>> the departments both agreed with those recommendations, and i'm not sure if the committee -- budget recommendations concerning the port budget and the budget recommendations concerning the library budget. >> item 4 is the library -- >> this is items 1, 2, and -- >> supervisor cohen: i see what you are saying. we have, i don't think we took action on that, correct me if i'm wrong. >> that's my understanding that you did accept the recommendations regarding the airport budget. >> supervisor cohen: but did not take a vote. >> you did on the airport. >> clerk: the vote was rescinded. no actions at this time. >> my question was, the same thing on the library and the -- >> supervisor cohen: no, that was not done for the library and the port. that's incorrect. ok. all right. department of the environment,

welcome. >> thank you, good afternoon. supervisors and madam chair. thank you harvey rose and kerry tam from the board budget legislative analyst office, kelly and chris from the mayor's budget analyst, and pleased to say we accept the recommendation and have no challenges. >> supervisor cohen: thank you very much for being here. colleagues, do you have any other questions for the department of the environment? all right. thank you. we can take public comment -- actually, no. we'll move on, already taken public comment. >> clerk: public comment has been taken on these items already. >> supervisor cohen: mr. rose. >> you want to hear our report on the environment? >> supervisor cohen: yep, waiting to hear it. >> on page 25, our recommended reductions to the budget total 194754, and 18-19. of that amount, 94,300 ongoing

savings, 100,454, 1-time savings, and for 19-20, recommended reductions total 94300, and all of those are ongoing savings. and as i understand it, the department does concur with the recommended reductions. >> supervisor cohen: thank you. i have a question for the director. it has to do with the solid waste contract. specific, what does the solid waste contract recommended for reduction do? >> specifically, illegal? dumping-related? >> i'm just trying to find that particular item in here. i apologize for that. the solid waste contract, i do not -- what is the dollar amount on that, and then i can find it. >> sure, hold on a minute. i can look for that. mr. rose, do you have that

information? >> yes. >> page -- you are correct, madam chair. page 26. other professional services. and the reduction is going from 94,940, to 38156, and based on historical expenditure and the projection for the new year. >> that's professional. professional service contract for that item is used to assist on analysis of the performance of the department and to look at the solid waste functioning, the contract is not going to be happening this year. that item is not up for renewal. >> supervisor cohen: are there any campaigns or any kind of outreach or -- >> oh, yes. >> supervisor cohen: things maybe in the pipeline when it comes to heightening people's awareness of illegal dumping? >> in terms of the illegal dumping, that's in our budget, our program areas for environmental justice and impound account for the 0 waste

program, where we work very close with the housing authority. we also work with the bayview hunters point neighborhood through a particular task force. ivan task force, to set up cameras and to work with neighborhoods and public works and the public health department to attack illegal dumping in that neighborhood in particular. >> supervisor cohen: in what way do you partner with recology? >> partnership with recology, identifying, using the public works hot spots information to find out where are the areas of particular challenges and then to decide who can respond most quickly. recology, the public works staff so we can take care of it. >> ok. and so i am very sensitive to the large items like dressers, couches, mattresses, that you see when people basically are moving, moving out, generally. you see it on the corner, and

it's very innoculous, people think they are doing a wonderful thing, i don't know who would want to take someone else's mattress, that's my bias. >> when you were thinking illegal dumping i was thinking on the commercial sector, but your point is incredibly well taken. and we are way upping the outreach on the bulky item pick-up. we had not been promoting bulky item pick-up to a lot of the public housing areas in particular, one area, and we have that option open to all in san francisco, so we are doing mailers, letting them know in the bill, and through the ad campaigns that they have the opportunity for free pick-up, it's part of their garbage rate twice a year. because you are right, they think well, somebody is going to take it away, and yes, somebody does, but in the interim, you have an eye sore and a hazard on

the sidewalk. >> ok. i appreciate that, and glad to know you don't like it either. all right. any other questions? thank you. let's keep moving. department building of inspection. then we'll hear from the retirement board. >> good afternoon, supervisors, here on behalf of director tom heely and on behalf of the director, thank the budget analyst, and the budget accepts the recommendations. >> supervisor cohen: can't let you go that easily. we have to ask you something. let's see here -- 1.6 budget

increase in year 1, and 1.6 reduction in year two. you have 25.2 f.t.e. increase in year one, but year one, stable. budget changes are driven by tall building peer review. maybe you can talk about that and building entrance reform. >> yes. so, also with the successful business, that's legislation that director heely talked about the first meeting, basically one of our largest programs that we'll implement. we have to reach out to over 25,000 small businesses or businesses throughout, to ensure that they have business entrances, and so we have included additional funding for outreach, for advertising and actually, we have started on that already. >> let me interject here. and in the outreach and advertising, i'm going to make an assumption that it will be in multiple languages. >> yes, all of our outreach and languages. >> and scour every square inch

of san francisco and make sure that all neighborhoods get touched. >> yes. where there are small businesses, we first will start with the database of mailing out information, walking different business, neighborhood business corridors, we will visit what we normally do, go to different language radio stations. we print in different language neighborhoods, comprehensive. >> trick question for you. does this also include cannabis business? >> it can. it's a small business, so it's -- if the type of business does not determine whether or not you are included, it's acceptable, if it's any type of business. >> thank you. appreciate that. sometimes when we think of the accessibility, we are thinking about retail shops or even a restaurant. so i'm just wondering if -- if you've narrowed your search or narrowed the scope as to what businesses you are going to be reaching out. sounds like it's going to be all small businesses, very, very

broad. no one is going to be excluded. >> so the legislation is pretty broad and so we had not heard of any exclusions at this point. now, there will be ways as reaching out and there are going to be different tiers. so, the first thing to reach out to everyone to determine whether or not you are impacted by this or not, so, that's the first thing that we are doing. >> appreciate that. thank you. >> supervisor fewer. >> supervisor fewer: yes, wondering in your budget proposal, are you able to hire more inspectors? >> yes, we are able to hire more inspectors. we have been hiring inspectors, permit clerks and engineers over the past 2, 3 years. we have done very aggressive outreach, and so we will continue to do that. we are right now, i think this month we'll be having interviews for more plumbing inspectors. we expect to be hiring more electrical inspector, as well as building inspectors. in our proposal we did not

increase our budget by 25 f.t.e., to clarify that. actual f.t.e. count remains the same. >> what? >> 275. >> thank you. that's the actual authorized positions. however, because of a number of retirements and vacancies, that's the way we recruit. so, we have vacancies, every month, this week alone, three different interviews, so recruitments throughout. >> ok. do you plan to increase overall number of inspectors that go out, store fronts, code violations? >> the way we'll increase that, yes, by filling vacancies. but we have not actually increased the number of f.t.e., but have capacity in our already authorized budget to meet those increased because we have some vacancies. >> you know, in my district, we discovered 156 vacant store

fronts and i know that that will require for an inspector to go out and see each one. so, i am wondering if in your budget that you might be adding more, not just filling the vacancies, but actually upping the amount that you have. allocated amount. >> well, so if you want to know if we are going to go from x number of inspectors to x plus inspector, yes, we are, but we are not doing that by increasing our normal overall f.t.e. we have capacity, we had vacancies right now. so, yes, the answer is we do recognize code enforcement. we had discussed this before the code enforcement, one of our priorities. and so of course vacant store fronts would also in general so code enforcement, too. so, we are willing to fill positions, we know we have a variety of legislative mandates that have come across that we have to be able to do that with.

>> ok, thank you. any other questions, colleagues? >> supervisor yee: a follow-up question. when you say you have some capacity because you are trying to fill positions, have you been, has the department always been underemployed in terms of not being able to fill positions, or was there a period where you actually had positions filled? because if that's, if the answer is yes, then it seems still, the question that supervisor fewer raises, is also my concern is that even at capacity, if it were at capacity, there was -- there were complaints about not having enough inspectors to do the work that we need to have done in san francisco. >> yes, i understand the question. so, i've been with the

department for the past four years or so and we have not been at capacity. and so that's why we had not requested additional. if you can recall during the down turn, the department had laid off a lot of employees, and we started to build that up by increasing the numbers. and so we have increased the numbers, and so what we have been trying to do, basically using the existing from those increases and filling them. what one of the challenges that we do have, and from this year alone, we had about 25 retirements. a lot of times what we have done in, for instance, on the permit text, also very important was actually what code enforcement and everything else, they are actually scheduling inspections, actually doing all the paperwork. so, for instance, for permit text, we had a variety of permit tech 2's retire, so we had

vacancy, we filled them with 1's, it's a good thing to have promotions, the best to do the vacancy. so, the short answer, we have not been at capacity yet and that's what we are working toward, and getting closer so every year we are able to balance a little bit more with the retirement, versus the aggressive hiring, too. and definitely focus on that for the coming year, too. >> page 19 of the report, recommended reductions, total 803,327 in 18-19. 303598 are one-time savings, allow increase of 445037, or

6/10% in the 18-19 budget. and 19-20, recommended reductions 498013, all of that amount is, our recommended reductions of ongoing savings. the department concur, shown on pages 20 through 22 of our report. >> real quick, reductions from delays in hiring and then also the delay purchase of two vehicles, is that right? >> that is correct, madam chair. >> thank you very much. >> thank you. >> san francisco retirement. >> thank you for coming back. >> good afternoon, executive director for the retirement system. thank you, madam chair,

supervisors. i would also like to thank the mayor's budget staff as well as the legislative analyst staff and helping us work with our budget, i'm pleased to report that we agree with the budget analyst recommendations today. >> supervisor cohen: ok, thank you. i think most of the cuts are from delays in hiring, some from reduction. a question that i asked the director last week, i hope you have the answer for me. >> i don't have the answer. i do know he's working with miss bravelton on that. don't have the information at this time. >> additional cost police officers and the long-term how that will reflect and man test in the pension. again, i think in four years we'll have something like 250

cops fo farrell's budget is approved. trying to finds out what the costs are. >> might have to read off notes to get you the proper detail. but just wanted to assure you, so, within the upcoming two-year budget, the costs of pension-related contributions for the city are included. in the mayor's planned hiring plan, about $22 million over the two years of the budget. for staffing of that, about 3.5 million is related to pension contributions. for future years, going beyond the budget, we make assumptions and coordination with the retirement board about returns and costs and so $2.7 million under current assumptions per year after the budget, and that is included in the cost projections we make. anything beyond that would be subject to, you know, the changes in our returns and any other policies or changes in the

economy. but generally under our current assumptions, it's $2.7 million for the out years outside the budget for pension-related contributions for the city. >> supervisor cohen: that's pretty high. thank you. again on top of what we already are obligated to pay. let me ask a question to the b.l.a. mr. rose. when you make your recommendations, you ever take into consideration the long-term expense or the long-term costs on the pension when we are hiring and bringing in f.t.e.s? is that factored in? >> actually, our -- sorry, madam chair, members of the committee. our budget analysis on the retirement system is consistent with all departments where we would only look at actual expenditures, prior experience, projected. >> supervisor cohen: my question

isn't about the retirement board's budget. my question is more general. >> i see. >> many departments, for example, we heard that the port is going to be making a hire. we heard that, and you reviewed that the airport is going to have, forget the exact number, 25 police officers hired. so, my question is, when you look at the, when you look at the overall budget, do you take into consideration the long-term costs? i know you take into consideration the cost of academy classes, i know you take into consideration the cars and all that stuff. but these people that we are adding to city employment will at some point retire and they will be expecting to draw down benefits. i'm just wondering if there is coordination between the retirement board and the request

for new f.t.e.s. >> the retirement would be accounted for in the, each individual department does project their retirement costs. so that that is included in the budget. in terms of our specific analysis, it would not analyze that specifically. >> so i just want to recognize, at this point we have not heard from the police department and their particular budget. so, i'll reserve the rest of my line of questioning so when this department comes before us. all right. and hopefully i'll have an answer, i'm sure i will, by, well before then. >> i know they are working on it. >> supervisor cohen: yeah, ok. something to constantly think about. all right. anything else that you want to present? >> no. >> supervisor cohen: and i think we heard from the budget legislative analyst on this?

harvey, i think you've already -- you have any recommendation concerns? >> no, briefly on page 59, our recommended reductions total 410332, that's an 18-19, that amount, 50,782 are ongoing savings. and there are one time savings, allow increase of 14,108,150, or 14.5%, the department's budget. regarding 19-20, recommended reductions 45180, all of that, those very deductions are ongoing savings, still allow for increase of 11.9 million, or 10.9% in the department's 19-20 budget. >> thank you very much. thank you. colleagues, any questions? go on to the p.u.c. thank you. and mr. clerk, could you call items 8-13 in conjunction with

the p.u.c. presentation. >> clerk: item 8, ordinance, $340 million hetch hetchy revenue, cap-and-trade, and power revenue bonds, hetch hetchy capital improvement program. item 9, approximately $483 million of proceeds from revenue bonds state of california water resource control board revolving loan fund or grant fund, water revenue and water fees for the san francisco public utilities commission. water enterprise capital improvement. item number 10, approximately 1,000,000,217 million of proceeds from revenue funds, revolving loan fund, or grand fund, wastewater revenue and

capacity funds, wastewater enterprise capital improvement program. 11, ordinance authorizing issuance and sale of tax exempt or taxable power revenue bond and other forms of indebtedness, not to exceed $154 million, item 12, ordinance authorized ordinance of tax exempt or taxable water revenue bonds and other forms of indebtedness by the san francisco utility public commission and not to exceed approximately $478 million. and item 13, ordinance to authorize issuance and sale of taxable wastewater revenue bonds and other forms of indebtedness by the utilities commission, not to exceed $987 million. >> supervisor cohen: all right, thank you, appreciate that. items 8 through 13 really are

authorizing revenue bonds aan associated appropriations for the capital projects for water, power, sewer at the p.u.c. they total, i think with power, specifically hetch hetchy and the cap-and-trade, $340 million. for water, $483 million, and then wastewater-sewer, 987 million. so, why don't you share with us. thank you. >> i have a few comments. chair cohen, committee members, eric sandler, c.f.o. of the p.u.c. so, the six items before you, 8-13, relate to our two-year capital budgets for the enterprise, hetch hetchy water and power, water enterprise and wastewater enterprise. and last week the general manager reviewed a number of key capital programs and i discussed the vetting and adoption process and review process of the

c.i.p., included the commission review, and the capital planning committee. in terms of a summary of the appropriations, hetch hetchy water and power, $350.02-year appropriation. some of the projects are the mountain tunnel project, rehab, and investments in local distribution assets. water, $483 million, 2-year appropriation. the project funded, completion of the water system improvement program, and then replacement projects such as pipelines and pump stations and water mains. wastewater is $1.2 billion and that is primarily s.s.i.p. phase one, as well as replacement of sewer mains. and r and r generally. so, items 8, 9, and 10 appropriate the sources and the uses for the capital plan. and items 11, 12, 13, authorize

the issuance of revenue bonds or other forms of indebtedness to fund a portion of those three capital programs. in addition, item 13 also authorizes the issuance of revenue refunding bonds, in case we can refinance our debt. debt is one of the largest expenses, and provides us the flexibility to refinance debt should it be economic. >> supervisor cohen: thank you, approach your presentation. let's pivot to hear the budget legislative analyst, if there are any thoughts. particularly interested in hearing from you and also from you, the p.u.c. presentation last week indicated that there were 13 new f.t.e.s and the b.l.a. report has it at 36.26.

so, i don't understand, maybe you can reconcile this for me. >> i think in those reports we don't actually look at the staffing in terms of the capital budget. that will be in the report. so, i want to go over these items, 8-13 briefly. we do spell out for each of them, an approval of bond authority for the hetchy power revenue bonds. for the water enterprise and the wastewater enterprise, and each of them, a capital appropriation. and i will not go over those unless you request the information, but some general points. p.u.c. does have a debt coverage policy for issuance of the bonds. all of them fall in that existing policy. in terms of power revenue bonds, there is a rate increase that would apply to covering capital and operating costs for hetchy

power. the increase redo summarize on page 12 of the report, general increase on electricity rates, general fund departments, half a cent for kilowatt hour, half a cent increase. in terms of the increase in water rates and sewer rates, this is for capital and operating costs to cover both the water enterprise and the sewer, wastewater enterprise. for the water, on page 19 of our report we say that the, there's combined water and sewer bill. average residential bill is about $106, $48 is water, and 58 is sewer. approval of the bonds and the operating expenses for the water enterprise would increase those by about $4 per year in 18-19,

and about an additional $5 in 19-20. we summarize it on page -- wastewater, excuse me, on page 27, against the combined bill for the sewer rate component. increase by $4 in 18-19, and 19-20. impact on the rates for these. in all three pieces with 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.

>> good afternoon, everybody. welcome to the tuesday may 22nd meeting of the san francisco public utilities commission. role call, madam secretary. while you are getting that, i'll let you know that the items 16 through 21 on closed session will not be heard. placed on the june 12th agenda.