we'll take those as they come so please line up against the wall. 2 minutes [inaudible] a few more speaker cards and we are taking them in theordser submitted >> tom o'connor. i can tell you from personal experience the drastic need for these funds. i was the first lieutenant to work at station 49 and 10 years ago that was a temporary solution to our new and growing ambulance fleet and 10 years later the funds are needed to provide a modern facility for a city growing by leap jz bounds. the futility houses over 200 employees and urge you to approve the 44 million$44 million cr as well as

[inaudible] >> thank you very much, next speaker, please >> supervisors good morning, doctor edward chow, president of health commission. i served on the commission for over 26 years and i see that this bond issue is a natural progression of where we have been. we have built with the help of the board and with the help of the city world class facilities at laguna honda and san francisco general. today the bond issue calls for us then being able to improve our facilitys so we can continue to deliver ambulatory care services and also make use of building 5 so it can then bring together the clinical services that sf general and remove many of our current services in seismically unsafe buildings into a more safe

area. our vision a number of years ago in opening community clinics is provide primary care services at the local neighborhood areas. today with not only our ability to do that with new facilities or updated facilities and also the abilities to renovate so we deliver todays care allows for combining of physical and behavior health services. i urge you to support the bond issue. >> thank you, next speaker, please. >> good morning supervisors. sue carlisle and vice dean for ucsf school of medicine. i'm here today in that capacity but also as a resident and home owners in san francisco to

urge you to support this public safety bond. as doctor chow so eloquently outlined, we are just about to open the state the art new acute care facility that was built by the former bond in order to meet seismic specification of the state. by doing this on may 21, we will move into this building and have the opportunity to serve our 100,000 unique patients that we see on that campus much much better. this will be by seismically ret row fitting the current acute care hospital and turning it in ina ambulatory care facility. this will serve the sf health network throughout the city by

providing state the art outpatient services which are commensurate with the inpatient services we are about to be able to offer. for these reasons i sincerely urge you to support this bond issue. thank you. >> thank you, next speaker, please >> good morning commissioners. tedmic low and chief of orthopedic surgery at zuckerburg san francisco general and [inaudible] chair the clinical practice group. like doctor carlisle i'm also a resident and home owner in san francisco. i would like to speak in favor the bond measure. as you know we are kneting ready to move into this beautiful new hospital in may and as many the services in the hospital are going support all och the wonderful things we do including trauma care, it is not going house all of the

important functions that will be necessary to provide care. as you know, the san francisco general is the only level one trauma center in the city and requires a variety of different and complex functions and support centers and many of them are housed in the existing structure and will not be able to move to the new facility so i encourage you to support this bond measure. thank you. >> good morning supervisors doctor todd rr may and chief medical officer as that zuckerburg san francisco general. in that capacity i am responsible for all clinical care operation quality and patient safety for the entire safety inpatient and outpatient. i want to speak to the services that will remain in building 5, the current acute building. we currently have a

skilled nursing facility that allows to transition patients from acute hospital back to the community. they will continue to stay in that building. we are moving our urgent care center into the space that will be vacated by the current emergency department. this capacity will allow to off load patients from the new emergency department decreasing divergent rate. this serves as a critical cup pount of the melthal health network throughout the city. two functions, we have the psychiatric emergency service which is the only 24 hour 7 day a week psychiatric service for the city. we have acute inpatient unit critical for care. we need these services

toects tend the continuum of care for mental health patients. thank you. >> thank you, next speaker, please. >> good morning supervisors. jiff [inaudible] physician at san francisco general and ucsf and i'm here as the chief medical experienced office for the campus but also as a home owner and residents in san francisco. i live two blocks from station 7. what i want to talk about today is supporting the community services with the bond. the second thing is the experience of our patients at the hospital and the third, the coordination and think that the bond represents. the first piece as you know have the new acute hospital. what we will do with the building is reconfigureier the outpatient services. this is where patients will come for subpotentialty care, cardology, pulmonary. it is also where

the primary and tertiary diagnoset work is mptd ct, mri in support of the primary care doctors in the community. that is the support piece. the second piece is the experience. as it is configured as a 70's building the through is terrible. people are waiting that contribute tooz the dismay and discomfort. the third is the privacy piece that goes with the current configuration. the third thing that is appropriate that we are here together with the fire department as well as homeless services indicated how we hope to coordinate and integrate across the city betterment thank you so much. >> next speaker, please >> good morning supervisors. [inaudible] english executive director of saint vincent de paul. the majority of the work is [inaudible] referenced

by sam dodge. i'm here in support of the overall bond for health and safety. there is a village mas corrading as a city and showing up the health and safety is more impactful than other cities due to our size and scale. as we speak today the [inaudible] elevator is out and broken. not a good scenario, quite often the case. the roof needs to be patched. also we have to give a eye towards what is humane shelter and this bond measure can give breathing room. i'm 100 percent in support, thank you very much. >> thank you, next speaker. >> good morning supervisors. roma guy from taxpayers for public safety and former health commissioner, so i want to support the previous speakers but we support this bond because

partially it is a continuum of what the city invested in to modernize san francisco general and some of the health centers. in the 70's as others have said, southeast for example was health education. the purpose was different and now we are modernizing the purpose because of aca and helthsy san francisco and our new understanding how to integrate mental health, substense abuse into primary care system. this is what you are seeing for continued renovation of building 5 at san francisco general like we improved the new emergency services this past year. so, this is where we are coming from and this is why we want to support this bond and we really think this will be a improvement at the shelter system with best practices as well as looking at the repurposing of the shelters

and we support this bond 100 percent. the fire department will be doing the pre-hospitalization. they have been deloying at a temporary place as the chief said for 7 years. it is time to put them in the right place. thank you. >> thank you, next speaker, please. >> good morning supervisors. my name is curmt [inaudible] i would like to support the bond generally but like to make sure the city is covering all the bases on seismic resistance. i do scr to say i support the san francisco general hospital because one day about 8 years ago i got a ambulance ride from a emt named jennifer martinez and [inaudible] a bunch of nurses put a chest tube in and that improved my life dramatly. the think i would like to address are, i believe that the city of

san francisco has to address infrastructure over and above the thinks things in the bond issue, specifically the sewer and water lines that i think is a presentation coming up before one the other commissions that says they replaced 14.89 miles of sewer and [inaudible] inexpected 157 but you still have incident like the church street sink hole, the iza bella something main failure and i think the cast iron water distribution system is very significant need that needs to be addressed. and we have [inaudible] being built in the neighborhood at [inaudible] and i know the san francisco fire department requested portable mains and hydrants and those should be a priority item for

the budget sometime in the near future. >> thank you very much. next few speaker cards, laura thomas, [inaudible] jane lee, [inaudible] mina young [inaudible] jimmy lys, curmt [inaudible] and ken rejio. please come forward. >> thank you supervisors. [inaudible] deputy state director for the drug policy alliance. i am also san francisco home owner, taxpayer and live less than a block from san francisco general hospital. i have been in front of various committees and the board over the last couple of years talking about changing how we invest in public safety and public health and arguing against investing in jail and criminal

justice and in favor of public health responses, particularly for folks with substance abuse, mental health issue and homelessness. because of that this is the kind of bond i think san francisco needs to be investing in that i look forward as a taxpayer to supporting . what we have been saying in the context of the jail is san francisco can do better and this is a example how we can do better. san francisco department of public health has a well deserved reputation for providing excellent services and the staff in the health department and the people that access the service dissever to have safe facilities to access that. we talk about the intersection of melthsal health and crim crl justice system expanded are where we should invest our funds so happy to support this initiative and bond and

this investment in the public health responses. >> thank you, next speak er, please >> supervisors, tarry lang and exectev director for [inaudible] health and wellness and director of the african american community health equity counsel and here to speak on support of the health and safety bond. particularly as it pertains to the $30,000,000 for the renovation oef the southeast health center. the need in that part of the sector is great and this bond that will allow for better integration of minuteal health substance abuse and primary care is essential to meet the needs of that community. some in thocommunity worked on expanding that facility for years and they would like more

dollars put toward it but we must not let the perspect get in the way of ingood. i think this is a good solution and encourage you to support it. >> thank you next speaker, please. >> good morning. i'm [inaudible] property owners don't have money to maintain the problems. [inaudible] thank you. >> thank you. next speaker, please. >> good morning supervisors. we san franciscans oppose a [inaudible] it will greatly increase our financial burden. [inaudible] i'm

retired and [inaudible] owner and a low income person. this year my pension is the same as last year but this year everything is more expensive than last year. i didn't get help from the city but the city keeps asking me for help. it's not fair. i urge [inaudible] thank you. >> thank you, next speaker, please. >> good morning supervisors jeff [inaudible] executive director of hamilton family sent squr operate the cities largest family homeless shelter located at 260 golden gate. the building is owned by the city and has quite a few capital needs. strongly urge you to support the bond to address the needs at both the shelter we operate as well as the orebt city owned shelters throughout the city. thank you very much. >> thank you very much. next speaker, please. >> good morning supervisors.

[inaudible] i'm property owner and taxpayer in san francisco. i speak in support the bond but also here as a representativeof the african american healing alliance which i'm a board member and also president of hunters point family. this issue is in critical and essential particularly the southeast $30,000,000. those dollars will improve to make sure our clients get the kind of healthcare necessary for the quality of their livesism one of the things we struggle with in the southeast community is what we call, persistent traumatic stress disorder and that means you live in a environment that the stress doesn't go away so you are not in [inaudible] you are in persistent traumatic stress and has implication for mental health, substance abuse and physical helths so we urge you tapass this bond

forward to the community so we can have the kind of healthcare in the southeast sector we need. as a retired member of department of public health, we had this discussion improving southeast facility for over 30 year jz there is the opportunity to do something and strongly urge this board to do that >> thank you very much, next speaker, please. >> good morning. my name is lena young. i am a small property owner and i have mr. chang with me here. we have about 300 signatures. we oppose this bond. we oppose the bond as it stands now. we pay for at least 50 percent of the funding but we don't get a say in the bond and i understand that the city budget allocated 32 million on

the homeless and sickt 2 million on the hospital and thit isy hasn't been be able to reduce the problem of homelessness so we don't see the result of the money we invest. the city should resolve problem squz not maintain them by building more homeless shelters won't help. you need to train these people to become productive and perhaps help them become-to help take care the trees. the home owners take care the trees of the city and we already pay for it just because the city was in the financial crisis then so you should pick that back up. the people already are complaining that they can't pay the rent or mort gj so please be sensitive to peoples financial bird squn please say no to this bond as is. thank you. >> thank you very much. next speaker, please.

>> good morning supervisors. my name is [inaudible] i'm a small property owner. good morning ing supervisor. i am jane lee and small property owner. [inaudible] is for all san franciscans. small property owners shouldn't be the atm machine. we need to oppose these bond. the city [inaudible] it repeatedly asks for more money to maintain the problem. the city needs to respect the owners [inaudible] so please, no on this bond. thank you. >> thank you very much. next speaker, please. >> good morning supervisorsism

ken rejio of [inaudible] community service and echo the previous speakers that saying a san francisco resident and home owner and am asking or speaking in support of this bond measure. i'm pleased that included in it is improvements to shelters, episcicul community service. tonight 600 in shelter and have another [inaudible] it is apparent with the level of utilization in shelter that a steady source of revenue for the improvements at a constant-[inaudible] talked about elevators, these are not unusual circumstances, [inaudible] flooring and constant upkeep with heavy level of use and it is remarkable and a good thing shelter improvements would be included in that and speak favorbly on it. >> thank you very much. any or members the public who wish to comment on items

1 or 2? okay. seeing none public comment is closed. colleagues i know there will be a number of amendments here and still working on ceqa language detame detail on those so have to post the vote until later in the agenda. we can take comments now if we want. why don't we do that. supervisor yee. >> i just want to say the vast majority of these projects are pretty much what i think is needed. it is well thought out in terms of when we were going do this and how we will do this and people have been thinking about these projects for a while now. i guess my question is when we had this recent change with taking animal care and control out of there and

putting other projects in there, can somebody respond to where these projects came from, how specific are they or have they been in the plans like the other projects for the last teen years? i don't understand that piece of it at all and in fact tell me why we switched everything out. >> brian strong with capical planning program. thank you for your question. so these are projects that for the most part have been in the capital plan, so when we move forward with doing bond and those types of things, there are various projects we can put in and others we are not able to put in. for instance, a lot of the

community health centers are work we have seen come to the capital planning committee through budget requests. they are in our capital plan as some of them are as planned to be funded well into the future or emerging needs so that is part the thinking there is hey, these are critical facilities that are important right now and that we could insert them into the bond program. var similar with neighborhood fire stations. public works did a evaluation of the cities fire station and i believe the need number is north of 600,000,000. this is something that is a priority. fire stations are critical and public health and safety matter so that is why those-that is why a additional $14,000,000 was

put to those projects. for homeless shelters are shelters in the capital plan and in need and not financed in the capital plan but things we know we had aware they are infrastructure issues are elated to it and fit with the helthd and safety bond concept and program. >> and in thinking about putting this bond to the people to vote on, it isn't something they just thought of in the last few months is it? it seems you have been planning this for a while so if these are needs that we are seeing and knew about it why wasn't it in the original language?

>> you are right, we do bond planning well in advance and we-when we updated the capital plan and it came before you last april, we had cont plated a different bond or slightly different bond. i think the lion share of what we are talking about remained consistent with what woe talked about last april. the adjustments really i think are reflective of some of the different concerns that we had about what was in the bond and what was happening in the city at this time right now instead of saying the landscape changed to some extent and there is other high priority precing issues and needs we wanted to have addressed, at the same time there was a feeling from the capital planning committee and other folks that the key project that was coming out of

the bond, the animal shelter could be funded using other source squz that is a appropriate way to keep that project moving forward. it was very clear at the capital planning committee that the intent isn't to adjust the schedule to complete the animal shelter project. in a sense we are able to still live up and do all the projects that were contained in the bond before it was amended. >> and i certainly agree we need to keep the animal care control center on track. i just made a viz further the first time. i guess it was last week or a week ago and it certainly needs to be dealt with, it is inadequate for what we are trying to do for animals. my question maybe isn't for you

but again, i would have been happy to support the animal care and control shelter to be part the bond, but-and i see this is a alternative way to maybe fund it, so the question becomes, how much more will this cost the city by using the [inaudible] mechanism? >> i can answer that but happy to have director of finance to answer that. she is the more definitive voice then me >> good morning [inaudible] public finance. by shifting from general obligation bond to certificate of obligation this has a slightly lower rating [inaudible] double rate. as a result there is a [inaudible]

that we assumed to be about 50 points and as a result the cost of financing the transaction is slightly higher. >> slightly higher can mean a lot of things can you give me a number? >> if i use interest rate assumption we use for the capital plan for general obligation bond we use 6 percent for [inaudible] about $40,000,000 in the life of the transaction. >> $40,000,000? >> correct. because we are required by law-the general obligation bonds [inaudible] because we have the ability to levy taxes to pay for general obligation bonds the investors do not require reserve funds for certificate

of participation because of the way it is structured we have to fund capitalized interest and reserved fund and those go toward paying for the [inaudible] it is $95,000,000 over 20 year life the bond and cop over 23 years it is $131,000,000. this is really-it makes it very difficult. i would like to support the animal care and control center, but to pay $40,000,000 more is something that i have to think about in terms of the trade off >> to add on to that, the capital program assumes some programs are funded under [inaudible] some under general obligation bonds. [inaudible] general obligation bond is 2.55

percent. if it goes to market today for the same [inaudible] general fund program versus the [inaudible] might be lower but because this is a planning document we assume a 50 point differential. we have to keep in mind we have limitations on the [inaudible] and the city making a choice on what kind of money to use to fund a program and it is something we are commitmented to do within the 10 year capital plan we are substituted a different funding source to meet that need. >> thank you. >> supervisor tang >> thank you. i think this question may go to brian strong but adding on to supervisor yees question in terms of the projects flocked out. can you tell us about the level of analysis that went into the producted added

in? it is a lengthy process and there are projects on deck so want to make sure there was the level of analysis done. >> sure. again, i know there may be department folks that can step up and help if i don't cover everything. i can certainly say the community health center, these are not-they may be new to the bond but these are not new ideas or new needs so they have been talking for some time about trying to create a more comprehensive family oriented services at the center. we have seen budget requests come to us to-and maybe in a more piece meal fashion. we have a lot of confidence in the

projects being put forth under that program. the same as i said gowise the fire station programs. those tr things that have cont plated for some time. we have-because the earthquake safety bond and the other work we have been doing we have a lot of detailed information of the needs the fire stations and so those-both of those projects while they may not have individual ceqa review there is a lot of discussion and vetting of where the funds would go and how they will be used. the homeless site is a little more new project. all is a lot of discussion about changes to the way the city dealwise homeless services as discussion about a new department and so forth. we do have good information on the shelters. we

track the condition of our facilities across the city that is part of through the capital plan updates that we do every 2 years but what we did every year and update the facility assessment every year so we have good information on the needs of those shelters. the city owned shelter. i think there will be more discussion about some of the more transformative programs that mr. daud rr spoke about and that would again not be dissimilar from what we have done in geo bond but we know there a large need and expect to be able to reserve the funds and will go through a community process to yif or fully discuss what exactly the new homeless service sites would look like.

>> i think for me today really and i want to make more comments today in case i can't make the special meeting we have to have to entertain the amendments, but for me i think that all of the projects are contained with the bond whether original or the version we have before us now, i think they are addressing needs we have in the city. for me, the hard ache i have really has to do with the process with how the capital plan is normally put together and it is a very lengthy process that involves a lot of meetings and community input and all of a sudden at the last minute there were several projucts swapped in exchange for the animal care shelter. i care about that building and fell off a bond previously and even though it will cost more under the cop program it is something i push for very strongly and glad we

find a alternative solution. for me again i think all of the projects are worthy of moving forward, i just do not like we come in at the last minute and change up what is contained in the capital plan. it is really out of complete respect for the capital planning team that i say this because you work very hard to put this together. there is a lot of detailed analysis that goes into this and we have a lot of people here today that are very supportive because your projects in here but also need to look out for the department said that may not be here whether it is this time or in the future have projects that fall off of this preparing to have it part the capital plan. my message is i hope moving forward we can stick to the process we have in place making sure it -there are not the last minute changes

again and so-but i want to reiterate i think all these projects are valuable and necessary for san francisco. >> okay, thank you supervisor tang. if no other comments let me suggest-i think we are working on language with the amendments so why don't we defer on this until later in the meeting and proceed from here. thank you for everyone who came out to public comment. could you call item 3, please >> item 3, ordinance reto actively authorizing the dparmtf otechnology and contract administration to enter in the 3rd amendment of the city and at&t corporation [inaudible] additional 5 years increase the total not to exceed amount to plxly 122,000,000. >> [inaudible] here to speak on this item >> thank you very much. leo

lev [inaudible] we discussed the item last week so wasn't prepared to make new rork remarks and happy to answer questions >> if no questions why don't we go to mr. rose's report >> mr. chairman we did testify in the last week and recommend you accept the recommendation and recommend you approve the ordinance >> any further questions on item 3? move to public comment. anyone wish to comment? seeing none public comment is closed. >> make the motion to send forward the ordinance >> motion by supervisor tang and second by yee. item 4 >> resolution reto anthively authorizing the police department to anticipate the amount of 77,000 from state of california department of parks and rec division of boating and

water ways for the period of october 1, 2015 through september 30, 2030 >> we [inaudible] our police department to speak on this item. >> good moning, patrick young and grant manager for san francisco police department. we request approval of the accept and expend resolution for a grant we received from the kait of california department of parks and recreation. the grant will be used for the purchase of search and rescue equipment for the marine unit. specifically i do have a list of items we will be purchasing. the grant will pay for sonar equipment. at times the water in the bay can have a lot of sediment and in conditions of

low visibility the purchase of this equipment would help our marine unit improve the search and rescue operations. with that, i'm happy to answer any questions you might have. >> thank you very much. colleagues, any questions? we have no bla report so move to public comment. anyone wish to comment on item 4? seeing none comment closed >> i move this with a positive recommendation, >> motion by supervisor yee and take that without objection. clerk can you call item 5 >> item 5, ordinance a-minding the admin istrative code to require the department of technology gather [inaudible] fiber optic facilities. >> thank you. we'll take thits before we go back to 1 and 2. colleagues in san francisco we continue to be the tech knowledge invasion capital of the worlds and know the importance

of a internet conductivity. it a new brainer and has become a utility like water and power and should be viewed as such. as part of our ongoes discussions with the city government and as it relate would the residents we look at last year and how the budget analyst look at what we owned enthe city in cataloging assets so we had the bla do a survey with city departments and this report was relaced before winter recess and found responsibility is dispersed within many departments and we basically don't have a sprlized function of mapping and understanding what we have cross the city government departments. they made two recommendations to consider developing legislation to consolidate and standardize data regarding our network and include provisions that all

network [inaudible] publicly available and kept up to date. i have a small tweak i will mention to everyone. it will do two things require the city to map and catalog what we own in terms of our city's fiber optic capability and conduit under ground which is good house keeping, as well as make sure and i'll read the tweak in the language in terms of fuch were expaengz of city owned fiber optic facilities the puc will consider to improve efforts to develop a city wide fiber optic network. if that came that would be quite a way down the road but think it is important we view internet as utility. the fcc reclassified as utility and time to talk about that as such in san francisco and look

forward to if not leadsing being part the conversation going forwards. i have that small amendment to introduce but unless you have comments or questions i turn it over to the budget analyst. mr. rose. >> mr. chairman and members the committee, on page 18 of our report we report that according to the apartment of technology the total cost would be 498, 854 in the first year and 393, 854 ongoing annual cost shown on tabe one of 19 of the report. then on page 19 we state dt has reports it has funding in the currents budget to cover

the cost to comply through 15-16 additional money may be need frd ongoing basis. [inaudible] budget will be evaluated by the bejt and legislative analyst office. we recommend you approve this legislation. >> okay, thank you mr. rose. any questions on this item? move to public comment. anybody wish to comment on -you are welcome to speak on it. >> thank you. migel [inaudible] city cio department held department of technology. i want to thank you supervisor farrell the committee, harvey rose's aufsh for taking this matter on. as most know i talk about conductivity and the importance so it is very encourageing to see such attention paid to it. i appreciate all the work from harvey rose's

office and agree with things stated in the report, i just want to add some additional information about what is going on dt. to add details to the intent to use our current funding to kind of help move this forward. we do have a system that we use for the dt delivered fiber to manage inventory that so the point is we do have some things in place that will help to move this thing forward which i believe to be congruent with everyones intent to this going. also looking forward to work wg the puc as actively and urgently as is appropriate to help facilitate the long term and detailed discussions. i just want to thank and acknowledge all the thought going into something that we at dt find to be extremely important to the city

beyond just the technology. >> thank you mr. [inaudible] and thank you to your department and your efforts on this and look forward working on it. anyone wish to comment on item 5? seeing none, public comment is closed. colleagues the small amendment i like to entertain a motion to accept the amendment and move the amendment >> motion by supervisor yee and second by supervisor tang and take that without objection. we are back to items 1 and 2. deputy city attorney >> john gibner. just to get everyone on the same page, the clerk of the committee is handing out corrected versions incorporating the amendment mr. strong mentioned as well otthe amendment suggested by the budget analyst. we will be submitting-the version before you isn't signed and will submit a signed copy to

the clerk along with the electronic version later today two minor things not in the version before you on page 10, line 10 and page 11, line 10 to 11. the ordinance incorporates documents by reference and to the clerks file we will be removing those incorporations by reference. just for technical reasons in the final version that we give to the clerk today but take that as part the amendment as the whole before you, vote on it and pass to the next >> we'll take the amendment as a whole then? okay. colleagues any questions, staff, city attorney? okay. so, with that, colleagues what i'd like to do is entertain a motion to accept this amendment of the whole and then continue it to a special budget

finance committee meeting for monday, next monday which would be monday february the 8th. so, colleagues unless questions or comments i love to entertain the motion >> motion by supervisor tang and take that without objection. okay. thank you very much. we are done with that. madam clerk if you can call item 6. >> supervisor farrell [inaudible] item number 1 was a resolution, it was approved-and also continued to the february 8th meeting? >> yes for clarification. do you need a motion on our behalf >> make a motion on item 1 continuing the resolution to february 8 >> we take that without objection. okay, madam clerk item 6

>> item 6,hering to receive budget updaitd said from the mayor, controller and budget and legislative analyst including the balance shortfall strength and additional revenues. >> good morning supervisor, michele [inaudible] controller office and joined by kate howard and we are presenting our most recent projegzs on the cities financial status that were issued in december and this is a joint report prepared by the controllers office, mayors office and budget analyst. the shared projection of revenue and expenditures for the next 4 years. the mayors office issued budget instructions and mrs. howard will speak to those. to provide context about why we provide this report and why we prepare the projections

it isficial planning that came out of prop a. they [inaudible] and & do more long term financial planning. it says due to the budgeting do long term financial planning including a 5iar plan and 10 year capital plan and gives the controller authority to proposal financials to the board of supervisor for your consideration which we have done to strengthen reserves and codify debt policies and [inaudible] that is the context why we do this report. on the report itself you probably are familiar with it. it says what happen toozory budget if we do continue doing in the next 4 years what we are doing today in terms of service level with the number of employees we have. the

assume the exnomic ecpansion we rin continues. we dont try to say a recession will happen at a particular time but i'll talk more about that because that is a important thing to think about. we assume negotiateated wage increases and inflation of 2 and a half percent beyond what is negotiated with unions rchlt and budget or planned level for non salary items like capital equipment and it. this is a summary table from the report. i'll try to high level walk through the numbers. you notice that revenue increase. that is the first bolded row, 75 million up to 164 million. that is us projecting continued growth in the property taxes, the business taxes and our other sources of general fund revenue of the cumulative 10 percent. the next bolded row is you see the projection of expenditures are greater than the projected

growth and revenue, about 20 percent. the cumulative effect of the changes is short fall in the budget year under 100 million dollars increasing to 53 ailth million in the final year of the plan. this sh the first time since they prepared the 5 year financial plans the final year of the plan has a higher projected deficit then the previous projections, so this feels like a turning point for us. and i want to spend time talking about the biggest drivers of the change because it is significant. what i didn't mention about the previous slide our prior projections from just a few months ago manch 2015 we are showing a larger short fall, but 33 million in the first year and growing in the out year jz that is a significant amount of

change in a short period of time so i want to explain why that is. it is really a couple of things that are driving it more than others. the most significant and increases to employer pension contribution and as well as voter approved spending requirements. to talk a little about retirement rates, this line shows what we thought employer contribution rates to the pension system would look like when we wrote the report in march last year. we really thought that the peak year of pension contribution for the employer is 14/15 and after that the city would enjoy a long flow of sustained decline in rates. and threason we projected is two things. we fully absorbed all the losses from the global financial crisis

in 2008 and the second we enjoy the fruits of proposition c in 2011 which was a joint effort by labejure the city to address the pension concerns by having employees contribute more to their pension squz also trying to curb expenses as well. for a few reasons that we are not enjoying that decline we thought we would. the first is recognizing the pension system, the rate of run on investment is 4 percent not the expected [inaudible] that is the first line on the bottom. it isn't great news but through december the pension system had a loss of 1.3 percent so the city will have to make up whatever that difference is between the exsected earnings of 7 and

a half and the actual earnings we have to make that up. the second thing that happened is the city lost a legal challenge to the provisions with prop c that had to do when retireees can get [inaudible] the final thing and also significantly is that the pension system periodically updates gets assumptions about mortality rates which all pension systems do and the good news is our retireees are living longer and the effect to the city is we have to pay for refireees drawing benefits from the system longer than projected. many systems are dealing with the same issue. that is also increasing our cost. i mentioned there is the

second biggest driver is spending requirements and mandates adopted by voters. most significantly in 2014 to fund transit, childrens services and also to increase minimum wage in the city, the city will have to bare the cost itself as a employer. just a high level look at revenues. i wont go into a lot of detail but we project strong growth in the tax revenues and this incorporates the strong performance we had in the last fiscal year so we are showing where we ended up with property tax with business tax and everything as a higher base for growth in the future. we do assume rates of growth

and tax [inaudible] low in the last 2 years of the projection. i would also note that we incorporated in the fund balance assumption numbers all the good news we s got from your end so 36 million dollars. [inaudible] that number will be updated next week in the 6 month report. i will ask mrs. howard to talk about the expenditure side. >> thank you. so, i'll talk briefly about some of the expenditure trends we see incorporated in the projections and update to the 5 year financial plan. as mrs. allers mentioned, we continue to make-as our revenues grow in

the city we continue to make new investments in our baseline funding requirements like the mta baseline, children fund, rec and park and libraries. we also are seeing increase salary and benefit cost as we spoke about earlier in the presentation, the number you see here reflects all known cost increases and assumptions about what happens in future years so we assume [inaudible] 5 percent increase in health rates, those sorts of things. our city wide operating budget cost largely include adopted plan funding levels, so the capital plan, general fund funding level, the coit recommended funding levels as well as other known

cost increase such as minimum wage which over the next sev eral years grow by more than 10 million dollars a year. departmental cost include a number of smaller items, but largely related to our public safety hiring plans, opening of san francisco general hospital as well as the furnishing, fixtures and equipment associate would the health departments capital projects in particular. as always, these numbers are a projection so there are things that can effect the outlook. as you know, we will negotiate in the current year we have open labor contractwise the nurses, next year we will negotiate with all of the miscellaneous

employees so that includes sciu, local 21 [inaudible] and others and the subsequent year we negotiate with public safety unions, police and fire. to the degree that our-those negotiations ends up in a different place they can cost the city more or reducing the cost. to the degree that the mayor and board make new budgetary commitments through the budget process this year, that would effect the outlook. any changes to state our federal funding can also have a impact hire. here. at the moment we are having a first look at the governors proposed budget and happy to update the committee in the next couple weeks or at a time that makes sense to

you. and two other pieces, to the degree there are any departments over spend their budgets or any supplemental appropriations are moved through had board and adopted, those would effect the outlook. finally, the biggest thing and the thing that i know is on my mind and the controllers office minds is change of the economy and how that effects our overall outlook. as we have done in the last i think two or maybe just one. as we have done in the past we included a recession scenario in the financial forcast and michele will talk about that. >> thanks. i mentioned before we are very aware of where we are and in the report we would never project when a recession starts we are cognisant that what goes up will come down and so we

kind of looked-what the chort is showing is the length in months of economic expansion for the past many years and the top bar is the economic expansion that we are currently in. you can see it is already 78 month in length and should the projection in the report actually come true, the expansion will last to the end of the outlined bar, so making it longer than any economic expansion we measured in the past sench century so that is something to be cognisant of and nords to deal with the risk which we think is important we prepared a recession scenario. this chart what it is showing is the loss of revenue

we project if there is a recession that began in the third year the report. what we are doing is if we experience the percent of revenue loss on average between what happen in the dot com boom and financial crisis we lost x percent of hotel tax and sales tax and business tax if we look at those subset of revenues and average our recent experience we estimate we would luss $682,000,000 in revenue. that is offset because the baseline commitments come down with revenue. we also project we would draw on reserves we have built up over the past few years, so we assume we draw the maximum amount we can draw from those reserves. we also assume in the last year

the plan employer pension contributions would go up because the pension system maybe not to the degree they did in 2008 but it would have losses to about $70,000,000. the net effect of all these things is in the next to last year thooch plan increase deficit by 120 million and the final years 320 million. that is beyond the capacity of reserves to absorb, we have taken what we can from them. that is something to be aware of because the timing is not known to anyone, but we want to be thinking about when it hapens the magnitude we are facing. >> moving back too what we know rather than the unknown, as you know, we projected through this report

budget shortfalls over the next 2 years of 99, all most 100 million dollars in the first year growing to 240 million in the second year. as a rument the mayors office issued budget instructions to departments early december requesting that all general fund departments reduce their general fund support by 1 and a half percent. what that means is about 25 million dollars from departments and the that they propose additional on going reduction or revenue enhancement of another 1 and a half percent in the second year. that is really to -those instructions were sized to align with the increases in the pension cost that are known at this time which are about 1 and a half percent and 3 percent or equivalent to 1 and a half

percent and 3 percent. for the enterprise departments or self [inaudible] the instructions is they absorb all known cost increases. in addition the mayor asked all department tooz propose to [inaudible] 5 year strategic plan so the expectation is those strategic plans in any budget initiative or changes will align with those plans that departments are proposing. in addition the instructions directed department s to focus on continuing to develop a modern government so looking at initiatives to promote public trust and civic engagement, improve the public experience of city services such as business license port lal. improve performance and accountability of

initiatives that departments invest in and finally, insure employees have the tools they need to do best work. we discourage departments from proposing idea said that impact direct service to the public and finally looking for examples of cross departmental collaboration and any budget proposals that come forward. as you know, we have a calendar that will be familiar to you. the mayors office issued budget instructions in december in early january the governor issued his budget proposal. the next update toory current financial outlook will happen in february, probably in the next week or so. the controllers office will are elease the 6 month report which

givers the mayors office and the board a update on current year financial outlook both on the revenue side and the expenditure side. departments will submit budgets to the mayors office by the enof end of february and in march you will see a joint report update, a revised budgetary outlook for our office, the controllers office and the boards budget analyst. finally, or expectation is we bring forward a group of departments in may as we have done in the past for may budget hearings, typically the enterprise department and remaind orthf general fund move frgward in june on june 1. at which point the budget will be in your hands. michele and i happy to answer questions about the outlook or

instructions or timeline >> thank you very much mrs. howard [inaudible] i don't have questions. thank you for putting this together. i think it is critically important we have this. i would consider this is a sobering point of view as we head into budget season. i want to request with the other two members the budget committee so supervisor wiener and kim now, if you do best efforts to run through this with them as well and many of my other colleagues you can touch i think it is helpful we get on the same page as much as possible >> we'll make sure between the controllers office and our office we make sure all the members the board have a chance to hear the update as well a update on the 6 month and joint report. >> thank you. colleagues any questions? comments? okay. we will open to public comment. anybody wish to comment on item number 6? seeing

none, public comment is closed. i think what i like to do is continue the item to the call of the chair so we have fwujt updates as we get closer to budget season. motion to continue this item to the call the chair? >> motion by supervisor tang and take it without objection. madam clerk item 7 >> resolution adopted a fixed 2 year budgetary cycle for multiple city department said for fy 16, 17 and 17-18 >> this is something that the mayor introduced and know supervisor tang and i were involved in this. the just in the beginning was a initial effort to expand the departments go into 2 you budgeting. i think in hindsight that was-we need to sponed more time discussing with my colleagues any

potential expansion. it was very much meant from a expediency perspective and [inaudible] save them time and they own staff time not to go through the board process but to be able to do more strategic plan frg their own departments. i don't think the time is right this year to go forward with that. we may have do this on the fly. i would like to amend this down just to contain the two year-make the departments that are on a two year cycle consistent with how we have done that in the past few years, so no change from last year. my colleagues we will not go forward with expansion the departments but maintain what we have done over the past few years. only able to consolidate maybe

[inaudible] you can help identify those and accept those amendments. >> thank you. the following departments would remain on a fixed 2 year cycle is the airport, child support service, employee retirement system, the port, public library, public utilities commission and not included in the resolution the mta. >> thank you very much. just to confirm that was consistent with what was in place last year and the year before? >> yes. >> thank you very much. supervisor tang. >> thank you. you know i think that aside from this helping out the department said that generally we dont hear, i think really my goal and why i cosponsored this is i really felt that spending that time tew low departments to do more strategic plan, doing a deeper dive into the budgets

and providing more certainty for not only the departments that contract with thederment pas i thought would be helpful but if the time isn't right i suppose we will go back to doing what we were doing. i didn't see this as us yieldsing our budget authority what so ever. just as a reminder we have the opportunity to open up items or department budgets and dive deep into department budgets regardless so wanted to respond to that because i know that is a concern brought up with this legislation. >> okay, thank you supervisor tang. supervisor yee. >> i want to thank chair farrell for understanding this is probably not a good time for this and so i agree with you and the concerns i had mainly because i wasn't part the