we look at quantity and quality and performance in those neighbourhoods as compared to the citywide average. and then by policy fund adjustments that we need to make to make the service provision more equitable. coming out of that process for this budget cycle, you can see highlighted in red on this chart, a number of service increases that we are making to serve those neighbourhoods. also with the additional train service, there is additional service coming in to the service plan to address existing crowding and demand issues. a pretty healthy investment in service. i made reference to fair changes to incentivize ridership. generally, our affairs index with inflation as well as all of our fees and fines, d's at sevet seven changes are deviations, mostly downward deviations or

new products. i won't go into them all, but they reflect a few different themes. one is transit fair projects that we think are overpriced based on declining usage such as the monthly pass and some of our visitor passport products. also, using greater fair differentials to incentivize people to move on to clipper, and union -- and many mobile. they proposed for a new adult a pass and this would be to target more infrequent writers but give them unlimited trips essentially for the cost of two rides. so these are things that we are doing to reconcile our affairs with a where we see demand is but also to incentivize more transit ridership. there is some risk in our budget, as well as the general

funds budget in the form of the potential repeal of senate bill one. the signatures for this measure for november have been submitted through the secretary of state. i think within the next week or so, they are expected to be certified and this would be a measure on the november ballot to repeal the gas tax, diesel tax and a vehicle fee, increase that was passed by the legislature and affiant -- signed by the governor last year. in terms of us in the city, it is about $50 million annually and formula funding. 27 million that goes into our operating budget, 23 million that goes to public works saving budget -- paving budget and another 10 million budget in state repair funds. and other categories of funding that we can compete for. that is a risk that we need to watch. there are other risks that we share with all the other departments. we have all of our labour

contracts, that are in place for the first fiscal year but to be negotiated beyond that. so uncertainty there as well as what ever might happen with the economy, we obviously receive a significant amount of money from the general fund. that the only downturn would directly impact us as well. in terms of the capital budget, at a very high level, it's about a 1.1 billion-dollar budget over the two years. you can see from this chart how it is allocated among the different categories. a lot of the funds that we get are tied to specific categories of expenditure. so we don't have full findability of these funds, but still a pretty robust capital program. you can see it is a fair bit lower from where we were two years ago and that is largely because of some large expenditures that were somewhat over the hump way that such as

central subway and our fleet replacement. the fleet program, for example,, we will have by the end of 2019, replaced just about the entire best fleet and as i mentioned, we will have expanded by about 40 % the light rail fleet. some project highlights in the transit side, you can see here. it is everything from the fleet facilities to what we call a state of good repair which is in the existing infrastructure where it can be safer and more reliable. these are things we really need to do. on the street side, i know an interest to many of you on the board, pretty significant investments in pedestrian safety, bike safety, traffic coning and traffic signals. all steps towards getting to vision zero. the capital investments being one part of our investments to

get to vision zero which is now not so far away. like on the operating side, there is risk to some of the revenue sources. on the capital side, these include the bridge toll increase which will be on the ballot in a few weeks which hundred $40 million will be dedicated and again, there are other competitive categories that we think the city would compete well four, we've also included the anticipation of revenues that were recommended by the transportation 2045 task force in our budget. one thing not noted on the slide is we also assumed cap and trade revenues, and recent route awards from the stage program provided significantly fewer revenues than we were anticipating. we submitted an application for 572 million. we are not anticipating getting that level of funding, but the

award of 27 million, relative to the 572 million-dolla $572 mills significantly less than we anticipated. so there are things that we will need to reshuffle within our capital program to address that change as we will shed -- as shred either of these not happen. that is a high-level summary. lots of slides and i'm happy to answer any questions that any of you may have a. >> chair cohen: great thank you. you are not expecting any revenue from the taxi medallions sales and the next coming two years. could you explain that? >> yeah, so the taxi medallion sales market has not been active in recent years, for some of the reasons that we refer to earlier in the conversation with the airport. we did recently release a report that we had commissioned to help us think about changes we might want to make in the taxi industry and i think you heard

me mention -- i think i heard you mention that we will call for a hearing and i would happy to be going to details about that. part of that will be working -- looking at how do we revise the medallion market, based on the revenues we are seeing currently, we are not counting on revenues coming from the taxi industry. >> chair cohen: all right, good. we will table that part of the discussion for the next maybe 30 or 40 days when the hearing get scheduled. i don't want to dive too much into the budget about the taxi medallions and the licensing program. colleagues, i don't know if there's any other questions for the director? pertaining to the budget? maybe transit capital priorities? supervisor fewer? >> supervisor fewer: thank you director reiskin for your report. i want to thank you for the memos scent to us dated may 15th, 2018 following up some of the questions that i actually presented to the board of directors about your budget.

so thank you very much. i just wanted to respond a little bit to the school crossing guard program, and i think that what i have an issue with, i think is that in order, your quote by your letters to say in order to address remaining qualifying schools, we are proposing to find an additional 20 positions. so i understand that, but from my understanding, is that difficulty is actually to recruit and retain these people into positions. is that correct? >> yes, thank you supervisor fewer. thank you for your feedback to our budget which, much of which we've been able to address the feedback. it was helpful and we heard from others with regard to crossing guards, as well. that's where, in the proposal, for an additional 20 positions, came from which would allow us to close the waiting list or the request list that is outstanding that we've not been able to

fill. has been challenging for us to recruit and hundred -- retain crossing guards, but there have been changes that we've made in recent years, in recent months that's helping us staff up those positions. we are confident working with other city departments and working through community-based organizations that we will be able to staff the additional positions that would bring us from 195 up to 215 funded crossing guard positions. >> supervisor fewer: i think you have heard that supervisor yee is working on employment for seniors who want to get back into the job market. i think you know there has been a proposal by the union that if these workers are working 20 hours a week, that you would probably be able to attract more people and actually retain them for a longer period of time. there are schools on that list that are in my district on the waitlist that i think are very dangerous intersections.

can you please respond to the issue of what slu has brought forward that perhaps, if we spent $2.2 million on this program, that we could actually have a workforce that could be relied upon, and also, we could encourage more people to enter into this -- these positions. in particular, seniors. >> yes, thank you again, through the chair, supervisor fewer, we did receive a request from the organization and we have a collective bargaining agreement and there is a process for managing changes to the contract during of the amendments he of that. our current contract goes through 2019. we are committed and i have commuted -- communicated with them that i will work with them with the process to consider changes to our collective

darkening agreement. the number of hours a crossing guards work as determined by the number of hours they are needed to perform their duties. those hours don't add up to 20 per week. us paying them for more hours than they are actually working, i don't think would be appropriate or responsible. we have been working to address through other means in terms of how we are reaching out to folks and would welcome the opportunity to partner with supervisor yee and his initiative for jobs for seniors to improve recruitment and retention so that we can fill those slots in a cost-effective and appropriate way. [please standby] departments un

the prop j provision, you s un contract out a lot -- a lot of jobs. you contract out to private companies more than any other enterprise, and so i am

wondering, have you a plan. and plan, prop j's provision in 1976 was under emergency circumstances, and i don't think we're in emergency circumstances now. so do you have a plan to incorporate these workers into our permanent workforce. >> yes. thank you. through the chair, we are not looking at any in-sourcing of the functions that we have outsourced. what we have been doing in recent years is working with the labor organizations that represent the workforces of these units and the contractors to provide -- to ensure that they're getting a prevailing wage and that it's an adequate wage, so we've worked particularly with the teamsters on several contracts, some of which they only recently organized and have gotten and

supported through our budget good wages for those workers. i heard your concern about the growth of fte's in our budget, so we're also trying to kind of manage for that. there's the direct service that we provide that is within and always has been within the core competency of the agency, that we do want to use permanent civil service employees for. there are these other elements that have always been contracts out that we propose to continue to do so. one of the biggest driver's of our cost that are rising faster than our revenues are our employee related costs particularly related to health and pension benefits. so we're trying to be responsible how we manage our resources, but we believe that the contracts that we do have provide a good, steady consistent jobs for the people who work them, whether there are employees or from a

contractor. >> director reiskin, correct me if i am wrong, but you're not suggesting any new prop j contracts. these are the same ones that you had two years ago, four years ago. this is not growing; this is just the status quo? >> that's correct. >> supervisor fewer: i think my question was whether or not we had a plan to incorporate some of these, for example. clear channel, could we be employing city employees under our civil service plan to do these jobs? many of these, after perusing the list, these are entry level jobs. also, when we talk about prevailing wage, that's one thing, but benefits, job security, those are the things that people need to be able to live here in san francisco. i have another overarching question. you don't have to answer it now, but i would love for you to consider a local hire policy

for everyone in the mta and see if you can reach some attainable goals because i believe we should be hiring san franciscans first, so thank you, mr. reiskin. i appreciate your response. >> supervisor cohen: supervisor sheehy? >> supervisor sheehy: again, on the crossing guards, are we sure that 20 will be enough? i know in my district, i walked with a mother at school drop off at fair oaks and 24 who had been run over with her five-year-old daughter. both of them had been hit by a car. so in that reality, this is just a small part of your budget. it's 2.2 million. we went and we opened sanchez school with mayor lee -- everett school on sanchez, everybody was out, watch for

kids, and they were a crossing guard down, and i don't think they've ever been filled. i heard supervisor fewer say there were a number of schools in her district that don't have crossing guards. i just -- i feel like -- it would be great to know that every school -- i guess what i'm looking for is a commitment that every school in the city that needs crossing guards will have crossing guards. i mean that's what i'm really looking for. and if you overbudget, and you don't need as many as you might need, but so many schools -- like, the schools that i -- i was -- over on 24th and fair oaks, they'd submitted an application a long time ago, and they just gave up, so we have a futility amongst a lot of schools knowing they won't get them. and it just it kind of -- it's weird to send in people to go and talk about safe routes to

school and teaching people how to ride a bike, and we spend all that money on that, but we don't provide the minimum basic service, which is crossing guards. that that's just a plea, that's just my bias that i hope that the commitment will be less position oriented and more capacity oriented and just a commitment that we will do whatever it takes. 'cause again, relative year budget is very small money. the impact is high. we may not have people getting killed, but they're getting run over. just 'cause we didn't kill them -- it's hard to talk to a mom and five-year-old that have been hit by a car, and they're at the intersection. the first question you ask yourself, why isn't there crossing guards, so i hope, i hope, i hope. >> supervisor cohen: thank you, supervisor sheehy. i'm going to go to supervisor yee. >> supervisor yee: so i'm going to join the chorus of

crossing guards. i'm going to echo supervisor fewer in regards to potential expansion of the hours to get to 20. i think i'm having a hearing on the issue that we're having in san francisco or anywhere where most of the fatalities between collision of a car and a human being are seniors, and yet, we know that there are senior programs that operate in the morning or whatever, and there are -- the food pantries are a place where a lot of people are crossing that are seniors. i'm just wondering if we could be a little creative in seeing how we could work together to identify those in which one -- the crossing guards at the

school to easily walk one to two blocks at these senior sites and help the seniors cross. >> supervisor cohen: thank you, supervisor yee. director reiskin, i appreciate your presentation, and you heard from the colleagues about crossing guards. i particularly am interested more in infrastructure and building out our infrastructure and maintaining the infrastructure that we have in place. and my understanding is the fte's that you're proposing, is it 200 -- 2 -- is it 298 operators? >> director reiskin: there's 298 within the transit division. some of those are operators. there's probably more of them on the maintenance side. >> supervisor cohen: i'm under the impression you're doing this hiring to increase the efficiency of the service to ultimately all of san francisco. is that right?

>> director reiskin: all of what we're investing in these transit is to provide services to either meet commitments that we either have collectively as a city made to buy more vehicles and allow more development in san francisco as well as to anticipate the future development that is continually getting approved through the planning commission and board of supervisors, so i see this as we're fulfilling commitments that we've made over the years as we've authorized the purchase of buses and expansion of light rail vehicles, all of which have been strongly and unanimously supported by the board of supervisors and the mayor, as well as the population increase of the city we're seeing, as you made reference to previously. but we can't accommodate that population increase with more cars on the road, so transit is really going to be the way that

we're going to efficiently and sustainably be able to move those people because we do insource our transit service, we deliver it with civil servants. that's why the increase in serviceman fests as an -- service manifests as an increase in fte's. >> supervisor cohen: we're talking about an entity that has a $1.2 million operating budget. >> director reiskin: that is what's proposed. >> supervisor cohen: how much were your projections for the current fiscal year? >> director reiskin: so for the current fiscal year is 1.18. >> supervisor cohen: and what was the last fiscal year? >> director reiskin: last year, expenditures were up at 1.37. i believe there were a number of one-time expenses, including some relates to litigation and -- related to litigation and carry forwards that made

that number higher. but generally, the current fiscal year is what's trending at 1.18 and next year, 1.21, so a relatively modest increase. >> supervisor cohen: do you anticipate anymore litigation in the up coming fiscal year? >> director reiskin: we've anticipated that into the next fiscal year. >> supervisor cohen: and how much are you intending to carry forward? >> director reiskin: this year, we're at the end of the budget cycle, so whatever we have leftover at the end of this fiscal year, they would just fall over to our fund balance. we expect the end of this week to get new figures from the controller's office, we will be making a technical jauflt, and that is in part how we will be funding the additional crossing guards that were proposed to my board after the approval of the budget. >> supervisor cohen: and how did your board receive the request from this body for crossing guards?

were they surprised? were they supportive? >> director reiskin: they were supportive. >> supervisor cohen: okay. thank you, director. i appreciate your presentation. supervisor stefani has bun final question. >> commissioner stefani: yes, i do want to echo the chorus on the crossing guard and taxi. what safety enforcements do -- [inaudible] >> director reiskin: yes, thank you through the chair to supervisor stefani. with you look forward to the hearing that you and supervisor fewer have called on this topic. we've made the capital investment and upgrade a lot of the systems within the garages. we're i think one-third of the way through a three year program of upgrading our garages. as you know we've had some very preliminary but encouraging results in terms of what we're

doing to add more cameras and lighting. we've also added screening and other ways to limit access as well as coordinating with the police department to strategically deploy their resources to help with the garages. as you know in a couple cases we've seen very substantial improvements such as the long-standing conversations we've been having on the pierce street garage going bockmanny years. with regard to on muni, we have a work order with the police department through which we procure security services that's funded both from operating dollars and grant funds. to the extent they don't have full-time resources available or to the extent we've had extra grant money, we also use what we're calling our surge operation where we hire off duty police officers to come and work smaller shifts, and

using that resource, we've been able to be very strategic in working with the police department to he can inform -- focus them on the areas, the days, the times, the locations where we see the most security challenges. we also have our fare inspectors. we have our muni transit assistance program, so we have a number of dimensions of security on the muni service that we're able to provide. we have seen some returns on that at least in terms of reported crime on muni, so reported crime has been going down on muni, but i do recognize that the perception of safety and security on muni still remains a concern, so we continue to work with the police department and our own staff to kind of capture the rider feedback in addition to the police reporting data to try to most optimally deploy our resources. i will note -- and this may be

true back to the questions that you had with the airport with regard to potential homeland security funding that federal funding support in these areas has been dwindling. there's a program within the department of homeland security called the tran sis security grant program, the funds that we've been seeing in decreasing amounts over the year, so i think the federal government will be a less reliable partner in this, so we'll need to look more to our operating budget or other grant opportunities to try to address security. but we are encouraged at least that the reported crime on muni has generally been dropping and be happy to go into much more detail on those questions at the june hearing. >> supervisor cohen: i want to talk about certainty and risk. senate bill -- in injure slide deck, you -- your slide deck, you acknowledge thatten al bill 1 is in jeopardy of being repealed, and that's going to have a pretty significant

impact. 27 million out of your operating budget. if that's successful and the repeal happens, what does that mean for our transportation system? >> director reiskin: so we would have to go through a budget rebalancing practices. i mentioned early -- rebalancing practices. part of the way that we were able to accommodate the increase muni service that we were in this proposed budget was because of the new sb 1 revenues, the tune of $27 million. so we will have to reevaluate should that measure make it to the ballot and be approved by the voters, we would have to reevaluate our budget and come back, whether it be not implementing the full extent of those service cuts or looking at other areas of the budget to try to identify savings. i know we focused on a small area of the budget, but we have

more demands, whether it's in maintenance or operations, whether it's refreshing the paint on the street, let alone crossing guards and police services, than we have the resources to be able to supply, so we try to weigh all the different needs and try to develop a balanced budget. that $27 million in addition to continuing strength of the general fund was a big part of what allowed us to put forward and for our board to approve a pretty robust budget, particularly in terms of muni service. so muni service would be one of the areas that we would need to look at should we lose that anticipated 12 -- $27 million annually. >> supervisor cohen: you mentioned that costs are going up. can you identify where costs are going up? >> director reiskin: it's primarily pension and health benefit costs of employees which are rising faster than inflation, faster than our revenue growth. >> supervisor cohen: and the way we manage that is maybe restricting the number of

people that we hire? >> director reiskin: so that's part of the calculation. i think that was the spirit that was behind the mayor's budget instructions, because they were looking out, just as we were looking out seeing the expenditures growing faster than the revenues, we both for our budget and the general fund budget see a shortfall that we're going to need to address. >> supervisor cohen: do you know that shortfall? >> director reiskin: i don't have that number, but i'd be happy to share it with you. our baseline shortfall for those two years but on the number of $29 million, so control fte growth is part of the strategy. on the other hand, the core service that we deliver, we deliver with public servants, and we don't intend to stray from that. so in order to meet those obligations, that's why we propose the employee growth that we do. >> supervisor cohen: i see. do you guys have a rainy day

fund? >> director reiskin: we do. so our board set a policy of holding in reserve an equivalent of 10% of our operating budget, so that would create a reserve requirement of about $120 million -- $120 million. right now, the fund -- >> supervisor cohen: annually, or that's what you have in total? >> director reiskin: so the requirement is at any given time have a fund balance equivalent to at least 10% of the operating budget. that was something that we dipped into before i got into the agency but pretty significantly during the recession in order to preserve or not to have to make service cuts to muni. we have since grown that back and we're now significantly above that rainy day fund requirement, and i have a chart that shows that. >> supervisor cohen: sfgovtv if you could show that. >> director reiskin: because the fund got built up so high, 20% of the operating budget, we did in the last two year budget

as well as in this proposed budget proposed drawing down on that reserve, putting it only to one-time uses, such as equipment purchases or other capital improvements, but we are proposing some expenditure with that, but it would still, as approved, and before the latest projections from the controller's office would leave us above that 10% reserve requirement, and this is what we would have to draw on should there be an economic downturn. >> supervisor cohen: all right. supervisor sheehy, did you have -- >> supervisor sheehy: just a quick question, and thank you, supervisor stefani for stimulating this. do police officers still -- is there still that requirement as part of their shift that they ride on a muni vehicle? >> director reiskin: i believe that's still probably in writing a policy of the police department. it would be a better question for the police department, whether it's still a policy and

to what extent it's really still in effect and enforced. >> supervisor sheehy: for the riders, it makes them feel safe for those blocks. i think that's something we could refer to the department. i remember you'd hop on a while, but i remember they had to do that as part of their shift, and i thought it was a good policy. >> supervisor cohen: all right. thank you. seeing there's no further questions for you, thank you, and we'll see you next week. >> i guarantee you, there will be easy. >> supervisor cohen: excellent. thank you for your patience. i really appreciate it. >> thank you.

we are tiny compared to the giants that you have been hearing from. i want to thank you, chair cohen for this opportunity, and community members, i will very quickly do three things. i will provide you with an overview of what we do, i will highlight our budget and i will highlight a couple priorities that will be coming up in the next budget cycle that we have been embarking on now. next slide. so just in large overview of what we do, we serve thousands of residents and businesses every year. we go door to door with recycling and composting so to make sure materials don't end up in landfills, we work with small businesses to reduce energy, we protect our public housing residents from exposure to toxic chemicals. we work with our fellow city agencies, with the board and with our business community as well as with our residents on actions around climate change, and those actions have been paying off.

this is one of my favorite slides. i know you have a lot of numbers before you, but the number i'd love to leave you with in my short time is the number 29. 29% reduction below 1990 levels in our greenhouse gas emissions. we've done that reduction while our population has increased by 20% and our gdp by 111%. there are very few cities around the world that can show a slide like this. clearly, there are large impacts on our city to have such large population growth and gdp growth of the one of the successes is the decoupling between the economic population and the greenhouse gas emissions. we do that in partnership with some of the entities you heard them today. it warmed my heart to hear them talk about their environmental goals. you'll hear more about that later today. our budget, as you said, chair cohen, we are not on the

general fund. so when you look at our pie chart, it breaks down pretty dramatically. about half comes from what is the solid waste impound account. that is from the garbage rates. we raise a full 22% or 23% either through grants and awards or through work orders from other city departments, showing our value every step of the way that we can. that 24% pie, the yellow, is the cigarette litter abatement money. that is simply a pass through. it comes to our department and then goes to public works to do litter abatement and especially around the cigarettes. our -- the next slide is our budget at a glance. the main point to look here is the bottom line, and when you look at the bottom line, you'll see that our budget has remained very stable between last year and this year. the change that you see reflects changes in grants and grant cycles. because we are so heavily

dependent on grants, it does impact our budget, and you see that here where we have some grants going offline, others that will be coming on. we have met the mayor's request that make sure that we absorb any increases in internally. likewise, the next slide -- >> supervisor cohen: before you go to the next slide, i want to ask a question. i see a $1.1 million increase. you have a $22 million budget, and i think there's a 1.1 increase -- >> decrease. >> supervisor cohen: excuse me, decrease from between fiscal year 2017-18. you said that comes from grants? >> yes, and we are applying for more grants to try to soften that impact. that is a symptom of our department because we are so heavily grant funded. our next slide shows we have met the requirement of the mayor to keep our fte's

constant, and you can see it's pretty much the same year to year. finally looking forward who's coming down the pike, as you may know we have already started rolling out the biggest change to our program in the last 15 years. about 60% of the roll out, family and residential sector. in the meantime, we have launched a very intensive multilingual outreach program to work with the residents and the small businesses to make sure people understand what they need to do. and finally, the next large initiative for our department, so very much not alone at earth day breakfast, the mayor announced a strategy and a goal to get to net zero carbon emissions. this is very bold. it keeps us in good company with 25 cities from around the

world. it makes us compliant with the paris climate agreement and the mayor has tasked the department of the environment with leading the way, developing a strategy, and prioritization scheme for meeting that goal, which we will be embarking on in the coming year. so in closing, as you can see, we have about a $22 million budget. we have no additional fte's, we do not have impound money, and we are very proud of the work that we've managed to do in the last year. so thank you. >> supervisor cohen: great. thank you. my compliments to you and your entire staff, and congratulations. that was under ten minutes. good job for you. definitely getting a gold star. i don't have any questions for the proposed budget. i want going to ask if there was any cost savings, but i don't think you have any or any salary savings or anything like that. >> there's -- no, we're very flat on the salaries. >> supervisor cohen: okay.

great. thank you. supervisor fewer? >> supervisor fewer: yes. thank you for your presentation and thank you for all the work you do to pick up the cigarette butts in my neighborhood. i just want to know, do you have any vacancies? >> we have three vacancies, and they are he aall in the process of recruitment, so we're looking for good candidates. >> supervisor fewer: thank you very much. >> supervisor cohen: cone all right. keeping things moving, we're going to hear from child support services next. child support services is headed by miss karen roy. their total budget is $13.5 million. apparently they tell us there's no change from last year. it's mostly comprised of federal dollars and state dollars. >> that's right. >> supervisor cohen: all right. let's hear about child support services. >> okay.

>> supervisor cohen: next, we will hear from san francisco employee retirement system. >> thank you so much for inviting the department to present before you today. chair cohen, thank you so much. members of the committee, i am excited to present our budget to you. joining me is our deputy director, carol bennett. >> supervisor cohen: hi, carol. >> next slide. thank you. it is our mission to empower parents to meet the needs of their children. while our services remain significant, how we deliver these services needs to keep pace with families today. the child support program

understands that sometimes parents need help in meeting their obligations to provide economic support for their children. many parents responsible to pay child support are themselves struggling with poverty or just as involved and face significant barriers to gameful employment. the head winds some parents face in accomplishing their goals requires a concerted effort and child support must be part of that effort. with an innovative spirit, the department has structured its delivery service to one that is family centered, helping parents meet their economic commitments to their children, strengtheni strengthening ties. we recognize that custodial parents who suffered domestic violence should be able to pursue child support safely, that realistic orders that are in line with parent earnings are reliable orders that

children can count on. that incarcerated parents are parents first, and their children are waiting for them and that coparenting provides fathers the opportunity to engage and care for their children, creating long-term benefits for the whole family. the department manages both with conviction and optimism. we continue to build a stronger and more valuable program for all san francisco families by leveraging our partnerships with relevant city agencies and community-based organizations, strengthening outreach to build deep client connections and reaching into our program to ensure parent equity and treatment. low-income families who have timed out of public assistance rely heavily on child support as a safety net. for deeply impacted mothers who receive it, child support is 63% of the family's annual income. our clients are predominantly

african american and latino, with the number of asian american families increasing. 98% of families paying child support in san francisco are fathers, and 97% of children on our caseload have paternity established, helping to build stronger familial relationships. in my experience, we have made meaningful progress for federal fiscal year 2017, the department collected approximately $26 million. 95% of every dollar collected went directly to families, and of the 58 california counties, san francisco is ranked fourth in collections for children. the department receives no county funding, no county

general funding and is 100% supported through federal and state funding as was mentioned by chair cohen. the department anticipates federal funding and has aligned its budgets to maximize budget streams, mineful to live within our means. this budget prepares for future increases in the cost of doing businesses with three primary adjustments to proposed spending. first, the recalibration of county costs related to health and retirement benefits were actualized for this budget at a lower cost to the department adding to atrition savings. second rk second, funding in the department's telephony and i.t. systems has been funded by the state for the current year, and finally, current county recovery from oth city

departments are considered ongoing and primarily supports colocation costs. key to delivering on the promise of enhanced case management services that address the needs of trauma-impacted and fragile families are direct service providers. and at this time i want to take a minute to thank the men and women of the child support program. i believe public service is a calling and not just a job. investing in the people that deliver our services is critical. the department has a workforce that is culturally competent and reflects the diversity of the people we serve. case workers appreciate and respect cultural differences and take them into consideration providing excellent customer service to parents. the department also prioritizes language access, understanding

that absent effective communication, a culture of inequity in service delivery is very possible. we regularly analyze and criticize our internal systems in relation to clients' feed pack to ensure systemic barriers to access do not occur. i also want to take an opportunity to thank the mayor's office and the controller's office for their assistance with this budget. i'm happy to answer any questions you may have. >> supervisor cohen: thank you. so colleagues, just want to acknowledge that the child support services will not have a budget legislative analyst report next week. i would like to propose that there's no need for them to come back and present to us again, so we will just hear this, and then, we will dismiss you for the -- for the duration of the process. i don't know if there's any questions. supervisor fewer? >> supervisor fewer: just one question. i noticed in your report you said that the caseload is down. >> yes. >> supervisor fewer: and why

do you think that is? >> our caseload has -- has gone down substantially. i believe it's the families that are leaving san francisco. they simply can't afford to stay in our city. we, at one time, had over 27,000 cases, families that were receiving support through our program, primarily middle-income families. we have seen a drastic drop in that number. i also want to say that this program is free to all families, with $25 annually, any family member can come in and ask for services, and we will support you, and we will provide you with legal support. we know that it roughly costs around 12 to $25,000 for mediation services, legal

services, etcetera. for $25, we're here for you. >> supervisor fewer: thank you very much. >> you're well cocome, through chair. >> supervisor cohen: i don't see any other questions. thank you for your service. >> thank you. >> supervisor cohen: all right. next, i'd like to call up the san francisco retirement system. they have a budget of -- [inaudible] >> supervisor cohen: years of service. >> yes, i've been watching the committee, and i wanted to acknowledge norm. he's worked two tenures with the retirement system. i'm very grateful that he decided to come back. he's worked in various

departments, well known and really appreciate the work that he's done. congratulate him on his retirement. >> supervisor cohen: yes, congratulations. >> he's learned the subject matter too well when you work for retirement. >> supervisor cohen: all right, mr. huish, are you ready to get started? >> right. pleased to be here, supervisors. with the retirement system, our mission is to invest the pension trust prudently, to administer the mandated benefit programs, and most importantly, to the folks who have earned pensions, we pay the promised benefits every month. the second slide that i have here, just as a reminder, that plan was established originally in 1922. currently, we're administering 14 separate retirement benefit programs for the employees and retirees of the city and county of san francisco.

i have just sort of for tracking purposes our three-year membership growth. you can see that we have nonretired members have grown from last year, a 4.8% increase, retired members at 3%, and overall total growth from last year is 3.9%. we've crossed over the 70,000 active and retired member number for the first time. the next slide basically shows the fundedness and the health of the retirement system, and i'm very proud of this slide. i think you will often hear me say, and other people will say that we're among the very best funded pension plans in the united states. we'd love to be 100% funded, but certainly, we're working towards getting 100% funded. i have a very hard working board, pioneering board, and we're doing our best.

you can see that the market value of assets in 2017 -- we take a snapshot every year, july 1, 2017 was $22.4 billion, which meant we're funded at 87.2% ratio. just to deliver you the most up to date news, as of the end of first quarter 2018, the trust is over $24 billion, and we're set to have a return of around 10% on the plan, which hopefully on the mayor's budget side will be a surprise that we've done better than expected. we always try and help, so good news so far. but as most of you know, the financial markets, especially in 2018, have been pretty shaky. we had a 10% correction, which we believe was long overdue. we recovered from that correction. we're positioning our assets in

over time to make sure that we aren't severely impacted by those types of downturns. the retirement board acquires the deferred comp program. we're pleased with the participation we have in the program. we currently have over 19,000 employees that are voluntarily contributing to deferring kp compensation to this plan. we have just under 30,000 folks that have accounts with the deferred comp program, and the assets that the employees have contributed and the investment earnings they have now top $3.4 billion. so this is a significant program, an important tool, sort of the third leg of the stool for folks who are looking

inforlooking to retire. we're very pleased with the participation in the deferred comp program. we opened up a loan program in august of 2016. this was at the request of the city, and the employees, and we have had over 2400 folks who have taken out loans against their own account. you take the money out, you pay yourself back the interest, and so even though we've not widely publicized this, it's certainly on the website. it's a program, you can use it for a down payment on the house, or you can use it to pay college tuition. >> supervisor cohen: what's the maximum amount of money that you can borrow. >> the higher of $50,000 or half of your account balance. so if you don't have $100,000

in your account, you can borrow up to half of what your account balance is, but the max is 50. you can have multiple loans. >> supervisor cohen: once the account balance is paid. >> no, you can have multiple loans at the same time, so it's a very important program for folks. also effective july of 2017, the administration and investment of the retiree health care trust was transferred from the office of the controller to fers, but i'm -- i won't he tell you what the funded percentage is, but i'm happy to report that has grown to over $250 million, so we continue to invest that money. that is the money that was required at a 2% rate for new employees and now is being phased in for all current employees at quarter percent

rates. the city also has a contribution that goes into this pool, so we're excited about trying to prudently invest these funds, also. our budget highlights are -- i will respectfully correct the chair, madam chair, that even though it looks like there are general fund dollars supporting the retirement system's budget, there are no general fund moneys. i think it's setup in a general fund account skbrujust so it c handled differently. >> supervisor cohen: that's correct. >> but all of the funds for the sfers are paid by the trust through the deferred comp program. they're reimbursed to us by the third party administrator and for the retiree health care trust fund, all of the expenses for administering the program are taken from the earnings of the retiree health care trust