legislation, the board is approving the issuance of the power bonds, wastewater bonds and the water bonds through proposition e, two-thirds vote of the board to approve the bonds. there is no cap on the amount of bonds that the board can authorize. p.u.c. practice is to come every two years and ask for an increase in bond authority that's consistent with their new two-year capital projects. but what happens to the prior bonds, things change. projects change, financing costs change. there are bonds that are allocated -- authorized but never sold or only sold over a long period of time. and what you are not seeing when the legislation comes forward, is the details on what the board is already authorized and what's outstanding. and so for each of these resolutions, ordinances, the bond approval ordinances, we do

ask for the ordinances to be amended to have the general manager p.u.c. provide a written report every two years when the p.u.c. brings forward their authorization in capital appropriation. so that in fact, the -- there is a report that details the total amount of bonds that have previously been authorized. previously been sold, the amount authorized and not yet sold, and authorized and no longer needed due to changes in products or financing or only issues. for each of these three pieces of legislation, authorizing bond, we request there be an amend to the ordinance. >> supervisor cohen: requested amendment to the ordinance. >> so file 180450, make sure,

file 180451, and i think probably 180452. so, each of those would have that amendment in it. >> supervisor cohen: making recommendation, i see what you are saying. >> the same language in each 1, 180450, 180451, and 180452. and the specific language states amend the proposed ordinance to request the sfpuc general manager to provide a written report to the board of supervisors as part of the two-year budget review, detailing the total amount of the power of revenue bonds, wastewater revenue bonds, authorized under proposition e. the total amount sold, authorized, and unsold, and no longer needed due to changes in projects and project financing.

>> can you reiterate the reasoning behind the recommendation? where are you suggesting this? >> every year when we come and look at this, in two years, unlike when you have a general obligation bond, you know what has been authorized. if it's $400 million bonds, you know that's what's authorized. under proposition e, when it got approved, there's no cap on the amount the board can authorize. over the years as projects change and financing changes, becomes a huge difference between what's authorized and what has been sold and still needed, so you continue to approve new bonding authority and from our perspective, there isn't a total picture of what's previously been approved and how that has changed over time. so this is really providing full information to the board of supervisors when you exercise your authority to approve the bonds. >> supervisor cohen: thank you, appreciate that reasoning. all right. thank you.

i assume you are in agreement. >> it's a sensible recommendation. >> supervisor cohen: we like to do sensible things. supervisor fewer has a question for you. >> supervisor fewer: concerning your budget, and i see that our b.l.a. has said that your recommended reductions to the proposed budget total is, over $6 million. and that over 3 million of that are ongoing savings and approximately 2.5 one-time savings in year two, recommending reductions of proposed budget total, over $4 million. so, i would like to make a proposal on how maybe some of the funds can be spent. you know, i think that i would like to propose that actually our districts receive more water filling stations. i think they are very popular in

the neighborhoods. if you want people to switch from sugary beverages to water, it should be accessible in a lot of the areas. i know there's an expansion program. i have an update on that, but i think there's more need than what your expansion program actually represents. so, this is my proposal today. i am proposing that for eight districts, that supervisor can choose maybe three sites with p.u.c., that might be more advantageous to have those filling stations put in. and then for districts, for example, supervisor cohen's district has areas that are food deserts, those districts would get five filling stations because also those districts are, some of those districts are hit hard around sugary beverage consumption. so, i'm making a proposal that we set aside 480,000, i think

that my estimate is between 13 and $20,000 for each filling station. so estimated at 20,000 for each filling station and to actually expand it within our districts. you can respond if you like or -- >> what -- >> absolutely possible and something in the jurisdiction of the committee to do, once you have made reductions to restore it back to the district for different purpose, a question with the committee how you would like to work that process. typically the budget committee has reallocated money back at the end of june as part of your final deliberations on the budget, when you have all reductions made. at that time with the full restoration, or add-back list in place. >> you are suggesting, mr. rosenfield, we actually do this in june.

>> that would be my discussion. >> and maybe in the meantime we can work together to find out what the actual numbers would be, and what a program like that would look like. >> absolutely. >> supervisor cohen: thank you. i told you, everyone is living for june 1st. june 1st. ok. hi, sf govtv. let's get this, keep this moving. one more item to hear. actions and items and recommendations we have heard. public comment on items this 1-3, let's take public comment on items 8-13. 8-13, if anyone would like to speak on these. seeing none, public comment is closed. all right. and -- >> supervisor yee: motion to amend as recommended by b.l.a.

for all of these items. >> supervisor cohen: let me help you out here. accept supervisor yee's motion, add some clarity to it. we are going to amend for the, items 2 and 3, i would like to table item 1. ok. >> supervisor yee: actually, i was referring to items 8, 9, 10, 11, 12, 13. and i guess there was some recommendations for amendments, i'm just making a motion to accept those amendments. >> supervisor cohen: ok. we'll take that. >> clerk: the amendments regarding items 11, 12, and 13. in which the b.l.a. made recommendations to accept those items. >> supervisor cohen: that's what supervisor yee said and take it without objection. second by supervisor cohen, and without objection. any other motions or any other actions that you guys would like to take? >> supervisor yee: we have to make a motion to pass these

items as amended. >> supervisor cohen: we do need to do that. also, if i'm not mistaken, mr. clerk, table item 1. >> clerk: i believe just taking the sfpc action, i believe it would be a motion to recommend items 8, 9, and 10. and to recommend items 11, 12, and 13 as amended. >> supervisor cohen: all right, thank you. supervisor yee, i understand that's exactly what you said. >> supervisor yee: yes. >> supervisor cohen: supervisor yee made the motion, stefani seconded. >> clerk: adopted with supervisor sheehy not at the meeting. item 7, a hearing on the controller's nine-month budget status report for fiscal years

2017-18 and requesting the office of controller and the mayor's office of budget to report. >> supervisor cohen: thank you. mr. rosenfield. >> we can present on the nine-month report. i would suggest procedurally you probably on items 2 and 3, want to accept the budget analyst recommendations. >> supervisor cohen: that's what i was trying to do, but i was unsuccessful, so -- mr. clark. >> supervisor yee: i would like to make a motion to accept the b.l.a. recommendation for those amendments. for the items that were included in 2 and 3. >> supervisor cohen: awesome. i'll second that, and take it without objection. >> clerk: b.l.a. recommendations for items 2 and 3, have been accepted with supervisor sheehy being excused from today's meeting. and may i suggest, i believe it was proposed that these matters be referred to the july 17th meeting of the full board. no? >> clerk: items 2 and 3, i think

you want to continue them to the call of the chair to be combined with the june 1st budgets in front of you. and then item one can be tabled at this point by the committee. >> that is right. >> clerk: items 2 and 3, those have been amended. and i believe the motion now is to continue those matters to the call of the chair. >> supervisor cohen: that is correct. and item 1 is a table item. a tabled item. >> clerk: yes, to be heard and filed. >> supervisor cohen: great. now, we will hear from item 7. >> clerk: item 7 has been called. >> supervisors as you know, our office issues periodic updates on how the city is performing against the budget you adopt each year, and so a few weeks ago we issued our last rejection report for the fiscal year we are ending. we call it the nine-month report. it's available on our website. you have copies in front of you

and i have some on the stand next to me. i'll be very brief in hitting highlights from the report and take any questions you have. at a high level, the -- our most recent projection indicates the city's general fund will end with approximately $94 million more than we did in our six-month report. so, a significant improvement versus our last projection. the vast majority of this is related to good news in the department of public health. that's being driven by both patient revenue and a very significant and large one-time, $39 million payment associated with how affordable care act money flows to the city from the federal government. we have got, i'll hit some other revenue highlights in a minute. but tax revenues are performing well, only modestly ahead of our prior projection. additionally, in terms of department spending, generally

in line with the six-month mark, one exception. police department has had a series of very large worker's comp cases that have driven their worker's comp costs up significantly, since the six-month mark. our projections are require about a $5 million reappropriation of other savings in the budget to cover this overage. i think will you likely see that coming in the near term. so, those are a few of the highlights from the report. obviously a lot more here, and i'll talk through some of them in a minute. big picture, $94 million improving balance at the end of the year, the typical practice of the city is take that and push down the projected deficit. if we do that, $137 million shortfall we projected, the three offices projected, just a few months ago, would climb to about 43 million. so, significant reduction in the projected shortfall and

additionally, our office will now update projected taxes into the new year's, and i would expect, given the growth in the current year now, the updated tax forecast, included in the mayor's june 1st budget, more likely to offset the remaining $37 million gap. so, this is showing some of the key components versus our last projection, and where you see surpluses and deficits, versus that time. you can see the vast majority of the improvement of 94 million is being driven by department operations. that $84 million improvement again the vast majority of that driven by the department of public health and good news we are seeing there. tax revenues, city-wide revenue surplus of 21.4 million, and then a host of other smaller up and down. [please stand by].

>> this is easily our most volatile revenue in the city. it's paid at the moment properties change hands and given the -- given the changes the voters have adopted, we have higher rates that becomes a key driver of what the tax looks like. and the rate at which those changed hands is very uneven. you can see here what that performance looked like in recent years. and you can see how jagged and volatile this tax can be. in '08-'09 at the beginning of the last recession, we had a year that we received $50 million for an entire year. and you can see the improvement we've seen since then, largely driven by both rate increases and more transactions of

downtown office, hotels, and other large commercial properties. there were times in '16-'17 where in a single month we received more transfer month than we did in the entirety of '08-'09. so we've had a remarkable run-up. you can see we hit a peak of $400 million last fiscal year. and now you can see how far we've fallen off from that peak in the current year. now we're estimating $257 million in transfer tax for the current year. that's $150 million loss versus the prior year, which was that extraordinary peak, and it's being driven by the pace that commercial properties trade hands. >> supervisor ye >> supervisor yee: can i ask a follow-up question. i guess transfer taxes are more unpredictable but i'm surprised

for the property tax, i would have thought it would be a little more predictable. it's good that we have more money, but i'm surprised that we're that off in terms of estimating it. >> so what's been driving property tax, which is definitely more stable than transfer tax, the improvement we've seen is the rate by which the assessor's office has worked through their prior year bills. so we've had a remarkable amount of property changing hands in the city. all of that property needs to be assessed by the assessor's office and it adds it to the roll going forward. so there's been a backlog of property tax bills to be worked. this has been true in the city for many years. and what's driving that passenger, the assessor's office is working through the backlog more quickly than we've expected. so that's adding more money to the roll than what we expected

than what we thought to be the case. >> supervisor yee: kudos to the assessor. >> i agree. i will note where we'll end the current fiscal year on transfer tax and into the fiscal year is a key tax for us. the good news in revenues drives improvements to our baseline contributions. so some of the improvement you're seeing here in taxes is driving smaller increases or improvements to the transfers that were required to send to the m.t.a., the library, the schools, children, open space, and other funds. and there are more details about the specific values for these in terms of department operations, this is showing you a summary of both revenues and uses for our largest departments. again, there is much more detail in the report itself. the number that sticks out on

this page is $80.5 million for the department of public health, which is what is driving the bottom line improvement of $84 million. of that $80 million, it represents a $48 million improvement from our projection just three months ago. and almost the entirety of that improvement or $39 million of that change is being driven by a large, one-time payment we've received associated with the aca expansion population that the federal government has modified the timing of how the payments occur. rather than receiving one payment this year, we actually received two payments this year. and that will not occur in the future, but for this year, it's two payments and that single act drives a $39 million variance. there's a lot more information

in the point, but i know you've had a long meeting. this is a good news report, again, being driven by the department of public health. it substantially reduces the deficit for the fiscal year. now we're 10 months through the fiscal year, so we're more comfortable with -- we're projecting a shorter window to arrive at these numbers there. is so uncertainty with in particular transfer tax and volatility at the general hospital. and other things are creating uncertainty when it comes to public health revenues. and our next update from our office will be what we call the revenue letter, which is our commentary following the mayor's budget in early june regarding the revenue assumptions in the coming two years. with that, i'm happy to answer any questions you might have. >> supervisor cohen: thank you.

you answered my question about transfer tax. also answered the question that i had around the volatility around zuckerberg general, and that has to do with the cost of service. we have more people accessing department of public health resources than anticipated. is that what it was? >> public health revenues in the current year have outperformed the budget, if we look back to the original budgets today. and it's being driven by a number of things. a census at the general hospital that's higher than budgeted. more patients mean more payers. the coverage ratio of those that have insurance versus those that don't is continuing, which is a multiyear trend. so the hospital is receiving more revenue, and some of that is associated with the aca as well. and in this report, you have a very large, one-time payment,

which is from the federal government associated with the medical association. so those are the drivers in the variance. >> supervisor cohen: thank you. do you have any questions for the controller? all right. thank you i have much. -- thank you very much. let's take public comment on item 7. any member of the public that would like to comment on item 7, controller's nine-month budget status report. seeing none, public comment is closed. thank you for your presentation. is there an action on this? can i get a motion to -- supervisor yee or stefani. supervisor stefani made a hearing to file this hearing as heard, seconded by yee. we're taking it without action. is there any other business before this body? >> clerk: that completes the agenda for today. >> supervisor cohen: thank you. we are adjourned.

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