what is the income range? i think that is being worked out. that will involve further discussion with future developer. >> what is the time line we're thinking so we'll know when the range? >> i'll let dan speak on that. >> supervisor walton: thank you. >> thank you, dan adams, acting director. so as mentioned, we just acquired the site and ensure that we're able to pull it off the open market and then we

would start to do programming in more detail. the case for senior development. and so that will be our inclination, but it will come post acquisition and be part of the programming process prior to issuance. when we get on board, they can

run economic models. some of the refinement will happen after the procurement process. >> so guesstimated time line? >> you know, we've got a queue now of r.f.q.s, so i would say ideally summer or fall, we're issuing an r.f.q. for this property. >> let's hear about the b.l.a., please. >> good afternoon, chair fewer, members of the committee. the proposed resolution would allow the city to purchase 1939 market street for $12 million, place the property under the jurisdiction of the mayor's office of housing and community development, find that the acquisition is consistent with the city's general plan and priority policies of the planning code, authorize the director of real estate to execute documents related to the property acquisition, including

leaseback agreement with the seller. and affirm the planning department's determination that the purchase is exempt from review under the california environmental quality act. the property at 1939 market street is a two-story office building of approximately 12,050 square feet. the mayor's office intends to purchase the property and convert it to affordable housing. the affordable housing project get financing and ground lease will be suggest to board of supervisors' approval. under the proposed purchase and sale agreement, the city would pay $12 million to acquire the property. the purchase price is consistent with the appraisal and review that were completed by an independent third party appraisers contracted by the real estate division as required by code 23.3. under the proposed purchase and

sale agreement, the city would enter into a leaseback agreement with the sheet metal workers association. for $5,000 per month for 24 months as shown in exhibit one on page 3 of the report. the leaseback period would allow the mayor's office of housing of community development to find a developer to convert the property from office space to affordable housing and no material changes to the property would occur until after the 24-month leaseback period. the city will assume responsibility for the existing leases with the current tenants and enter into a leaseback agreement with the owner. the estimated annual rent is $308,000 as shown in exhibit 2 of the report. the lease is would terminate the end of the lease by 2022, resulting in lease rent to the

city of over the two year leaseback period. the source of the $12 million of purchase is excess education funds, or eraf. the leaseback is $221,876 as shown in exhibit 3 on page 5 of the report. and we recommend approving the proposed resolution. >> supervisor fewer: thank you very much. supervisor mandelman? >> supervisor mandelman: i just wanted to take a moment to thank the mayor's office of housing and community development, the division of real estate and the mayor herself for their commitment and work on the project. district 8 has the dubious distinction of having the second highest rate of no fault evictions. we have a lot of displacement happening second only to district 9 and yet there is a

real challenge in trying to get affordable housing built in district 8 because we have a scarcity of vacant lots and pretty high land values. i want to thank you for your creativity and swiftness in responding to this opportunity. there is a model for this just across street, open house, 55 and 95 laguna has developed two buildings along with mercy housing that are senior housing. between those two buildings have opened 119 units. they have a 3,000-person waiting list for units. so there is tremendous need. and just to say a word on the need for lgbt affirming senior housing, i think one of the things we've learned from data in the early stages is that if

for the lgbt community, and other minority communities, if we do not focus on getting resources to particular communities, they will be left out. and so i think for low-income, lgbt seniors in particular, folks who may have h.i.v., are often in rent-controlled units now. trying to have resources available so when those folks are displaced, if they are, they do not at the age of 70 have to find a new home, probably not in san francisco. that's pretty important. i want to thank you all for sharing that conviction and looking forward to bringing on lots more units of affordable housing in upper market. so thank you. >> can you -- do you know how many units do you think we'll build on that site? >> i'll let dan answer that.

>> we haven't yet done a detailed yield analysis, but we estimate 80-100 units based on the current zoning. that will vary depending on the actual unit mix we arrive at. again, once we do our rfq we'll bring on architects do a more refined yield analysis. >> supervisor fewer: when you are doing the rfq, are you going to also list projected levels of affordability? >> we would generally -- yes, we would give a prospective applicants the range we anticipate and we always have discretion then to look at creative models to do something other than prescribed. we would have a range of incomes included in the r.f.q. would be typical for us. >> so then piggy backing on supervisor walton's question,

what is that range that you would put in the rfq? >> again, i don't have that range today and we want to work, obviously, with the mayor, the board of supervisors, certainly supervisor mandelman, on really crafting the target population. i just want to affirm what i said earlier, that when it comes to senior housing, the acuity of need for very low and low-income seniors is paramount for us. what can be challenging with that population is having rent subsidy necessary outside of our program. so what we want to do is pair extremely low-income units with a source of rent subsidy to get the income levels as low as possible. >> supervisor fewer: that's our desire too, and we're hoping for racial diversity also in this development. and so basically, what we're doing here is land banking a piece of property, the opportunity to obtain -- to

attain. i'm wondering, how does this factor into the queue for affordable housing. we know there are projects in the queue. does this take precedence? >> no, we incorporated into our pipeline. one, we were blessed to have money in the eraf of this scale. and we were fortunate to pass a $600 million housing bond which includes $150 million for seniors. so we see this as a potential -- as a future senior development being able to access that $150 million trench of senior funds. i would hasten to add that we just closed a notice of funding availability for acquisitions primarily on the west side. we're excited to have a property come in your district also proposed to be a senior, which

would be also be part of the pipeline. we're underwriting and looking at that proposal now. but the proposed development at 1939 market street would just be a part of a cohort of properties that we're moving forward as part of the pipeline. ideally, we're able to -- our preference and it's true for the nova, our perreference is to acquire sites and move those into affordable housing. we intend do that with both the properties, as we're intending to do with 1939 market street. there is no property that is being bumped because of this acquisition. >> supervisor fewer: hmm. let's open up for public comment. >> could i? >> supervisor fewer: supervisor ronen. >> supervisor ronen: thank you so much. i had a general question, not about this specific item, but

related to this item. when does mohcd decide to issue rfq for the purchase of a property as opposed to waiting for a nonprofit developer to purchase the property and then issuing an rfq for its development? >> so in many ways it depends on the way in which funds come to our office. so i'll use -- i think these are two good examples. one is this proposed acquisition at 1939 market street. through the eraf allocation, there was a line item that was intentional for an acquisition. as part of the conversation about diversifying our affordable housing across the city. and so we had money in hand and there was a property that met our qualifications, namely, in quote, unquote, underserved district as supervisor mandelman

mentioned, a place with high displacement rates, and one which fit within that budget allocation. and a situation in which if we did not move quickly, the property would be sold on the open market. so we used our discretion to act directly in the acquisition of that property in order to meet the policy goals that aligned with funding that we had already been allocated. in the case of the notice of funding availability that we just issued, that was also prescribed in the bond. we had the time then to prepare a formal notice for execution and for promulgation. that's our preferred mode of working. we would prefer to work with our nonprofit partners who are out in the community scoping sites, working with brokers.

we don't have a lot of infrastructure for that in our office. so it's something that we do opportunistically, and generally, rarely, to do a direct purchase. but in this case, because of the allocations of the funds we had in hand and the alignment with stated policy priorities, and the coincidence of scale of funding and price, we thought it was very important to stretch ourselves and make this direct acquisition. >> supervisor ronen: and who is -- who gets to make those decisions? is it you? the mayor? i mean, certainly board doesn't get to weigh in on the decisions other than approving what is presented to us. >> it's a combination of those. our office typically has had some amount of discretion to where there is funds available to make that acquisition. a similar case is in your district of 1515 south van ness,

for instance, we had an allocation from mtc that had a gee graphic requirement. because the deadline for the expenditure, we acted quickly to acquire a site on the market. and it's helpful for us to have that discretion to be able to be opportunistic in a market that doesn't always work for a nofa to be issued or rfq to be issued. it is obviously always in conversation with the mayor. and always in conversation with the supervisor in whose district we're looking at making an acquisition. but there is discretion that our office exerts in order to take advantage of those opportunities. >> supervisor fewer: supervisor walton. >> supervisor walton: real quick. did i hear you say that our

request for the r.f.q. are going to come from nonprofit developers? >> i'm not sure i said that, but our r.f.q. process requires the participation of nonprofit developers with a local office here in san francisco. that will be part of the r.f.q. process. >> supervisor fewer: okay. thank you very much. seeing no other comments or questions, i'd like to make a motion to move this -- excuse me, i'm sorry. >> madame chair, would you like to have public comment? >> supervisor fewer: i thought i did already. public comment on item number 1? >> supervisors, nobody has the time to come to your budget meeting most of the time. and if they did and were given an opportunity, they would have come. so we have to look when we get a property like, to listen to the

mayor's office of housing development workforce, because they're not very reliable. that's putting it mildly. we need to look at a model where those who are adversely impacted first are housed and then look at the future where similar people who are impacted are not -- do not leave the city, but accommodate it. and what is happening all over the city is, they use taxpayer money to buy the land, high density housing. they have a program called dahlia which god knows how that works. it has to be audited and this has to be audited too. there is a lot of corruption in the city and we need to put an end to that. and we need some of the supervisors who have their heart

in the right place to do a needs assessment on the condition of our people. there are too many middle class people dying on the streets of san francisco. no consideration is given to that. talking in generalities, they're going to build this. it's not going to come under rent control, so that means we don't know what. and no timelines. no good model and they don't consult those experts who already doing but on a smaller scale. thank you very much. >> supervisor fewer: any other public comment? seeing none, public comment is now closed. i would like to move this to the board with a positive recommendation. i can take that without objection? thank you, colleagues. madame clerk, any more business before us today? >> no there isn't. >> supervisor fewer: thank you. do i have to adjourn this meeting to enter into a new meeting or can i just transition

into the budget and appropriations committee? >> it would be more appropriate to adjourn this meeting and then open the budget and appropriate meeting. >> this meeting is now adjourned. colleagues, i'd like to open the meeting of the budget and appropriations committee, meeting of wednesday february 5, 2020. it is the first meeting of the committee this year 2020. i'm chair fewer. madame clerk, can you please all item number 2? >> item 2 is a hearing to review the joint report for general front operation by the controller's office, mayor's office and the budget and legislative analyst entitled

five-year plan update. >> supervisor fewer: thank you very much. we have kelly kill patrick here. >> thank you for having me. i'm the mayor's budget director. i will walk you through a presentation that is both a summary of the five-year financial plan we published as a joint report with the controller's office as well as the budget office. as well as an overview of the budget instructions that the mayor issued to departments on december 16. i'm happy to answer any questions that arise during the presentation or at the end. >> supervisor fewer: thank you. >> i'm going to cut to the chase here. the projected two-year deficit for the upcoming budget cycle is represented on the far right side of the slide.

it is approximately $420 million two-year deficit. you'll notice to the left-hand side are the last five two-year projected deficits and this deficit is meaningfully higher, especially than we've experienced in the last two years, where the deficits were about $270 million each year. why is that? the quick and short of it is that the rate of revenue growth as projected by the controller's office is slowing. and so the revenue is growing at a slower rate, while expenditures continue to significantly outpace that. that is represented. the expenditures are represented by the blue line growing at about 17% over the pro-approximate genetics -- projection period while revenue is projected to grow at 7% over the course of the five- --

four-year projection. later in the slides, i will walk you through the trends and reasons why that revenue gross is projected to slow. we also have the controller's office who can speak to any questions you might have about the revenue projections underlying the deficit. at the same time we have a steeper deficit than we faced in recent budget cycles, the mayor is also laser focused on addressing the challenges we face with those struggling on our streets. she's more focused more than ever on addressing housing shelter and services for those in need, ensuring that we have clean and safe streets for everyone. and working towards healthy and vibrant neighborhoods. to that end, she instructed departments that we both need to focus our resources and re-prioritize funding to meet pressing needs so we can provide assistance to people on the

streets. be responsive to residents and support the city workers out there trying to make a difference in these areas. so with that, i'll dive a little bit into the five-year financial plan. we call this one the joint report update. every other year we do a four-year update to the five-year financial plan. so the joint report assumes that this is -- if the city's budget were on auto pilot, we didn't make any other corrective changes, what would our shortfall be? it assumes revenue structures as well as policies and programs as they exist now. not assuming any large policy changes. what would the deficit be? of course, the mayor and the board are charter mandated to present a balanced budget and so

we must make tradeoffs and choices over the next couple of months to bring revenues and expenditures into alignment. the controller's office provides revenue projections that show continued tax growth as i showed on the previous slide. other assumptions within the report include salary and benefit costs consistent with contracts negotiated over the last two years. we assume inflationary growth on the open contracts and the contracts expire. inflation is calculated by the controller's office as the average between the california department of finance, and i forget the second one, but it is a reputable source, and it averages 3% for four years of the projection. then finally, we assume benefit cost increases in alignment with both spurs projections as well

as the health market cost changes as estimated by the health service system. finally, for city-wide and departmental costs, it assuming debt and capital expenditures in alignment with the capital plan as well as continued support of the ihss, in-home social service workers program, as we've born additional costs over the last three years after a funding shift from the state. those are all included and drivers of expenditure growth over the deficit. one that i think is not included in the deficit, is eraf, the educational revenue anticipated fund. we are expecting that we will receive fiscal year 20-21, eraf. but we also assume that it will be equally spent in accordance

with the legislation passed by the board and the mayor last year, which assumes half of the discretionary revenue will be spent on -- sorry, half will be spent one time and half will be spent on housing. and so we assume equally offsetting revenue and expenditures which wouldn't impact the forecast. the estimated eraf levels are outlined in the five-year financial plan. we anticipate about $230 million in fiscal year 20-21 of which $180 million would be discretionary and allocated in accordance with the parameters i just shared. this is getting under the hood of assumptions, just to show you the driving revenue. that first line, sources, increase and decrease, do show

that revenues are increasing over the course of the projection. but at a slower rate than in prior years. you'll note there is a big jump in fiscal year 21-22, a big driver of that is what we call fund balance. the end of each fiscal year, any revenue over budget, higher than anticipated or any expenditure savings that we have at year end that balance, we take that one-time balance and apply that to the future year deficits. we spread that over two years. so it creates a peak in the second year and the projection and then of course it then creates a decline in the third year, you'll see the $290 million because it's a one-time source. you look at the uses side, you see that the largest share of cost drivers over the four-year horizon are related to salary and benefit costs. those are wage increases, pension, as well as health care costs.

i'll note too that city-wide operating budget costs are growing over the projection period. that is largely driven by the actualization of many of the capital programs the city has committed to and the various debt tools, including certificates of participation for 49 south van ness, the city's one stop permit center and the seismic land safe and all capital projects that have debt costs that are assumed in the capital plan. we're filling the costs in the projection. for departmental costs, ihss is the biggest cost driver here. all that to say, this is how we get to the $420 million two-year projected deficit. if you have any questions about further details, there is a much more detailed report in the five-year financial plan. happy to direct to you the appropriate pages or answer any questions today if you have them.

>> supervisor fewer: excuse me. >> supervisor ronen: is now the right time to ask questions? >> happy to try. >> supervisor ronen: so on page 4, sorry -- page 3, the projected deficits over the last six years? what was the actual deficit in the last five years? >> so we're term mandated to balance by june 1st. so we always make projections starting in december. and this is auto pilot. if we took all of our expenses as they currently are, where do we think we'll be? and over the four months between when we issue that and budget, we have to bring those into alignment. either revenue or expenditures have to change. >> supervisor ronen: sorry, got it. good point.

what was the difference between the six-month projection and the three-month projection in those five years? >> the controller's office makes six month and nine month updates of current year-to-date. >> supervisor ronen: we get another -- we get an update to this projection? >> yes, sorry, you're right. so we issue the five-year financial plan in december or january. and then we issue a march update. and we're working on that now. and there will be one. it has come down over the last couple of years. i'm not sure, it's a steady march toward zero, i just don't remember the magnitude. >> supervisor ronen: because the updated report we get in march, that's before we take any action as well. >> correct. the two digest drivers of the six-month and nine-month report that affect the deficit, they're both current year projections. so the first is there any departmental revenue coming in

higher than budgeted or projected savings? we take that, either savings or revenue, and we get that balance and apply that in march to help reduce the deficit. the other is the controller's office. it is an opportunity for them if they think they have enough data to update the revenue projections. they can update at 6-month or 9-month if they three are changes based on the current year to update the ongoing revenue projections. it's not guaranteed. they like this see the year-to-date that would update the projections. >> supervisor ronen: with the march revised numbers, could we get what those were so we can compare? >> i can do that. i'll come back to you with the march update and do a presentation, or i have in the past. and so i'm happy to provide to

you a similar slide at that point. i can do it before hand as well. of where we've been at march each time, too. >> supervisor ronen: that would be really helpful. and then just question on page 7. the -- can you -- do you have a sense of how much we project our health costs, employee health costs to increase for the next coming years? >> the average over each of the four years is 6% per year, which is double the rate of average -- consumer inflation. it's in alignment with medical inflation that we see nationwide. just the cost of providing medical services and care is significantly higher. so the projection assumes about 6% per year. >> supervisor ronen: and then is that -- is it higher in san francisco than other places?

>> i can't speak -- >> supervisor ronen: northern california than other places? >> i mean, it's an assumption based on negotiations that the health service system makes every year. this is their best assumption based on both local and regional trends. we can ask the health service system what we might be seeing statewide, but it is my sense it's in alignment with the nation united states. if it's possible to see if this 6% projection is in line with or higher -- i'm assuming it's not less -- than you know, southern california or the nation, that would be helpful. >> we can work with the health service system to get that. >> supervisor ronen: that would be great, thank you. on slide 9 -- this is a along the same lines, the salary and benefit line, what is the breakdown between salary and benefits there?

>> that is -- i'm sorry, i have a table. i don't have my folder with me. it includes the wage increases as assumed for employees which -- which was negotiated about 3% base wage plus additional related to that and then it assumes purse costs, which we have a breakout in the table. i'll tell you which page the table is on, as well as the 6% for health benefits. so it's all three of them, wage, pension and health care costs. and i don't readily know offhand, but we'll get to the more detailed summary we have in the perform, it breaks down each of those three lines for you. >> supervisor ronen: okay.

it is on page 11 of the report. and it breaks down each of those four lines for you in terms of millions of dollars. wage increases are the highest among those. >> supervisor ronen: thank you so much. >> supervisor walton: thank you for the presentation. just a quick question. can you remind me how prop c, prop g are captured in this report? >> you bet. so prop c, the two prop cs and g are not factored into these projections for two reasons. one, each of the revenue sources is expected to have expenditures that equally offset it. so if the revenue comes in, there will be new expenditures, so it won't impact the deficit. additionally -- >> supervisor walton: quick on

that, because i know that there are expected expenditures for the resources and that's because there are dedicated to go in certain areas, correct? >> correct, the ballot measures are very prescriptive and outline detailed what the new expenditures must be allocated towards and so the new revenue is dedicated toward those new expenditures. >> supervisor walton: which means resources from the general fund would be allocated somewhere else? >> to the extent perhaps that general fund is helping to support new initiatives, but there is some -- i imagine there is some supplanting. i don't recall the exact language of the prop cs and gs, but there is rules you can't supplant existing general fund spending. i don't know. maybe to the extent we've made choices to add money, it might

offset that, but i'm pretty sure they have specific non-supplanting. and michele can speak to that. >> michele, controller, correct, supervisor, that both of those measures which are special purpose taxes, they do require the controller office to measure a baseline of general fund spending and maintain that apart from the special revenue fund. >> so all that wonkness to say, i don't anticipate general fund savings should the new revenues be deemed eligible to spend by by the controller's office. >> supervisor fewer: president yee? >> president yee: to this question, it might be -- i might have a difference in opinion.

it's a slight difference. there is pieces of the eraf money that was allocated to help with g and c, and that our agreement was that if it got out of court, we would repay those funds and it would go back to general funds. so i believe there could be a savings. >> that is really helpful nuance, you're absolutely correct, supervisor. through last year's appropriation. that is what i was alluding to, but not as articulate. there was specific language for prop c and prop g, eraf money would be repaid, you're absolutely right. >> president yee: so, this projection that you have with

the deficit does not -- i guess that question was already asked earlier. if we were to continue to get eraf, that would lower some of it in terms of the gap. >> i would say we don't assume any of the revenue in the deficit projections to help offset those assumed costs. given the magnitude of this deficit, the mayor has indicated to me, you know, there might be an instance where we would have to use eraf to bring down the deficit, but the intention is we would like to support the expenditures to support housing, homelessness, behavioral health initiatives and child care which are all really important. so the assumption is those get spent on new expenditures, we'll see if we're able to hold fidelity to that given the size of the deficit at the time. >> president yee: in this revenue project, even though

it's not a real big chunk, but it's still a chunk, they sold one building recently for one chinese corporation to another chinese corporation for a billion dollars or something like that. and that would bring in about $25 million or more if we have several of those. i mean, are those numbers reflected in the current numbers that you have now? >> michele is best to speak to the way that the controller's office projects property tax and transfer tax as related to the sale of new property. i'll leave it to her. >> the ocean-wide transaction, that is a current year transaction and there are other large ones recorded this year, levi plaza and transamerica, those revenues from those transactions, the transfer tax will all be shown in our six-month report which we hope to issue next week.

so you'll see a big variance in transfer tax due to those extremely large transactions. most of those will flow into reserves because they far exceed the five-year average of transfer tax. and we'll have more detail about those in the report next week. but those are all current year activities. so they do not yet have any direct bearing on the future forecast, because we don't assume that those -- that magnitude of those kind of sales which are really historic, we don't assume all of those would continue at that level. >> president yee: i don't either, but whatever the amount, $25 million that haven't accounted for, could reduce some of the projected deficit by $25 million is what i'm saying? >> it will go into a budget stabilization reserve. >> president yee: all of it?

>> 75%. and approximately 20% is pledged to baseline. so the m.t.a. and other general fund funded baselines will receive their portion of it. and there will be a small increment remaining. >> president yee: thank you for the explanation. this is more of a general question because as we move forward in this budget process, and the instruction to the departments is to reduce their expenditures somewhat to balance off the budget, and then we vote on a budget eventually, and it's balanced so we wouldn't have a deficit. and then through the budget year, do revenues come in for the current year of that budget

year? and what happens to that money? i mean, does that -- does it mean that some of the stuff that were cut can be replaced by spending the new revenue that you didn't account for? >> i can speak a little bit to the mechanics of it, supervisor. in our six and nine-month reports to the extent that revenues are coming in at a higher level than we expected, we'll report that as additional fund balance. that will be available at the end of this year. and it will be included in the appropriation ordinance that is approved by the mayor and board. so you will have spent the good news from the current year as much as it is known at the end of may in the budget years. >> president yee: so in other words, let's say that our budget

year for 2020 -- what year is this -- 2021, once we approve the budget and 10 more buildings sell, whatever it is, we get new revenues during the fiscal year, we can't touch that until the following? -- the following budget year, is that how it works? >> that's how the mayor and board have typically approached it. because you're not just looking for the good news in one source, you have to see the pluses and the minuses in revenues and expenditures across the entire city. that's the ending balance that you're looking for, so you can't point just to one number to know what the net fund balance is going to be at the end of the year. you need to know all of those things. at the six-month report and nine-month report, to the extent

that it's known, and we can see it in our receipts, we'll be reporting that to you. and the mayor will be including as a source in the proposed budget as soon as we've reported it. source for the following year. >> president yee: okay, yeah, so it's for the fund balance for the following year. okay. >> supervisor fewer: i have a question, along the same lines. so if number 3, we see that fiscal year 18, fiscal year 19 there was a $402 million deficit. and so how is that resolved? >> throughout the course of the year, i think i would say it's kind of a threefold. two of the pieces we've discussed so far. it's current year revenue or expenditures coming in higher or lower than expected contributing

to fund balance. the second is any revenue updates from the controller's office. in the past those have been helpful, but you can't take revenue projections from one year and apply them to the following year. i'm not sure what trends the controller's office is seeing in revenues year to date, but in the past that helped solve the deficits. and then also containing costs. trying to hold back inflationary pressures on service contracts, materials and supplies, and health care costs had come in slightly lower than in the past. or debt service had been delayed. so it's a multitude of kind of factors that have to play out over the next four months on those kind of three main factors i would say. >> supervisor fewer: because deficits, they often improve

after may that we look at it and we think it's a big deficit and then come may, we see after they have shrunk considerably. so i think my question to you is, is there a structural deficit? what are some of the assumptions? i also think -- not to quote a republican, but it turns out sometimes to be sort of a nothing burger quite frankly. so is there structural deficit? >> in terms of the structural deficit, we have committed to costs that are growing at a faster rate. that's a given, right. our pension costs, our health care costs are all growing at rates faster than the rate of the revenue growth. i think over the last couple of years, the revenue has come in much stronger than people had anticipated. and that's really happied over the last -- helped over the last three years. we've had a strong regional and

local economy and that's really helped us. i think what we're seeing in these revenue projections is that anticipation that it can't continue at the hot rapid pace it has been. you know, actually through that, in my second presentation on the state and federal budget, some of those similar trends are reflected in the governor's budget too for the state of california. that revenue is continuing to grow, but at a slower rate and that has been helpful in closing the deficits over the last couple of years. >> supervisor fewer: seeing no more questions or comments -- >> i wasn't finished, but i'm -- >> supervisor fewer: sorry, okay. >> i'm happy to go through at a faster pace.

some of the trends we're seeing driving the structural concerns we want people to three about, reliance on fund balance. the soaring rate of growth for interest rates are driving the slowing revenue growth projections. we have growing employee costs and there are ongoing cost commitments that are included in the city deficit that are big cost drivers. we've committed $50 million a year for free city college as well as the cost to support the minimum compensation ordinance. i'll remind where we're at in the economic cycle. talk about city-based and just a reminder that voter mandated baselines make up 25% of the city's general fund. $1.5 billion is prescribed out of the $6 billion largely going to the mta and children services. so the fiscal outlook detail. here's what we're seeing and the

controller office is basing their revenue projections on. if you look at the table at the top, you see the vertical bar dividing the middle of it. the three-year to the left of that bar are the actual general fund revenue numbers that we see from the three prior fiscal years. and the growth rate represented on the second line is the year-over-year growth. fiscal year 16-17, actual revenue was 9% higher than the prior year. but you'll notice while that is really high, that the trend is actually growing at a declining rate. so instead of 9% the following year, while still strong, it was about 8%. and then the year after that, it was just 5% higher than the prior year. the controller's office, you notice in fiscal year 19-20 is still showing growth, but it's not at the same rate, bond then the resumption to normal rates of growth in the projection

period compared to other years. what are the drivers of that kind of declining rate of growth? the first is interest earnings. when we made our revenue assumptions in the last budget, the fed had increased the interest rate. as a holder of large cash sums, the city has a lot of cash that we have in bank holdings, we assumed revenue as a result of those interest earnings. now that the feds have cut the interest rate, we're actually going to anticipate lower revenue from those cash holdings. it's significant. about $70 million change in the first year. and then the other biggest driver is business tax growth. that is what i was kind of alluding to earlier, what you can see on the slide, we had seen exponential growth in the last couple of years and there are believed constraints to the rate of growth going forward. and then we are anticipating

current year strong transfer tax returns as president yee discussed a bit, but we're assuming they return to historical averages in future years. any questions about revenue? michele and her team really understand the details and happy to have any questions that you have there. >> president yee: question. the three years where you show actuals from 16-17, and so forth, i'm just curious, this is more curiosity, what was the projected for those years, versus the actuals for the three years? >> i don't know if michele readily knows the percentage numbers, but we might have had

the actual budgeted numbers. >> we can certainly get that for you if you'd like to see that. i think if memory serves, 16-17 and 17-18 were the peak years with the assessor closing down their multiyear backlog. so a lot of that, probably a couple hundred million is escape revenue from getting those older transactions on the rolls and issuing bills for the back years. that's a couple hundred million of the difference at least. a lot of it also is business tax revenue. so we're changing from a payroll -- phasing out payroll, phasing in gross receipts and some of the revenue came in higher than we thought. frankly, we had faster revenue growth than business tax. >> president yee: maybe i'll ask differently. thank you for that information, but just again, i'm wondering if there is a pattern in terms of how we project versus actual in the last few years.

let's say last year's turned out to be 4.9% in actual growth. and for that year, what was the projection? do you know? if it was 4.9? higher, lower? >> i'm sure it was not that. we projected at different points in time, we can get that for you and say this is where the budget was six months, nine months and year end. happy to provide that. but it was definitely -- i mean, big picture, we've underprojected -- we've been surprised by some of the strong revenue growth in the past few years. and we report on that throughout the year as we're seeing it coming in. >> president yee: okay. again, i understand. we're going to be more conservative than not when you make the actual projections, so

i just want to see if there is a pattern we're underprojecting by 2% that, could tell me something. >> really depends on the revenue source. there is a lot of things that go on independently of just economic trends, secular trends. and i would point to property tax. it's entirely the pace at which a department and the staff are -- the order in which they're enrolling properties and the value of those things that they're enrolling is driving the revenue, so to the extent that you know what backlog they're going to work through in a period of a few months, you can bank that. to the extent that you don't know that, which you probably don't know exactly what is going to be when you're preparing your budget, that's the kind of thing that materially affects our revenues that we may not know when we're budgeting. >> president yee: maybe sort of

related, but something different. the first meeting i think of all kinds of stuff. almost every department that comes into my office and start talking about their budget and staffing always claims they're like way, way understaffed compared to the number of ftes that they are staffed up to and the budget reflects the higher number. and they're 100 staff members short. so in many ways, when we're asking these departments to cut 3%, or whatever, it almost has no cut at all because they never seem to be able to hire enough people to fully spend out the budget anyways. i'm just making a statement. >> i think there is two kind of factors related to staffing levels.

one is just the labor market. it's really tight labor market right now. thankfully, lots of people have jobs, but it's also harder to recruit, especially in specialized areas, police, d.p.h., fire. secondly, i think that you're touching a little bit on the also kind of legacy of budget choices over multi-years where departments have added positions but not added new salary dollars because they've re-prioritized the type of work they want done. and this is the whole conversation about attrition savings and i promise we'll work over the next four months to have a shared and collective understanding and be talking about that in a similar way. >> it's even more than that when mta says we can't hire 100 bus drivers, if they cut their budget by three bus drivers, it

doesn't cut anything is sort of my point here. you know, we could all scream and yell and say we're losing 3%, in reality, a lot -- not all departments, but many of the departments, the larger ones, they actually lose nothing. >> supervisor fewer: okay. supervisor ronen. >> supervisor ronen: i don't know if the method that you used to project the deficit is too complicated for more simple minded supervisors to understand, but i would love to try to understand that underlying, you know, formula that you use, because, like president yee, have the impression that we always start the budget process doom and gloom. and then it gets a little better when we get the march report. and then we get like some

surprise news! you know, it's the same thing every single year. and i get that these are not exact figures. they're a projection, you have to make assumptions and those assumptions change. i also understand that it's probably prudent to be a little more conservative than less conservative. but it has felt in the years that i've been at city hall, aside from the really bad deficit years -- that was completely different -- but for the years we've had growth, it felt like exaggerated doom and gloom at the beginning of every budget process. part of it, i would love to understand more of the methods that are used and i'd like to compare over time the difference between projected and actual. both the question i asked and president yee asked, just to have a sense of what that looks

like. and then also among the same lines of questioning of president yee is where -- where the salary savings has been every year in each department. because it also feels like -- i understand this, too, but i'd like to know what the tricks are of every department so that they don't have to make cuts every year. the unexpected, you know, whatever savings that they've had that they used to fill that gap, which they all do, and which i understand that you want to protect your department and the work of your department, but it would be great to have some charts that show us that over time. so that we are a little bit more educated when we're making judgment calls about how we feel about these projections et

cetera. >> i appreciate those notes. we can work with chair fewer and the controller's office on maybe pulling together information from the city's the comprehensive financial report that shows year end where our financial statements have hit against budgeted and annuals. and also the six month and nine month report, coming up with ways to sympathy size what is in there. so we can synthesize what is in that report. >> supervisor ronen: thank you. >> supervisor fewer: thank you. are you finished? >> i can speed through. if you want me to jump to -- i can do it quicker. slide 13 demonstrates just that we have two really volatile revenue sources, the blue is our estimated transfer tax revenue.

you see how cyclical and dependent on large property sales that takes. and our reliance on one-time fund balance. our current budgets have significant assumptions to those two volatile revenue sources. and the troughs on the far left-hand side show how much they drop. i've talked about rising employee costs. we talked about health benefits as well as pension costs. we're seeing increase in anticipated pension costs for our city contribution and the projection of growth, this peak green dot here, it's additional $40 million due to a multitude of factors. that have led to just a continually increasing city contribution to the city pension costs. the drivers i show here are on the right-hand side. i will say that we see, what i've called an optimistic downward green tail, that

assuming that we would hit our assumed rate of return, 4.7% on the nose every year for the remaining four years of the projection. you'll see the blue line, it's increasing costs for the three main reasons listed on the right. we have reached the longest economic expansion in modern u.s. history on the far left side. the city financial projections do not predict a recession, but we do just remind people when one does come, all of those factors i just discussed, pension costs, reliance on one-time fund balance, recession would make it even harder to overcome the deficits that would be as a result of that. so given that financial picture, what were the instructions that the mayor gave to city departments? i've already iterated and shared with you the mayor's policies

priority and addressing the crisis for individuals struggling on our streets. so what did she instruct departments to do as a result of that? first and foremost, demonstrate the effective use of existing funding. building on our efforts from last year. especially new initiatives. accountability and equity plans. and then the instructions she gave to help balance the budget, what we call target, efficiency and reduction proposals. we require all departments that receive general fund support -- that is just the 6 billion part of the budget -- this target reduction does not apply to the airport. they have to balance their own budget. and that is 3.5% growing to 7%.

the mayor was very clear on her instructions to departments. that these are proposals that we would like to understand and ask departments to help us seek solutions that prioritize core functions, minimize service impacts and avoid layoffs. and the target reduction and efficiency proposal don't mean cuts necessarily. we're asking departments to help us use city money more efficiently and provide us with ideas they have. are there additional revenue options? could they apply for grants? could they review service contracts for potential savings? could they streamline programs using lean principles? could we pilot other creative solutions to reduce costs? this is not an across-the-board cut, it is asking departments to come to the table and help us condition contain the cost

growth we're seeing so that we can balance the budget. in order to also help contain costs and bring the budget into balance, the mayor instructed general fund departments to not load new general fund supported positions in the budget system during that phase. just given the cost of new employees. and not to load budget enhancements during department days which is happening right now. the mayor for any new general fund supported positions or discretionary spending that could be included, should it be available, would be targeteded on focused often the mayor's priority areas. we did instruct departments and have been working closely with them to ensure that implementation of the recently passed budget process improvement legislation, which requires all departments to hold a public budget hearing, between december and february, and this is legislation.

they wanted you to know that we did impress upon departments the importance of implementing this year. and then finally, he's just a summary of what i went through. and here's some key dates for the upcoming budget cycle. i will note that this year our four enterprise departments and handful of other non-general fund departments will be coming before the budget committee on may 1st. we'll have a may 1st budget. i'll have six two-year budgets. last year, they made minor adjustments. this year, their full budgets are available for you all to make changes and hear what their policy and changes are. that starts in may. now i'm done. i'm sorry. >> supervisor fewer: okay, thank you very much. any comments or questions from colleagues? i just want to comment that i

think on page 21 about target efficiency reduction proposals, i think it's good in any budget year, even years we're fat. looking for efficiency and waste is always a really smart thing. and we're dealing with public funds. so let's open this up for public comment. any members of the public like to comment on item number 2? >> as i said earlier, a lot of us advocates have seen this mickey mouse many times. as one of you all stated, people come, they cry over what they want to most help them. and it's very sad to see the city so dirty, stinking middle class people dying on the

streets of san francisco. and the good that we can do with $12 billion+ budget that we have. we don't have our hearts in the right place to do the right thing. there are several reports, but there is run report that looks at the livability score card, clean streets, public health school card, behavioral health, safety health, safety net school card, homelessness, public safety score card. transportation, police response, environmental, score card. you get the -- what i'm dealing with. so i bring university students and we discuss this. and when you folks were supposed to know something about the budget, give a drab report, there are many unknowns.

you have to keep it succinct. you can ramble and ramble and that's the way of confusing the people. so basically, are you addressing quality of life issues? no. what is your score card? f minus. thank you very much. >> supervisor fewer: any more public comment on item number 2, seeing none, public comment is now closed. and madame clerk, i think the motion is to file this item, is that correct? >> that's correct. >> supervisor fewer: i'd like to make a motion to file this item? second, please. we can take that without objection. thank you very much. if you didn't -- wouldn't mind, i'd like to call item number 3 now. >> item number 3 is hearing to consider the annual review and adoption of the proposed draft budget for fiscal year 2020-2021 and 2021-22 for the board of

supervisors, office of the clerk of the board and quick the office of the -- and requesting the office of the clerk of the board. >> the clerk of the board. >> members of the committee, chair fewer, angela calvillo, clerk of the board. it's my privilege to present to you the proposed requested funding for department number one, the board of supervisors. the general funds that underlie our projects and human resource needs for the budget and the out years. i'm joined by the department's administrative deputy who prepares and organizes this information for us today. in january, i presented a snapshot of the department's budget and asked the committee to provide its budget instructions, or its guidelines, as the board's rules require, as we crafted department fiscal

year budgets. i will present those budgets for your approval, for our submittal to the mayor and controller for the city's next phase of the budget review. four months from now in june, i will return to the committee for final approval and to share with you if there have been any changes between now and june. i have a five-minute present for you. it will be quick. i will begin by addressing the open items from the january hearing. we presented these items in concept. we received the committee's general consent to gather more detail. and hear -- here is our recommended approach. first, our overtime pay for the 1364 administrative assistants for the member offices. we've been tracking overtime hours since october and to date, the average overtime hours are 7.92 hours per aide per pay

period. based on this number, we're proposing to add 101,000 for overtime pay and fiscal benefits. as i mentioned in january, we believe it is time to modernize the youth positions with updated job descriptions that reflect the actual work they're currently doing. there is a higher degree of responsibility that should be reflected that in their job description, their expertise, analytical skills and independent judgment. this is a much needed effort to address ongoing staff retention issues. longer tenure would provide knowledge for the staff which would in turn enhance their development. we have the recommended job classes for three staff positions for your approval today on the slide. the classifications have been vetted by d.h.r. and recommended by d.h.r. and the department.

slide 3 lists all proposed changes, including the items that we presented in detail in january. to recap, we're proposing 15,000 for job class realignment in the operations division. 17,000 for additional licenses for our sales force constituent management program. $77,000 which is the budget and legislative analyst contract. $15,000 just to complete the needed position for our chief information officer in our department. laughco's general fund support, we've indicated was 297. and supervisor fewer requested $486,000. and if all changes are apraved, the department expenditure budget would increase by $788,000 in fiscal year 20-21. and $794,000 in fiscal year

21-22. to our revenues, this chart shows the revenues over the last 10 or so years. the light blue bars represent the revenue from the assessment appeals board. the board goes through cycles which are tied to the real estate market. the revenue has been at a low level for the last several years. as the real estate values remain high. and we project that this trend will continue in the budget years. we also project that the department's other source of revenue are planning appeal surcharge will remain relatively the same, or unchanged. and on my final slide. this slide summarizes the proposed changes that i mentioned today. it shows the current year budget, fiscal year 20-21 base budget and the proposed changes by category. accepting the proposed changes i reviewed for you a moment ago, this expenditure budget will increase by $788,000, or 4.2%

from the base. one last point, i wear many hats in the organization. as the department's apointing officer, the universal attraction or feeling from our hired employees in the department is that we advance a purpose in our work that is bigger than any one of us. a common through line, we find value in serving beyond the money that is made for ourselves and our families. and i consider that to be the dynamism that our staff deliver daily from our employees to our customer base and to each other. and that is our most treasured resource. if you approve all of the proposed changes, we will be able to operate the department with resources that provide a protective and supportive workplace while providing a multitude of services to the pun and to each other. -- public and to each other. if the committee desires to authorize this proposed budget,

the action you'll take is to approve and forward the budget to the mayor and the controller. this concludes my presentation. we are available for questions. >> supervisor fewer: thank you very much. any questions? supervisor walton? >> supervisor walton: thank you so much, chair fewer, and thank you so much madame clerk. i do have two requests i would like to check into. so the first i would like to propose in lieu of the overtime approval, you consider reclassifying the fourth aide to work on legislation and maybe take away the need for overtime and see what cost savings may exist. and then number two, as far as the youth commission, if we can look into a possible way to provide compensation for youth commissioners? and add an outreach mandate that will ensure that we have applicants who are diverse and

come from public schools, public housing and underserved housing in all of the districts. i would love if we could check back and see how this would cost and proposed and bring it back to the committee. >> okay. so, supervisor walton, members of the committee, i will work with your offices on a classification that makes sense to you. and bring that back to another hearing here in the -- in a week or so, if that's satisfactory to the chair and members. as far as the youth commission is concerned, the charter does state that the commissioners will not receive a stipend, but i'm understanding you're think ongoing of other types of -- thinking of other types of compensation and i'm happy to explore that with you and with the city attorney assistance and we'll deliver that to you in a week or so if that's the chair's decision.

>> supervisor fewer: thank you very much. supervisor ronen. >> supervisor ronen: this is more a question for the chair about the lack of budget? >> supervisor fewer: yes. >> supervisor ronen: thank you so much. sorry, i just am seeing this laughco budge for the first time. >> supervisor fewer: in 2017, it was decided that they would eliminate the civil service position for the lafco. and then we had -- so we've had a consultant. it is now time we think that it may be back to a permanent civil service. at that time lafco's scope of work, was quite frankly, one subject matter, cleanpowersf. lafco has since taken on, as you

know, having a discussion with california lafco about the scope of work we could do. they will be taking on the public banking. they will be taking on the largest mobility study in the nation and also continuing their work on cleanpowersf to expand that. considering the scope of work, we're suggesting this should be another person rather than just one person doing all this work. and we have set -- we've had the same budget of $297,000 for 10 years and have not actually expanded that at all. i also just want to tell the board that this is not include the $330,000 that our executive director has privately fundraised for lafco. we know this is a big increase in lafco. but actually the scope of work and the depth of the work has far exceeded, i think, what lafco has done in the past.

and again, it is, you know, i actually feel pretty strongly that it is the -- i think the caliber of work that our executive director has really displayed and also the fact that he has gone from outside foundations to acquire $330,000 to and has continued to do so, that this -- an assistant actually helps him in this endeavor. and also to help organize these different bodies of work and the interns that he has also acquired through his outreach. we've had a lot of interns working. it would help to manage also those interns, too. >> supervisor ronen: a couple of things. since we're going to -- it sounds like we're going to continue this item. do you think the executive director could come and present? >> supervisor fewer: absolutely. i think the executive director should sit down with you and

explain the depth of the work and the amount of work they've been doing. i think you'll find it really exciting. >> supervisor ronen: great to hear. >> supervisor fewer: every time he comes with a report, i think it's so interesting, but also i feel like they're moving the agenda of what lafco should be doing as this outside agency that we sit on. but thank you, that's great. >> supervisor ronen: my second question about intern stipends, it's not that i'm against them, but we don't have stereotypednds for the -- stipend the for the interns in our office. i wanted to do it across the board. i don't think we should give lafco those without the -- >> supervisor fewer: that is fair. i know that the these interns are actually -- the work that

they do is very specific. they also are producing reports for us. and but happy to have that conversation. quite frankly. and i think that after you meet with executive director, you should -- and while you meet with the executive director, you should actually that question, too. that's fine, very fair. any other questions or comments? seeing none, let's open up for public comment. any members of the public like to comment on item number 3? seeing none, public comment is now closed. i'd like to make a motion. i also just want to say, is that i would like to make a motion to move this -- can i approve this budget to be sent to the board -- this budget to be sent to the controller and the mayor? is that the action today? because i'd like actually to call this item, this hearing to

continue it at the call of the chair also, to give us an ability to bring it back to have further discussion? >> chair fewer, because supervisor walton is interested in discussing two items that he brought up today, i would just recommend that you continue the hearing to the next week, or the following week, whatever your docket will allow. i appreciate your offer, but in case you were looking at other things, i'm happy to continue it, too. >> supervisor fewer: i'd like to make a motion to continue this item to the call of the chair as i'm looking at our calendar. so, i would like to make a motion to move this to the call of the chair, seconded. if we take this without objection? thank you. >> item 1 is to hear an update on the state and federal budgets and any related impacts to the

city and requesting the controller's office and mayor's office to report. >> supervisor fewer: thank you kretch very much. -- thank you very much. >> this is a four-slide presentation. hopefully, it will move quickly. this is a very high level summary of both how the state and federal budget process works. and then just a very quick top-level summary of the govern's proposed over $200 billion state budget. and contained in one slide. so if there are any subject matters that i touch on that you would like a deeper dive into, we can definitely work with city departments that are potentially impacted by these program areas to have a second kind of follow-up meeting on that. i'll be able to answer questions, but i want to bring highlights to your attention and we can figure out next steps in terms of discussing these

further. so the state budget process kicks off on january 10 when the governor submits his proposed budget. then throughout the month of february and april, the is that the and assembly budget committees conduct hearings. and by may 15th, a budget is released. and then may through june, the two houses reconcile the budget legislation and the governor must sign or veto the budget by june 30th for the fiscal year, which starts on the same cycle as ours on july 1st. so on january 10, governor newsom proposed a budget. it's about $220 billion state budget. represents 2.3% growth the prior year. and would say the two main themes in the governor's budget are fiscal responsibility, paying down significant debt,

and growing state reserves in light of what they termed contraction of the expansion. which is a different way of saying the kind of slowing revenue growth that we're projecting at the local level, the state is seeing similar trends at the state level. both the slowing housing market, a slowing rate of job growth and slowing rate of trade. so still projected growth, but at slower rates. similar to what i was saying earlier about our p-- projectios for local revenue. both to streamline and expand medi-cal to undocumented individuals over 65 growing on the expansion last year. as well as targeted task force and service delivery for behavioral health through

medi-cal. there is $750 million to create what they are calling the california access to housing and services fund to help address homelessness. this is a different model than what we've received for homelessness funding over the last two years through the governor's budget. the last two years we received $70 million over the two years that helped fund a number of initiatives in the city. this is a more regional approach. we're still working with the governor's office to understand and we can bring updates to you what this would mean to the fund and the administrator approach they've outlined. finally, while not directly related to our city budget which i know is a priority for residents and members of this committee, the governor has made a significant commitment to our k-12 education, including $900 million to recruit and retain k-12 teachers.

the budget addresses emergency response, criminal justice, workforce development. if anything is of interest to you, we're happy to work with the appropriate departments to come back with a summary. there are risks just like with our budget. if revenue growth is slower than what they've projected in the deficit, that would present a risk to the proposed budget. there has also been tax assumptions bass based on the various tax level, based on the tax reform. if those behaviors changed, it would worsen the projection. there is a significant assumption in the budget related to medi-cal financing at the federal level. and that is for certain financing mechanisms. if the feds were to disallow especially the collection of managed care organization tax which we currently use to help fund medi-cal, that would add

significant cost to these budget deficits and change the financial picture. the government's budget assumes we'll be able to continue to utilize the funding mechanisms, but if they took adverse action, that would affect the state budget. the overview of what the federal budget process looks like. the federal fiscal year runs from october to september. the general timeline is it's an annual process of congress passing appropriation bills that have to be passed by october 1. this creates risks and uncertainties around federal funding sources for the four areas. i think about the programs most directly impacted, includes our entitlement program, medicaid, which in california is medi-cal, snap, food assistance and

various child welfare programs. we receive about a billion dollars of state and federal money for those entitlement programs. and then there is significant grant sources. especially related to housing and transportation that are done through the federal budget process as well as section 8 housing vouchers. so when we keep an eye on the federal budget process, those are the four main areas they're trying to keep tabs on. i haven't heard anything. i checked in with our state and federal staff on this current budget process, but just to keep your eyes and ears out, these are the major areas that impact the city budget. that's it. >> supervisor fewer: any comments or questions from colleagues? seeing none, any members of the public? seeing none, public comment is closed. madame clerk, i'd like to make a motion to file this hearing. if i could have a second. thank you very much. we can take that without

objection. thank you very much, colleagues. any other business before us today? >> no further business. >> supervisor fewer: great, we're adjourned. thank you. >> hello. my name is thomas lee. i'm one of the cochairs of the asian american heritage month celebration. as you know, we celebrate that in may, but today, we're very

excited to celebrate lunar new year with everyone. thank you so much. we'd like to recognize, of course, our elected officials in the room, mayor london breed, and our official elected family. do you mind coming up to the podium? so we're very excited to have a number of people on the panel from asian pacific countries. i'd like to introduce my cochair, al perez, to introduce some of them to you. >> hello, everyone. happy new year. [speaking native language] >> as you know, chinese new year is celebrated by many people in the chinese and asian community. so i would like to welcome the

deputy consular general and consular general. we have consul general of indonesia, mr. simon socarno. consul general from the republic of korea, mr. lak sun young. consul general of the philippines, mr. henry bensuto. deputy consul general from china, mr. fa kung ren. consul from the chinese consul, wei jun chen. and finally, from the

vietnamese consul, as well, dong tun lee. >> for the elected official family, would you like to come up on the stage, join me also, so we can recognize you guys? get in the photo, paul. so as you know, we hold our annual achievements in may. little do you know, we're a nonprofit that runs year-round to help organize this wonderful festivity. to lead us in this asian american celebration, we have claudine chang, and we'd like to invite her to say a few words [applause] >> thank you. thank you, everyone, for spending your afternoon with us here today. every year, we host this new year reception to bring

together our community partners, our sponsors, and our community volunteers. bringing communities today is what the a.p.a. heritage foundation is about. asian americans makeup one-third of the city's demographics, but i'm sure after the 2020 census is taken, the number might be higher. i've heard that san francisco is the asian american capital in north american. yea, and why not? we have the largest asian american film festival in the country here in san francisco, and among the major pacific institutions, we have the best library with diverse programs in all the 27 branchs, headed by our chief, michael lambert,

who's here today, the first asian american to be in that position. and guess what? to top that all and what makes this city special, i think it's about all of us within this diverse community. we appreciate each other, we support each other, we go to each other's cultural celebrations and traditions. and of course in the month of may, we celebrate a.p.a. heritage month. this year is no different. we will kick off this month's celebration on may 1 with mayor london breed, and we have whole month of programs because of all of our partners organizations. thank you to ashley chang and all the partnering organizations. we will be publishing a month long calendar so we know what we have every month. we would not be able to do this year to year without your support, your participation,

but we definitely cannot make this happen without having a mayor who really embraces diversity, who really, really appreciates and cares about every single community in san francisco. we have celebrations throughout the year. this -- on this coming friday, we will be celebrating black history month here in city hall -- actually, that's tomorrow. so we really cannot be doing any better, and we really love our mayor, mayor london breed. [applause] >> the hon. london breed: thank you, claudine, so much. and to the a.p.a. heritage foundation and hosting this amazing reception every single year, but more importantly, the work that you do throughout the year to bring communities together, to celebrate not just during lunar new year but apa heritage month in san francisco in may is an absolute delight, and i do appreciate the

foundation's willingness to meet with diverse communities in san francisco to make sure that those businesses, to make sure that folks that are part of the a.p.a. communities are included in so many of the festivities that occur so that we can support those businesses in our city, especially in places like supervisor mar's district, which are on the outskirts of the community, where we know there are so many mom-and-pop businesses, where you have the owners of that business that are the ones that are the employees, as well, and are not participating in so many of the amazing opportunities that we have in san francisco. a.p.a. heritage month is an opportunity to secelebrate the community and to bring all people together. today, as we celebrate the start of lunar new year, the year of the rat, we focus on of course resilience and prosperity, and the things that are really important to this

real-time honored tradition of really celebrating a number of amazing symbols of hope and excitement of the future. and so as we not only launch into the lunar new year festivities in san francisco with this reception, with a parade on february 8 and all the other activities, i'm really looking forward to seeing what this new stamp looks like from the post office, which continues to partner with the a.p.a. heritage foundation on providing what i think is one of the most oftentimes beautiful stamps that they do sev every single year in honor of lunar new year. it's absolutely amazing. so as we celebrate this event as well as many other events that we'll be hosting, at the library, at castro, at

chinatown, at sunset, at the richmond, let us take the time to reflect on how amazing this city is because of its diversity, because of its richness in history. you see that with the folks, our consul generals here from so many places throughout the world who continue to work with us to build cooperation to make sure that we have those great relationships despite what we know continue to be challenges with the folks who are in washington, d.c., but nevertheless, our sister city relationships with shanghai, we'll be celebrating that 40 years, and i think that is a real milestone in demonstrating that. [applause] >> the hon. london breed: demonstrating an incredible relationship that we will continue to build upon, along with so many of our other sister cities who ensure that

folks who are a part of this city and folks who are a part of the rich history of the asian culture, are welcomed, our celebrated, and supported. and the census, as claudine mentioned, is a real opportunity to ensure that everyone is also counted. so let's get the word out. thank you all so much for being here today. [applause] >> the hon. london breed: got my new red folders for my certificate. how exciting is that. so here on behalf of the city and county of san francisco, i want to present to claudine, the work that you continue to do to really strengthen this organization and bring people together is truly outstanding. so thank you for the work that the a.p.a. heritage foundation, the contributions that you make, the incredible food and in bringing people together for

these festivities. thank you so much. [inaudible] [applause] >> i think --

[inaudible] >> thank you, claudine. she said 15 seconds, she means 15 minutes. [speaking native language] >> president yee: for those of you don't know what i just said, i said "happy new year." thank you, claudine and those for hosting this event. it's always exciting to know that this is the event that usually unvales our new staff, our lunar new year staff for the year. and i don't want to steal your thunder, claudine, because you had talked about it, but this is actually the third cycle where we have lunar new year staff. and i was mayor for there for

cycle, in 1992 or '93, and i was here for another cycle about 12 years later. i'm he i'm honored to be here again, the year of the rat. thank you to u.p.s. for continuing this effort, and the effort of a.p.a. throughout san francisco and the united states. i want to say one thing. this is a great month. we're going to have celebrations up and down, all over the place, including chinatown, the parade, and every where else. what i was disappointed with mayor breed is she did not mention my lunar new year celebration in district 7. oh!

where she was -- [inaudible] >> president yee: and we talked about sharing cultures. she was there last year. she said oh, my goodness, i can't believe this. a chinese new year celebration in the black church, and we're going to do it again because it's about sharing our heritage with everybody, and for them to share it with us. and this is what makes san francisco so great. thank you very much. [applause] >> anybody else? >> sonny i'm supervisor mar, supervisor in the sunset district. it's so great to be here at so

many events that we're going to have around the city for lunar new year. thank you for being here for this event and promoting asian american heritage here at city hall and for so many years. i did want to plug the lunar new year celebration that's happening in my district, in the sunset district. it's going to be the first neighborhood wide lunar new year celebration in the sunset district on february 22 at 10:00 at jefferson elementary school, so i hope to see you all there. and at the chinese new year parade. thanks. [applause] >> good evening, everyone. i'm kathr i'm catherine stefani, supervisor for district 2. i just want to say happy new year, [speaking chinese language] >> supervisor stefani: and just a happy new year of the rat.

thanks, everyone. >> hi. i'm dean preston, district 3 supervisor. i just want to echo what president yee said and all of the mayor's wonderful words. looking forward to the celebrations with you all and really looking forward to the unvailing of this, so thank you so much, and happy new year. >> commissioner lam: good evening, everyone. i serve on the san francisco board of education. and thank you, claudine, for your leadership and the asian

american heritage association for your work. we are so excited to be able to launch the lunar new year. our students and teachers launched the new year. how amazing for the community to be able to celebrate with family, and we're really thrilled to be a part of the celebration, so thank you. [applause] [speaking native language] >> happy year of the rat. i don't think everyone needs to said other than that. please come to the district 7 lu lunar new year festival this saturday at 3:00 p.m. there's going to be a bouncy house, and a ton of food from

district 7 residents and businesses, so there'll be a ton of food, and happy new year. [applause] >> hello. [speaking native language] >> i just wanted to say as we all go to our respective events, stay safe. i see darryl fung from the police department. [applause] >> and know that we'll be out there to make sure that everybody has a safe lunar new year. also, there's something else going on in the city on sunday i believe involving red and gold. know that any events throughout the city will be safe, and we'll make sure everyone stays safe. so have a good evening [applause]

>> hello, everybody. alek randolph, and i serve on the school board. when i told my husband, who's serving in afghanistan, he made sure i told everyone -- [speaking native language] >> and he wanted me to make sure i told everybody, happy to open the stamp. >> so the moment we've all been waiting for. mr. post master, would you come forward? acting post master. >> good evening, everyone. thank you for the kind introduction, claudine. i'm honored to be here to represent the united states postal service as we celebrate the year of the rat stamp. i'd first like to thank mayor london breed, claudine, all of our customers and the many community leaders that are here tonight for joining us here to unvale the stamp. as one of the nation's oldest

public institution, postal service regards it an honor to celebrate diversity through our annual stamp programs. we have celebrated cultures of people who have come from around the world reflecting the rich, multifaceted history of america. this launches our new lunar new year series which will feature all 12 signs associated with the chinese lunar new year calendar. beginning january 25, more than 25% of the world's population began to celebrate the lunar new year and ring in the year of the rat. of course, lunar new year is not only one of the most important holidays of the year, it's when many asian communities reconnect with friends, family. it's a time to celebrate with tradition

traditional foods, umusic, and parades. a popular legend tells of the animals swimming across a lake in a race to determine the order in the zodiac. the rat rode across the lake on the back of an ox, but jumped ahead at the end to land ahead of the ox on the calendar. rats are considered to be diligent workers, cheerful, and very resourceful. i think we could all use a rat in our lives. let's talk about the feature stamp. the artwork is blue, because it's considered a lucky color for those born in the year of the rat. the circle on the rat's fore hand represents the new moon on which the lunar new year begins, while the crown like motif represents the animal's

position as the first sign in the zodiac. and lastly, the lucky color red connects everything with the household elements. it's a remarkable item that will be treasured for years to come. it is our sincere hope that in the year of the rat, it brings you prosperity, peace, good luck, and much joy. now at this time, i'd like to invite our other guests up to join me in presenting the lunar new year stamp, mayor breed, our district manager, raj singair. claudine cheng. [applause]

>> welcome to our first meeting of the transbay joint powers authority director special meeting today. roll call, please. [roll call]