>> city of san francisco >> >> good afternoon, everyone, thank you for joining us today. this is the regular meeting for the budget and finance committee. my name is supervisor malia cohen:. to my left is >>supervisor katy tang: and >>supervisor jane kim: and we'll be joined by supervisor yee.

>> ms. wong, any comments? >> yes, please silence all of your electronic devices. item no. 1. >> hearing on the proposed 5-year financial plan and the mayor's office to report. >> supervisor malia cohen: we'll be hearing from the mayor's office and the legislative analyst report. with that, i would like to turn to the mayor's budget office to kickoff the hearing. thank you. >> sf govtv please turn the mic on. >> thank you members of the budget and finance committee. i'm the budget director and we have the controllers office. and dan from the budget and

legislative analyst office and all three of us are available to take any questions that you may have on this presentation. as you all know, we put out the 5-year financial plan in december, the draft and now we are writing an update to that report. and, we actually just presented a few weeks ago the report from this december. we have a little update for you today. this presentation will cover the march report update, specifically the deficit projection, the drivers. risks, recession scenario and federal and state funding and end our presentation with a note about our upcoming budget and the budget office. this is an update from the fall report. all three financial offices, the mayor's office, board of supervisors and controller get together and put together these numbers and they stand for projections.

if we make no policies changes and we project them forward with reasonable financial sound for inflation, what would our revenue and expenditures be and our deficits and surpluses. our report is projecting deficits. we'll explain why. the budget that we will be balancing and submitting to you all on june 1st, the deficits have gone down and in the 3 years they have gone up slightly and we'll go into why that is because that is something we are paying close attention to. the cumulative define assist is not 288. this deficit assumes the midyear rebalancing plan as well as changes to the free city college program and the public defenders office that we have discussed with the board of supervisors. there are no loses from the state or federal government assumed here. and as a reminder from the

federal select committee, 20% of the city's revenues are from state and federal sources. we think there is too much uncertainty at this time to make any clear conclusions on what type of funding might be lost and we will continue to work with the federal committee on that. here is a table showing the very high level numbers which i'm going to spend a couple minutes on. the first line shows you revenue projected from the current year 16-17 budget through fiscal year 21-22. we are showing projecting growth $541 million from where our budget is today and this is all general fund revenues. on the expenditure side, expenditures will go up by $1.4 billion. >> i'm sorry, one more time and a little bit slower. going back, baseline reserve is that

fiscal year is 54.1. >> yes, let me go through each. the high level is the sources and the uses line. the sources line is showing you a positive number is good, a positive number of growing revenue, a negative number is parenthesis is bad. if you take all the uses together that would get you to 144.847. if you add that $1.4 billion in expenditure growth to the positive 100 million revenue growth that would give you the projective growth. these are cumulative numbers. this is assuming that all cost grow in cumulative way so, for example in salaries and benefits that city employees have a cost increase or wage increase every year at the cost of either a negotiated contractor inflation. that

negotiate contract is 2 years with the extension that you heard about which is about 3% in each year and out years we assume inflation. one of the years is inflation is projected to increase.. that's one change. and then for your question on baseline and reserves, this is for 15-16 to $100 million today about 15% of expenditure growth of projected $1.4 billion. salary is expected to grow $1.2 million. citywide cost is projected to grow by $450 million. and departmental cost about $52 million. >> any questions on any of that? >> no. thank you. >> just a note now on what are the big highlights are this compared to december. the most important

thing is we started with a projected deficit for the upcoming 2 years about $402 million. then the 6-month report came out one time savings in departmental and revenues about $54 million. that brought up our updated projected shortfall to 48. this brings it down by 60 million. the biggest things are one time revenue on the fund balance and the capital draft when we put out this report and we didn't know what the debt schedule would be and the new debt schedule on the capital plan put back specifically the jail replacement project. instead of hitting the next 2 years for that project, it's now been pushed out and put on hold as the city

figures out what are the next steps on that project. that means basically the next 2 years there is less cost depending on whether or not the city moves forward would be out on the out years. that is one big change on the first 2 years. we also thought it was important to call out your five because your financial offices are very concerned about the long-term structural picture. it went down in the fifth year and the same amount in the first two. a large part because of some debt service cost are pushed out and a lot are one time thing. one time fund balance, one time savings and things that help us right now but are not on going. that's part of what's going on here and in the out years, some of our cost went up with inflation projected to be about 3% in the out years and now projected to be close to

3.5% in the out years. also because of the uncertainty in the affordable care act, the house is telling us because of the percent in growth for 7% for retirees, we should project 8% for active and 9% for retirees. we are projecting a significant increase around employees for their healthcare benefits. those are the things that push the out years number up even though the next two budget years went down. any questions on any of that? >> no. >> i'm going to hand it over to michelle. >> good afternoon, michelle, controllers office. so this is a 5-year financial plan that we have produced. and this table is just showing you that in the year that that plan was produced, that the tale year of the projection, the deficits have been coming down and in our most

recent report which is the darker green bar our deficit projection has increased for a number of reasons. the first is where we are in the economic cycle. we kind of reached a period of slow growth of plateauing slow growth and we are seeing decline in some of our revenues such as parking tax, sales tax is quite flat, etc. so that's the thing on the revenue side. at the same time, health and pension cost are growing much more than rapid inflation. instead of increasing interest rates, a lot of macro economic reasons for that. another reason that i will get to in a second as well is the growth

in spending a voter mandated through baseline and set aside through ballot and approved by voters that constrain future choices and increase our cost. as mentioned a use of one time fund balance not available in subsequent years. so, i think this chart is worth spending a little bit of time on. what we are trying to show here is the thin black line at the top of the chart at the nominal value of projected revenue growth. an we are saying, let's look at the things that are soaking up that revenue growth because we are not projecting a recession because we don't do that and we wouldn't do that. but we do project modest revenue growth and there is a couple of large cost types that are absorbing most of that growth in revenue. the dark shaded area at the

bottom, those are cost increases that are the result of voter approved measures. the value of those, by the fifth year of the projection taking up about 45% of the revenue growth. the next sort of the middle blue section is growth in employee benefit cost. so pension and health especially health increasing several times at the rate of inflation, not only for current employees but retirees as well. the portion of that left over for any other type of expense includes employees or cbo colas or investments in technology or other things the board might choose, new programs or expanded services. the amount of revenue growth available beyond that is that very light blue section. it's very limited, about 9% of the

growth, but that fifth year is available for all other uses aside from these two kind. and i did mention that our report, we don't predict a recession because nobody can. it's not something any economist would do even. i think we've shown this chart before. what it says if we look at whenever -- where we are in the economic cycle, are we going to get out of the 5-year period without a recession. we don't think that's really likely if we look at the past 100 years of history. each one these blue bars is the economic recovery. we started in june 2009. it's actually a little bit longer because this chart is maybe about 5 months old. what it's showing is we have already passed the

average. if we don't have a recession in this time period, it would be the longest recovery that we've measured and the question is whether you think it's likely or not. but nobody can time it, but our experience says we should be cautious but nobody can predict it with certainty. so, to give a framework for what that could mean, we looked at, we did a recession scenario where if we did have a recession to begin at the end of the fiscal year and the loses in revenue were similar to the loses in the last two recessions if

the rates have declined like the last two just for economic, that we would estimate a revenue shortfall about $960 million. the city has taken steps is to build the economic stabilization to help -- cushion this. as there is a lot of uncertainty at this time especially with the federal proposals and we discussed last week at the committee of how little detail there is available.

really in the president's skinny budget is what we can attach a number to is the limitation of cdbg home grants which is about $21 million to the city if they come true. and we'll have more information in may when his updated budget is proposed and of course that will go through congress and be approved back to refer possibly although they don't have a very timely process often. we do know a little bit more about state proposals and we talked about this at our morning hearing this morning. the governor proposed in this january budget the elimination of issf maintenance effort which next year will be worth about $40 million and probably 60 in this period. county is in negotiations with the governor about this and we'll have more information about what agreement can be reached around may 10

when the may revise comes out and it's something that county has been working on very diligently with the governor's office and a voting on ab 1, a proposal increase for taxes to pay for resurfacing and for transit projects. right now the city pays for a lot of it's road resurfacing and san francisco is subsidized by the general fund and will be by $21 million and 20-30 for transit projects as well. that will be a great resource for the city if it were to pass. our next update will be probably around may 9 or 10. we'll be looking at the current year

revenues and expenditures and updating those for you. after that we'll be doing budget balancing with the mayor's office. >> thanks michelle. just to end the presentation with this last slide for contact with the upcoming budget. we are waiting for the controllers report because that is the last big piece for us around balance to tell us if there is any additional savings from current revenue or departmental savings that will augment our balance further. that will be in early may. we are waiting for that and i want you to know some of the bigger picture things we are talking about. several weeks with the mayor we are having meetings around the budget and we are reviewing and many of the departments did meet our target reduction of 3%. we are reviewing all

of those. we are definitely preferring or giving preference to things that are relevant solutions, efficient proposals, we don't want this to be a reduction year and working hard with the departments. some departments also submitted lots of request for new things and we are working on those. the big thing we need to focus on this year is this larger uncertainty in mind is we are in a very weird point right now. we don't want people to be unnecessarily worried or panic but there is so much uncertainty with state and federal and particularly in our own economy. we are starting to see signs of slowing, not a recession, not seeing anything terrible on the horizon but a very odd point in time. what we are thinking at this point in budget are several things because the

situation is uncertain with the federal government and whether we need more reserves as a result of that. when chair cohen asked about the ihhs and the city had a reserve years ago. we need to talk about meeting a lot of our fund investments with capital and technology. this is a very different fiscal picture. we can lower that without reduction. and also all of those things when you spend the money, they save in the long-term. trying to prioritize those. as i said to you all before, we've grown a lot in the last 5 years in the f te's and to the budget, but we are really mindful of where we might be for now. and any new investments that we are going to be seeing in

this budget is very small and not huge because we want to be careful of starting anything new this year and also ask departments not to submit any fte requests to us. right now the mayor is concerned about affordable housing and homeless. and that's kind of the preview for june 1st. of i will come back to you once the budget has been submitted with all the details included in the budget. if you have any questions, please let me know. >> thank you very much for the sobering reality. let me check with my colleagues to see if there is any questions. supervisor tang? >>supervisor katy tang: thank you, going back to slide four, the summary of the increase over 5 years with salary and benefits and the the cola adjustments for the next 4

years. does this assume there is no fte growth over this period? >> it does. >> okay, i have spent a lot of time thinking about base lines and reserves and how that has pretty much tied our hands this terms of future budgets and salary and benefits and it's percentage of growth. it's just so much more, 51% growth over the 5-year period. so, i know it's always hard to talk about cutting staff or not growing staff as well, not increasing fte's, and we don't have to get into a full conversation here but at the next hearing, it's important for us to have a deeper discussion around what we might want to see around fte reform and so forth. >> it's a good plan. the fte's are what's driving up this cost of inflation. that's a

good report. >> thank you, supervisor yee? >>supervisor norman yee: thank you for the presentation. when you talk about not increasing the fte, one program comes in mind where it's the maintenance of the trees. so, i mean, what we want to do, we need to increase the fte's, this seems to be a contradiction. >> great question. when we say no new s te's, no new to the plan. you will see growth in the public works and homeless department to near the bound. yes, there definitely is going to be large e growth. >> thank you for the clarification. >> thank you. anyone else, colleagues? all right, thank you very much for your presentation. we'll see

you soon. any members of the public that would like to come up and speak on this item, please come on. welcome. public speaker: this process, good evening, supervisors, and a couple of you i haven't met before. let me cutoff my stuff here. i'm sorry. it's quite a pleasure to be here in the beginning of a process that i'm going to be here until my voice is heard. as you see i'm ace on the case, but i'm here as the czar about migration. but i'm also here to check on ed lee and the controllers and this budget. i hear you talking about this and what about the black folks, i hear about cuts here and all that, what about the black folks? i'm here to find out about ed lee and the controllers and where on the budget line does it mention anything about black, african american or negros? where in

the budget does it say there is going to be money set aside for the migration. that hasn't happened for 5 years. unless somebody do something this year, i'm going to protest against this budget to say neglect of african americans purposely. ch now, if ed lee doesn't want to do that, i'm traveling you can to sacramento first. and actually gave in, you know the institution that you put on migration? not a dime. we were in the $500 million deficit. we are in a big budget now. there is no money to spend on african american blacks. it's been hidden on under privileged people. but it's said on asians,

mexicans and migration. you spent millions of dollars protecting these people. i'm tired. whoever is watching and the mayor is watching. >> all right. thank you. okay. thank you. for the folks that are listening at home, today's purpose is a 5-year financial plan update. any other member of the public that would like to speak. seeing none, thank you. >> all right. may i have a motion, please? >> i will make a motion to continue this hearing to the call of the chair. >> second by supervisor kim. without objection it passes unanimously. all right, is there any other business before this body? >> there is no other business. >> thank you, this meeting is

adjourned. [ meeting is adjourned ] >> >>you.

>> (clapping.) >> thanks for coming i'm doug u doug the president of the mercy housing we're one the partners our privilege at the mercy housing to be part of this project is a vision of open houses weer that lucky to help them chief for those of you who don't know mercy housing we're a national nonprofit with headquarters in denver based in san francisco and working in the state of california a few of my board members if you wouldn't mind bill and joanne raise your hand they know anyway - >> i had a joke that didn't go off i'll come back to that i want to introduce karen who is new to the job at openhouse they're doing a fabulous job and

continue from here. >> thank you doug. >> (clapping.) >> what an amazing and incredible day thank you for being here. i'm the beyond honored and humble to represent openhouse what an amazing principle there are not enough things to capture the efforts of making this day happen i can talk about this you wouldn't thank everyone to thank so i will take a minute to see a couple of quick thank you's i want to say to doug and everyone as mercy housing you've been an amazing partner and continue to be an amazing partner when we break ground we like to say you're not just a partner but part of openhouse family thank you for being worked out with us here. >> (clapping.) >> i also want to say thank you

to the mayor's office of housing who are here today not easy to take on one of a kind project and you really helped us to balance ethics commission and a dream thinking about what it means to the city in the an easy job we appreciate it and continue to partner and figure it out going forward thank you for the openhouse board you're a fierce group of advocates for this agency and mission as we could ever ask for own house members current and past if you'll raise your hand if you're with us today. >> (clapping.) >> and, of course, none more compassionate than our founder marcie and janet an amazing - yeah. >> (clapping.) >> you had an amazing dream 20 years ago and bold not to give

up and make many a reality we're all living today so thank you i want to thank myopia house staff you're the backbone of what we do we're on a tight schedule but some clapping along the way they're the backbone of the organization your ideas are what fuel us your ideas fuel my inspiration and you to more than anyone understands that is an absolute honor you take that seriously to serve the lgbt seniors so thank you to my staff and finally and more importantly i want to thank our lgbt seniors this is your day for your bravery your tireless work and your believe in social justice that's why we're here. >> (clapping.) >> and please know this building is not the end this is the

beginning this is the beginning of work we'll do together because every lgbt elderly every urban design team o lgbt elderly deserves not only housing but in a lo place in the course call home we'll not be dysfunction until that happens. >> (clapping.) >> so thank you i now are the honor of introducing supervisor scott wiener i'll bring to the stage as for those of you who don't know scott was elected to the state senate in november of 2016 for district 11 prior to the election he served as a board of supervisors where he was an advocate for policies to create the affordable housing you see here today and long recognized the protection of the right of lgbt seniors a long time supporter and friend of openhouse and believes to help every lgbt senior to have a

place to call home in 2014 he helped pass local ordinances for action for long time care facilities and make sure they have training in taken care of felt be lgbt seniors and fight for the bill to happen across the state. >> thank you for your help and making today a reality senator wien wiener. >> (clapping.) >> good afternoon, everyone i think my head is blocking this thing the world was not made for at all people so i am i'm so happy to be here i'm so happy that you know given my new life between here and sacramento to be physically here

it is a monumental step forward for the lgbt community in san francisco we have our lgbt center a huge step forward we've done so much as a community and hard to overstate how significant today is i know that is the beginning we'll do so many more to house the lgbt seniors thank you, thank you to everyone who made this happen that was a massive group effort particularly openhouse and mercy housing is an honor to work with you on my time on the board of supervisors every few months new obstacle would come up and work together to resolve it thank you to mayor ed lee and his team for always cloub with us to find solutions you know we're really starting as a community to grapple with the unique needs of lgbt seniors for a long time a lot of people

are not making it to senior status. >> fortunately more and more people and this is amazing it is enriching for our community let's hear it for that. >> (clapping.) >> but we're behind in meeting the needs of of our elders and working hard to play catch up and housing is a key part protecting the seniors and long care and collecting data open our seniors meeting the needs of long term hiv survivors we've got a lot more work to do and we'll continue to work together to do that and housing is such a critical component of that problems for people in san francisco long term residents leave or just have incredible anxiety but being able to stay we need to make sure we're taking care of our own residents in particularly our long term residents you should be able to

stay in the town they helped to build i also just wanted to honor on a personal level say thank you to you'll be lgbt seniors i came of age as a gay man 17 year-old in 1987 in new jersey and he wouldn't be in the role i am today, if wouldn't have been possible without the for the generations of lgbt people who that fought to save our community to build our community in the 50's and psychos and 70's fighting under the work. >> (clapping.) >> and then in the 80s and 90s saving our community from the libyans from the aids of that epidemic and eternally grateful like me we are able to be who we

are because of you so thank you so much for that i also want to acknowledge i'm so honored to represent san francisco and northern san mateo county and sacramento honored to represent represent this great community and shout out to my mentor and predecessor senator mark leno who really led the way on so many things. >> (clapping.) >> so in the tradition of senator mark leno i have two civil rights to honor for mercy housing and openhouse we'll keep that tradition alive and well, thank you everyone and congratulations. >> okay with that, we have a distinct

hour of bringing up a bigger champion this project and all the things we're here we do woult the leadership and i hear he's back from a long trip we appreciate the work you're doing and thank you. >> all right. >> (clapping.) >> well, i'm not going to have skooltsz problem (laughter) but let me echo senator wiener's comments and also gto all the team of openhouse and mercy housing for putting this together representative from my office the community, the hard rock foundation and tom's leadership all of this putting together i just had the first tour not been on this property since it was still an extension

for uc and so when i walk those hallways that have been new i think that honors exactly what scott men's earlier about the history of the lgbt community and people with who served the city well in all from all walks of life and the center of what i talk about the strength of our city when is our diversities and i just also had the opportunity with the doctor and the managers here to actually walk into david and linda's living quarters as i walk through there the first emotion i felt was dignity that these units the way they've been designed and built the connection to space allows people in your 57b8gd years to

experience a dignity perhaps another level in years past and yet for our seniors in san francisco that is what we always wished to do and i think this is the best example right here at 55 laguna and benchly on 75 laguna i plan to be here not in 5 years in much less time for a be stronger even dedication for more units of housing for the seniors and in particular for the lgbt friendly campus that has been created here i just want to note scott was in my office but actually took some walks and talked about what we needed to do by way of strengthening the way we ought

reach the affordable housing developments throughout the city we can go through all parts of the city and talk about the problems that we have and with the homelessness and the lack of housing but we come here the laguna street 55 laguna and we see what it is like and the examples of how we present deciding if i had living for the seniors in particular for the lgbt friendly campus so i want to say congratulations to everyone who has been a part of this i commit to you that it will not take another 5 years for this site for smiling faces and people living in dignity we'll hurry up and get more not just here but throughout the city whenever people desire to

live dedicated place to so they can be part of communicated for all of their lives congratulations to everyone. >> (clapping.) >> my gosh you walk through those places and say blessed we're in san francisco and work for each other and have values weighing we'll care and learned a lot of those deciding if i did falls u values from the people that struggled for many, many years to reach the level of dignity those routine u units represent with that, let me introduce doctor the co-founder but marcie thank you, thank you for your vision 20 years ago i understand

that two 34g9s experts got together and nobody should get in the way when two lesbian health workers goat together. >> doctor marcie step forward thank you. >> (clapping.) >> you know i wrote it down i know i was going to completely overwhelm finding i want to say is this the most amazing day of my life to see all of you here celebrating what all of you have done to build this campus of services i just thank you, thank you from the bottom of my heart for hanging in those these two years to make that happen thank

you very much for being worked out here today. >> (clapping.) >> so allow me to read so i am not nervous you are lose any train of thought the miracle of openhouse to take a dream of thriving into our old age and making that a reality for all of us the openhouse vision wore 0 more brick-and-mortar but rather to create community that values the elderly and embraces long gift not as a burden but in some cases one hard to achieve on this miraculous journey many people have 2rbd to the success i reserve a thank you for the honorable art who certificate of occupancy be with us and nelson, and bradley hall al and robert, and sam david and

sandra hernandez. >> (clapping.) >> all those people have nurtured and significantly helped to implement this vision but today's slkts not complete without honoring the honorable senator mark leno it is my privilege to award a marking marching mark with an open house appreciation for his support of openhouse and dancing lgbt issues and in our city and state mark authorized the landmark legislation but mandates the california department of aging and local aging agencies including the lgbt community, planning and assessment of activities to create responsive programming and services to meet the needs

of lgbt elders marks landmark legislations guess is a model of lgbt outreach and inclusive deliveries for area agencies nation wide the foundation on which all lgbt elderly serving nonprofits has built and continues to build a safety net of services for the most vulnerable community members thank you, mark. >> (clapping.) >> mark leno is turned out out of california senate oh. >> oh. >> mark has authorized over one and 50 new bills that includes the lgbt elderly and the civil rights of all californians we

hope and expect his electrician to our city and community will continue for many years to come mark leno. >> (clapping.) >> you're good thank you all right. >> this is for all those plaques and things that mark has giving out over the 20 years i had to get another closet you can't throw them away >> (clapping.) >> too old jews thank you.

(laughter) it is a wonderful day and a real honor to be here with the mayor and our state senator and recognize the supervisors supervisor jeff sheehy and college board raphael and alex behind you thank you it takes a village and the village is here today, i'm, occur self-check - just today,d

out this new administration has in the dark of night taken lgbt questions off of the survey a national survey for the purposes of better understanding the

seniors need we need to respond in 90 days we need to let them know what they don't know so i'm here to recount a brief story i was in contact with marcie and janet 20 years ago to start this conversation about the growing need for the senior population in the community and coincidentally public office really fascinated the challenge over the year and resource to bring them together art called me mark you have a great issue as art would say you know the lgbt community is going to have needs for senior population in years ahead an idea he was mayor a >> now we need to do something

so i'm curious i've been talking to marcie and janet we brought everyone together and remember when the end of the year 2009 he was then the director of western even region of hud after the 2000 election we got to his office there were signs saying the republicans are coming the republicans are coming they're reaching out of their hud office as the mayor said you don't want to get in the way of two lesbian therapists but what do they know about building affordable housing art agnos you know that connection was able to allow marcie and janet to make their steps so i know you'll hear from tom in a second but do my only personal shout out thought foundation it is such a

foundation in the entire development thank you so much tom. >> (clapping.) >> so celebrate this at a a special one thank you, marcy and janet. >> (clapping.) >> thank you, mark as perfect introduction to the tremendous honor i have next which is to introduce you to tom before i do that i'll talk about him in case you do know him the publish of bay area and a leading gay rights activist as a businessman political activist and philanthropist he responded to the community leadership the bay reporter is the old continuing published newspaper serving the lgbt community and

in addition with a bar participated in the founding of the gay co-mix transform the gay community into a regional power when he was not busy with that he was the president of the director of public works for the golden gate park and the president the guide and the meals on wheels and the aids emergency fund in the ballet associations in 1996 established the barb ross in his passing they built his legacy strengthening did organizations to address urgent community needs in 2016 the bob ross foundation be pledged money in support of openhouse services in recognition of this gift he openhouse headquarters on laguna

have the names of bob ross and the lgbt center in recognition of life and work of bob ross. >> (clapping.) >> tom horn served as president evident bob ross foundation a retired attorney we're excited hear from you tom was a close friend the bob and a publisher of the bay area reporter it is my honor to now introduce you to tom and to pubically thank him and the bob ross foundation for the transformal justice for all. >> (clapping.) >> i promise my remarks will be shorlter than hers thank you for your organization for the times have made this happen and thank

you mercy housing that provided the nonprofit low income focus housing component without which this is not happening and thank you, mayor ed the former supervisors and senator wiener former san francisco supervisor and senator mark leno and the entire city family having stuck with the project from the beginning and never abandoned hope bob ross used to talk about the dream of having a enhanced and project where for older lgbt people could live in dignity and be who they were reject fully he didn't live to see the accomplishment of what you have done but he would be thrilled to know that thr