>> good morning, everyone. this meeting will come to order. welcome to the june 22, 2020 rules committee. i am chair of the committee. with me is vice chair stefani and rules committee member mar. we are also joined this morning by matt haney. the clerk today is victor young. i would like to thank sfgovtv

for staffing this meeting. do you have any announcements? >> due to the covid-19 health emergency and to protect board members and the public the board of supervisors legislative committee room are closed. members will participate remotely. committee members will attend through video conference and participate to the same extent as if physically present. public comment is available for each item. they are streaming the number on the screen. each speaker is allowed two minutes. comments are available via phone by calling (415)655-0001. access code for the meeting is

(145)143-5810. press pound and pound again. when connecting you will hear the discussion but you will will be ibe in his senning need only. dial star three. call from quiet location and speak slowly and turndown your television or radioia. you may submit public comment via e-mail the clerk at sfgovtv.org. if you submit via e-mail it will be included as part of the official file. items acted upon today are to appear on the agenda on june 30 unless otherwise stated. >> thank you so much. mr. clerk, please call item the

out of order. >> charter amendment to amend the charter of the city and county of san francisco to create public works commission to oversee the department of public works to create the sanitation and streets department to succeed specific duties currently performed by the department of public works to create a sanitation and streets commission and to oversee the sanitation and streets department affirming the planning department's determination under the california environmental quality act. supervisor haney. >> i am excited to be able to present this charter amendment and discuss it to you, but not today. i am here to ask for this to be continued to next week to save you time today. i am looking forward to sharing with you this needed charter

amendment. i will be asking for a continuance today. >> thank you so much. if my colleagues don't have comments we will open this up to public comment anticipating motion to continue. >> do we have anybody on the line? members of the public who wish to comment on this should call (415)655-0001, meeting i id1451435810. if you would like to speak at this time press star 3 to be unmuted. do we have anybody on the line? >> madam chair, no callers in the queue. >> public comment is closed. i would like to make a motion to continue this item to our next

rules committee meeting. >> on that motion. >> shall we continue it to the call of the chair just in case? i would like to revise my motion to continue this item to the call of the chair. >> on that motion. supervisor stefani. >> aye. >> supervisor mar. >> aye. >> chair ronen. >> aye. >> the motion passes without objection. >> thank you very much. could you please read item 1. ordinance amending the administrative code to include as a mandatory element in the definition of the term responsible substantiation of a record of safe performance on construction projects by the

bidder or proposer on a public works or improvement project and to expressly require construction contract an weareds for all specific project delivery methods to be made only to responsible construction contractors. >> wonderful. we have bill barns here from the city administrator's office. any comments or presentation? we can't hear you. >> so this ordinance is based on work from president yee who had a hearing in 2018 about a dangerous situation in the tunnel where an individual was killed. one of the questions asked was

how do we evaluate safety in public works contracts? for the benefit of the public chapter 6 governs all public works department airport, m.t.a., rec and park and public works. every other definition of those responsible. abidder you have to demonstratin bonding capacity. it doesn't require a safety record being included as the responsibility determination. this adds to the definition of responsible that you share your safety record. that includes both citations and promotions as well as those pending. in an earlier case there was a pending citation because it wasn't finalized it wasn't reported. it is previous work and department would review it. it applies responsible to all

different method of contractors. design build, elevator construction, hazard mitigation. those were inclusive of the responsible language. working with the city attorney this was added. this has support of the chapter 6 contracting departments based on what the p.u.c. has already done and i am happy too answer any questions. >> any questions? okay. thank you so much. mr. clerk. is there any public comment on this item? >> i would like to state that members of the public to participate should call (415)655-0001. meeting id1455r1435 '81 0 and

press pound. if you are on the line and would like to make public comment dial star 3 at this time. mr. speakers on the line? >> there are no callers in the queue. >> then public comment is closed. i am happy to make a motion to move this item forward with positive recommendation. >> on that motion. supervisor stefani. >> aye. >> supervisor mar. >> aye. >> chair ronen. >> aye. >> the motion passes without objection. >> thank you so much. is there any other items on the agenda? >> that completes th the th ther today. >> fastest rules meeting ever. have a nice day ever everyone.

meeting is adjourned. >> welcome to members of the public watching the meeting. we will call the meeting to order. secretary morewitz, will you

call the roll, please. [ roll call ] >> great. thank you, secretary morewitz. we'll move on to the second item, approval of the health commission meeting minutes from the june -- which meeting? june 3rd meeting. sorry. so commissioners, upon reviewing the minutes, does anyone have any amendments? if not, is there a motion to approve? >> i want to make sure there's no public commented. before we do that, i want to provide information on the screen and verbally say the number. >> thank you. >> if you want to call in, the

in you can is 408-418-9388. access code is 1463455741, and you'll press pound twice in order to get on to the system. then when you would like to actually make public comment, you dial star 3. all right. do we have any public comment for this item? >> there is no public comment. >> great. so commissioner, you can move forward with your comments. >> thank you for that reminder, mark. all right, commissioners. moving on to approval of the minutes from the tuesday, june 2nd, meeting of the health commission. upon reviewing the minutes, does anyone have any amendments? if not, a motion to approve. >> so moved. >> second. >> i'll do a roll call vote.

[ roll call ] >> great. thank you. the next item is the director's report. >> good afternoon, commissioners. you have the director's report in front of you. it details much of the work regard to covid-19 response. i'm going to provide an update to you on that response. so many of the details will follow. i did want to point out that there's been a lot of press recently around our department and our response and especially wanted to highlight a really nice article about dr. aragon, our health officer that was on the front page of the chronicle a couple days ago. i stand ready for questions. my update will go through our

covid-19 -- i believe that's the next agenda item. >> actually, i apologize. before we get to comments from you commissioners, i would like to see if there is any public comments. >> there is no public comments. >> thank you. >> all right. we can move on to the covid-19 update then. >> great. well, thank you, commissioners. so today i will provide an update of where we stand in terms of the data tracker that -- the data we've been tracking and that you've seen before. this is an exciting day in that we are -- we have presented our -- posting our indicator system, color coded system so sasan franciscans see where we stand with regard to our covid-19 response and then our deputy health officer will be

presenting our reasons and application for a variance as we move into our phases of reopening. but i did want to just acknowledge that san francisco ans have done a terrific job of flattening the curve in our community. on behalf of the department, thank them for looking out for each other and thank you for stg home, covering your faces, and for frequent hand washing. the message today going forward until we have effective treatment or vaccine, don't stop. the virus is officia obviously l here. there is more than ever before. we have to practice safer behaviors, and still, the safest thing to do is to stay at home. but not everyone can do that. there are real negative

consequences to our shelter in place. as you know, commissioners, in the past few months, our testing capacity has increased dramatically. our personal protective equipment applies have improved, and we have dramatically expanded or contract tracing programs. our behaviors are the most important tool to stop the spread of the virus, and we must remember that as a department, as community, as a city, we sustain the habits that have gotten us this far today. as the city reopens and as people move more, we expect increase in cases and hospitalizations. this is already the pattern in other places that have started to open up. our goal is to keep morbidity and mortality as low as possible during this phase of the

pandemic. we are still learning how risky certain activities are and how to reduce those risks. in this new environment, it's important to know that the more you do and the more you move around, the greater your risk of contracting the virus. the virus spreads quickly and as we know, as we've seen, it can rapidly, overwhelm communities and the health care system. while we hope that won't happen, it's certainly possible. that's why we must be vigilant and flexible as we enter this new phase. this new phase will determine our ability as a community to manage our shared risk and determine if and how we can work together and apply safer behaviors that will slow the virus' spread. so we will go into the indicator discussion and the reopening framework in a bit, but i did want to show you where we stand today with our covid-19 response in summary.

so please can we have the next slide. so today, we have 2971 cases of covid-19 diagnosed in the city. obviously there are more cases, but they have not -- everyone hasn't been tested. everyone hasn't been diagnosed. we are nearing the 3,000 mark. we've had 46 deaths over this period of time. every death from covid-19 is too many. relative to other jurisdictions, our death rate has been thankfully low. you can see there's -- the rate of deaths has decreased pretty dramatically since about mid-may here. next slide. this slide should be familiar to you. it's been shown for the last few

health commission meetings, this is updated data. at this time, we're over 100,000 tests a day with an overall 4% positivity rate. we are running average over the last 7 days of over 2,000 tests a day. so we have more than met our target of 1800 tests a day in the city. that last bar -- gray bar on the tests done, the last gray bar on the right, that is lower because not all of the test results have been counted for that day. you can see overall we've had a dramatic increase in our testing certainly since april and may. cases by race and ethnicity, the virus diagnoses continue to be

disproportionally affecting certain communities, particularly in the latinx community. you can see half of our cases are diagnosed among the latinx community. there continues to be a disproportional impact on black african-americans. next slide. so this is our curve, our hospital curve going back now to mid-may through june. so about 30 days worth of hospitalizations. the green bars. you'll recall when i showed you this a few weeks ago, we were starting to see a decrease, but there was another step down to about cases in the high 30s to low 40s. that is a significant drop from

a few weeks ago when we were in the 50s. so two significant drops in the curve over these past few months. you'll recall that we peaked at about 100 cases in the hospital altogether. the light green bars are people in the icu, and the dark green bars are people in the medical surgical unit. we have at this time just 8 people in the intensive care unit across our health care system. then the purple curve below are the people who are in the hospital who are tested for covid-19, people under investigation, and you can see that over time, that number has decreased as well. so when we say we flattened the curve, we've actually decreased the curve significantly a couple times over the past few months. again, this is an achievement that is to the actions of san franciscans. we're going to need their continued support and preventive

actions so that this curve goes up as slowly as possible as we go to this next reopening phase. next slide. so now i want to go to our indicators, to assess progress with regard to our monitoring of covid-19 and give the commission an update on our metrics on this and, again, how we are choosing our specific color schemes so that people at a glance can tell where things stand. the health indicators includes the hospital system which is really our key indicator right now. it gives us the best sense of what makes sense with regard to the virus. confirmed cases, which obviously relates -- well, not obviously, but confirmed cases really

relates to how many people we are testing, where we are testing, whether we are testing low or higher risk populations. contact testing itself, our testing capacity, contact tracing, and then, of course, the all important personal protective equipment or ppe in the department. right now, the indicators are overall favorable. so we do -- we are continuing a gradual reopening as of today. next slide. these are colors that we will use to monitor these indicators. again, so that people can see at a glance where we stand. green means we are hitting our targets, that opening can continue taking into account other indicators and data. of course, san franciscans

should continue to take precaution. yellow means evaluate the other indicators and additional data before loosening the stay-at-home order. orange, consider pausing or dialing back reopening based on the status of other indicators and red is strongly consider increasing stay at home restrictions and possibly pause or dial back. so these are the colors moving forward. next slide. this is a complex slide, but the goal of this is to provide you with the information about how we determine whether the colors of our indicators change. i'm not going to go through it in detail, but it shows the

cutoffs for proceeding to a new color based on data. you'll see that our categories are a healthy system. these are the rate of increasing hospitalizations, our capacity to treat severe cases, our capacity to treat severe cases in the icu, the disease situation with regard to cases and tests her day, and our disease control measures, our ability to perform contact tracing, and are we protecting health care workers. the key indicators on this are our health care system indicators, and no one indicator or color will determine our actions. we'll have to take a look in the broad context of situation to determine whether we move forward, pause, or go backwards, but i do want to lead you

through the top row here with regard to hospitalization. the indicator is the rate of increase in total covid hospitalizations. it's a rate because we want to ensure that if -- that we have an ability -- we hope that we have the ability to determine if there is a significant surge starting, that that will be best understood by a rate of hospitalizations. so triggers to raise to a higher level is increasing the threshold over a 7-day period, trigger to a lower level would be decreasing over a 7-day period. green would be that the rate changes at less than 10% over that period of time. yellow would be a rate going to 10 to 15%. level three, a moderate would be 15 to 20%, and then a level four, high alert, would be more

than 20%. based on analysis by multiple analysts in the health department and in collaboration with the controller's office, these additional cutoffs that you see on this screen were made based on the best information that we have to monitor our hospital system, our disease situation, and our ability to, as best we can, maintain disease control. next slide. now i'm going to talk a little bit about where things stand today. so the hospital system measure shows us the degree of serious illness in the community, and as you can see, the indicator is green. we're currently hitting our

targets. the rate of new covid hospitalizations is decreasing, and we have adequate icu and acute care bed capacity, 37% and 26% of acute care beds are available. next slide. in terms of cases, we are yellow status. the number of cases is flat, which is good, although we would ideally like to see it decline, which would put us in green. that probably won't happen for a while until we expect more cases as we start to reopen. next slide. in terms of testing, we are currently testing more people and focusing on testing vulnerable populations, groups at highest risk of exposure,

health care workers, and essential workers and people with symptoms. if we set a goal, testing of 1800 tests per day across our population, across the city, we are more than meeting that goal today. this is our 7-day average. we are at almost 2500 tests being done a day as part of our testing effort across the city. next slide. contact tracing. you'll recall the overview of contact tracing at the last health commission meeting as a key to preventing new infections. our goal is to reach a 90% of contacts identified and 90% of contacts reached. in the last couple weeks, since you saw this metric, we made

significant improvements at 87% and 85%, almost at that green level of 90%. significant progress there. next slide. then in term of personal protective equipment, our goal is to have a 30-day supply. of ppe across the public health system for people -- for health care providers. we are at 89%. this metric includes 12 different types of ppe with regard to a 30-day supply. again, as we strengthen our ppe supply, we will continue to monitor this. we obviously would like this to be green. it's currently at yellow status. next slide. so those are -- that's a summary of our indicators. we can provide you with the link

to the data tracker so that you can see the indicators displayed in more details. i did want to show this to the commission today since these were just released. it's another iteration of our ability to communicate where we stand in covid-19 with regard to communicating with the public and these metrics are obviously very key for us to monitor our efforts and determine the right balance between the vigilance and ensuring that our health care system are working to monitor the capacity as we go into this stage of gradual reopening. we will provide an update on stages of reopening and our variance application to the state in the next presentation -- part of his presentation. i thought i would pause here to

see if anyone had additional questions. >> thank you, director. dr. chow. >> thank you, dr. colfax, for the explanation. i'm wondering, your display of the three or four metrics with the different colors were very clear, but the large metrics you showed earlier, does it have more measures and, therefore, it comes up into this scorecard that is simpler to read and easy to understand and that's the reason you're showing us what's behind it, or is it that the whole scorecard is really what's going to be used and this is merely a summary? because the summary was easy to understand. the other one was very complex, and i'm sure well thought out.

i'm not sure if it means that 9 greens and 4 yellows equal what then? >> yeah. i appreciate the question, commissioner. the metrics, the table i showed is complicated. it translates -- yeah. the cutoff that i showed translates into the more -- the more generalized assessment that i showed you in the subsequent slides. so there's no one color. it's not an interpretation of the various metrics that add up to any one color. each metric is assigned a color based on the criteria that i showed you in that table. we will, for now, be very focused on the hospital beds because those will be the best -- those are the best metrics that we have in terms of any upcoming surge and the need

to go down. there are obviously other metrics that we'll watch very carefully. if we see a significant burst n cases, for instance, that is associated with some prior event or is concerning enough that we would be concerned about the hospital system reaching capacity at a later date as people got sicker, we would respond to that. so it's really taking in account all those metrics and the colors of not only the summary of all the colors but each specific metric and whether a specific metric in the hospital system, for instance, goes red, you have to really take a hard look at where we stand. >> which ones will be available publicly or which ones are in the link that you will be provided through mr. morewitz?

>> these are all available. there's more detail on the data tracker than i went through here. so there's both the ability for someone to take a quick look and then there's plenty of deeper dives that people can go into to better understand how the -- what's behind the colors. >> could we share that website now for anybody in the public who may be viewing so they know where to find this information, or could we do that when you wrap up your presentation. >> yes, we certainly can. we can get a slide up for that very quickly. >> great. >> the mayor announced the reopening time line yesterday and launched the sfgov website which is interactive and useful in seeing the progress san francisco is making in reopening. did i have one question about the color coding system.

i realize this is a look back data point, but does replication rate play into the assessment as to whether or not the city can proceed and move forward? of course we want to keep that below unwith, but is there a threshold we're using to be confident in moving forward? >> the rate is a very important estimate of where things stand. it's very hard to calculate on the level of -- with the level of degree that we would be able to use in real time to make decisions. right now, our best model -- our best ability is to look at these metrics, the replication rates that have been calculated so far have been based on the data that has already been collected. so i think it would be more of after affirmation of where things stand retrospectively

rather than moment to moment or proactively looking at where things stand. reproductive rate is based on inputs in multiple data sources and an estimate and based on a model. so the real time ability to respond to a reproductive rate estimate is not not really possible at this time. it takes many days of data, if not weeks of data to come up with a reproductive rate over time, whereas these are looking at a much shorter period of time to allow this to be as agile as possible. >> great. thank you. commissioners, other questions before we move on? all right. i think we can move on to the next part of the presentation.

>> actually -- >> hello. >> good afternoon, commissioners. so it's my pleasure to talk a little bit about the variant process, which is tied closely to what dr. colfax was talking about in terms of reopening and indicators. i wanted to talk a little bit about where we are, why apply to a variance, and our work with reopening and recovery task force. so next slide. as we move into this next phase, we know as we reopen, there's a balance of risks that we have to think about. part of this is the new normal that we have here. so one of these things in the new normal is protecting our community's health as well as

improving the local economy. we know that the delicate balance between those two, the pandemic obviously has had devastating consequences for certain communities, but so has the closing down of the economy. we're really trying to balance those various parts of this whole equation. we know that there's a shared risk framework, and it's safe versus safer. so we don't have the ability to completely make things safe as we open up the economy. there is nothing that has a zero risk. we want to do it in a safer way. to do that, as dr. colfax talked about, we need to ensure that as we open up, we're measuring all of these different factors. so looking at, are we having increased cases and if they occur, are they manageable through the health care system? so really, want to make sure we can get the curve as flat as

possible as we open up. given the virus' effect on our communities, we need to be as flexible as possible and use data and metrics to guide our decision making process. and we need to do all this with an equity lens. so as i alluded to, there's been a disproportionate level in communities with the virus, and those same communities have been impacted with economic closure. so there's, again, a balance here between opening, i can ma -- making sure as we open that we are not having effects on certain communities that are much more disproportionately aligned to the western population. next slide. i wanted to talk about how san francisco has done. this data is pulled from june 9th. san francisco as compared to other jurisdictions as really been remarkable in our ability to control the pandemic.

this really is a tribute to the public and all of our partners, ability to get messages out about sheltering in place and mask wearing and hand washing. as you can see, our cases, as well as the death rates, have been much lower and the death rates are pretty striking actually of how much we are as compared to other jurisdictions. additionally, we've really ramped up our testing capacity and currently -- this is dated -- we're at 2.66 per thousand. that's to say that the public has really embraced shelter in place and that has led to a real big success story. so we do confident that this is the same to start reopening and we started to do that and are looking at the metrics to make sure reopening occurs safely. next slide, please.

i really wanted to talk about what is the variance. a variants allows reopening quickly or a different order from the state's road map. the state laid out a road map from one, two, three, and four different stages. currently, the state is in early stage two, but if you're a variance county, you have more flexibility determining how far you want to go in stage two. various counties have mostly all of stage two available to them to decide what they would like to reopen next. so it gives a lot more local control, and that local control lives with the county health officer. so locally, any type of changes that she wants to make would have to go through the health officer. the variance process has to go through the health officer. the variance process is a written notice that we are meeting requirements per the state and that also has to be

attested by the health officer as well. i want to point out that most counties in the states are variance counties. i believe there are only five or six level that are not. most of the bay area counties are in the process of applying for a variance as well. next slide, please. why is variance important? it's important for several reasons. one, it allows for local decision making and authority on how we can move forward, which will allow us to determine what makes sense for our own jurisdiction. it allows flexibility to reopen parts of the economy at a pace at what you're health officer believes is the appropriate pace. we have local decision making authority. we control what will reopen and in what sequence. we can provide clarity to sectors on when things

potentially can open so that they can get prepared. most importantly, a variance allows a reopening based on emphasis specific data and metrics. one of the things people talk about is it's a lot about reopening, but the variance is clear that we can pause, stop, or reverse any decisions if the metrics are going the wrong way. so it doesn't mean that we're going to automatically reopen everything, nor does it mean that we're not able to go back. we have the ability to do both of those based on the indicators and other data that we get. next slide, please. this in a nutshell is what the variance application tests for. there's several different parts of it. i'll go high level on the major areas that we would have to attest to. one of them is the epidemiologic

point. the second is the protection of our essential workforce. how are we doing the protections and what do we do as -- what are plans as we open up further? the third is our testing capacity, showing that we are making gains in our ability to test and that we have surveillance capacity. the next is our containment capacity. do we have enough case and contact tracers and specifically this one also calls out what is our containment strategy in our homeless population. the next is hospital capacity. this asks if they are able to surge 30% above their capacity. this requires our hospitals to be able to attest to it. the next is how are we going to contain the disease in vulnerable populations including outreach. the state application emphasizes our nursing home populationment.

that's vulnerable. other groups that have been impacted by the disease are also emphasized. the reopening plans are also emphasized, and this is on our website, the san francisco dot gov website. triggering to adjusting. we need to slow down and rethink the next phase or this phase, if needed. finally, it asks for a covid-19 containment plan. the covid-19 containment plan has 9 different doctors associated with it really to talk about, as we move forward with reopening, how are we peninsula being to contain the -- planning to contain the disease, through contact tracing capacity, acute care surge, et cetera. and our containment plan really, we are focusing our containment

plan under three colors. one is equity. the second is through control of the disease, and the third is through preservation of our health care capacity. so through this application, san francisco puts it and then the health officer has to attest we are meeting all of the criteria. next slide, please. i wanted to talk about reopening and how we got to the current phasing of our reopening. this has been done through a partnership, and there are a couple different ways that we determined how to phase reopening. we've used four different factors in this decision making process. the first is our health indicators, including the number of cases, the hospitalization rates, our testing capacity, contact tracing, et cetera.

the second is risk factors. which industries can open more safely? that wouldn't be industries that have a -- would be a industry that has a small number of employees, outdoors, able to do social distancing, workers continuing to work on site. most importantly, another key factor, can workers travel to and from their work. transportation is another place where there's a high risk potential for transmission of the disease. the third factor that we looked at was equity. so as we reopen, making sure that, again, we are not disproportionately impacting certain populations, whether they're essential workforces, they're not being exposed to risks compared to the rest of the population, and if they are, are we able to mitigate that risk? and then the last factor is the

state guidelines. so the state has been very clear about how they want to reopen and what they considered our stages. what is in stage one versus stage two versus stage three versus stage four and what the state has said is that we can be more conservative, but we can't be faster than the state. so based on those four factors, we developed a reopening plan for san francisco, and the mayor announced that road map as was mentioned. the road map is fluid. it is subject to change. this is not a stagnant document. so if indicators change or information changes, the road map will change as well. one of the great things about the road map is we developed these relationships with different industries and so as industries plan to open based on the road map, there's a lot of back and forth on what they need to reopen safely and how we can

provide them that guidance. so right now, we are under phase 2b. that happened yesterday. there was a slew of things that reopened, including outdoor dining, indoor retail, small services and ceremonies to name a few. the next 2c, slated for july 13rd, will have you hair salons, indoor dining, and real estate open houses. these phases would require a variance because at this time, the state has not opened up those particular industries to non-variance counties. next slide, please. so phase three, which is labeled as august and beyond, includes bigger industries such as hotels and hospitality, gyms and fitness centers, child care and

education as well as cultural and recreational activities. there is an economic recovery task force that is looking and working with all of these different industries and will work closecly wit -- closely wih us, making sure that the city is aware of our plans and is working together collaboratively to make sure industries can safely open. next slide, please. finally, what are the next steps on variance? one of the things we're doing is right now we're filling out the application for the variance. parts of that application include we need to get letters of support from the health care system as well as the board of supervisors. once the application is completed, we submit that to the state, and then we basically become a variance county. the state may have some clarifying questions, but it

really does -- from the state's point of view, it's the health officer making the decision whether it's ready for a variance. if the variance is -- if the decision is for the variance to move forward, we can talk about does stage 2 require different sequencing in san francisco based on our variance. one of the reasons this is important is that everything that is allowable to be reopened without the variance has reopened with the exception of schools. schools are really on their own time line because there's a lot of different demands on schools and the ability to be reopened will require a lot of planning, but pretty much every other industry has opened for non-variance counties. so if we are going to move forward with variances, this will allow us a lot more flexibility to determine what things in the economy could open up next. again, with this lens of equity and those that might be

disproportionately impacted by the closure of the economy. paragraph paragrapso that in a a variance is. i'm happy to answer any questions about the process. >> mark, do we have any public comment or do we go on to -- should we do questions now and then take public questions at the end? commissioners, do we have any questions? >> yes. >> commissioner. >> thank you for the presentation. it was enlightening and understandable. i appreciate it. what is the time frame or the time line that you're looking at to be able to get the variance from putting everything together to application to hopefully getting the variance granted? >> i think right now, our time line is within the next 7 to 14

days to try to get all of this together. for some parts of it, it requires that you say you're going to do it as opposed to having it ready at that point in time. so there can be still things pending while the variance is approved. >> okay. thank you. >> uh-huh. >> this is grant colfax speaking. thank you for the overview. just to emphasize a couple things. one, this is the health officer's decision to move forward with the variance. dr. aragon is our health officer, would normally be at the health commission. he is about to go before the board of supervisors who have to vote to approve the variance application. just a matter of procedure here in understanding the structure of this. the other thing to emphasize is that i think -- i don't have the

exact counted and perhaps you do. but over 50 counties in the state have applied and have successfully met the variance, including los angeles county, which, as we saw from the prior slide, has significantly more burden of disease and morbidity and mortality. again, this is for us to bring local flexibility per dr. aragon's recommendation and also a letter from the hospital council that is required to support this work. >> any other questions, commissioners? >> yes. thank you. the process is very clear and it's very interesting that once the variance is filed, it actually is basically approved.

but i'm wondering, because -- obviously, we have great confidence in the medical officer who has been so diligent in guiding the entire process and actually very admirably working with the city attorney to write the regulations, which i think have been clear to everybody and whatnot. they seem to go back and be able to work with you all to work out a program that seems to make sense. how does this -- we have this variation between the different -- the key counties that really don't have the variance or the bay area counties? are we going to be the biggest, the first within the bay area to actually apply for this variance? then will that cause a problem in a lot of influx because there has been in the past influx in

san francisco for certain types of activities? then do we have ability to work with the other counties to work on the safety that's needed on the part of everybody? i mean, we're giving very strong messages to our people here in the city. that seems to be holding. so that's one question. the second one is really transportation. if we start having the ability of very attractive types of services, which, of course, we do want because we need to get our economy going again. how do we assure that people coming into the city and living actually are also going to be as careful about watching for, you know, social distancing and everything as clearly san francisco has in our data? >> yeah. it's a great question. so for the first part, i believe contra costa has committed a

variance application. and i understand that alameda and marin are looking into it. there are multiple counties looking into it. up to this point, the association of health officers has taken a collective look on how to reopen and being aligned. i think there's going to still be that spirit in hand of trying to be aligned. but knowing that every community is different and the needs of it will be different, the point about interjurisdictional transportation and movement is really important, and i think one of the things that we have to think about -- actually, it's taken into account in our reopening framework -- is the movement of people. if we're going to reopen something, what does that movement look like as part of the risk assessment? so we have done a whole risk stratification, the city has, about how many people will be coming into the city, how many

employees will be part o of that influx and what type of work they'll be doing. is that work risky? so that's all taken into account. i do want to point out that there are times that we will make decisions based on equity that may not -- that we will try to do as much mitigation, but because there are equity issues of wanting to make sure certain sectors open up so that people who usually do low wage work have the ability to have a job, will have to do that job and we'll be working closely with mta to figure out how to make transportation more safe in this time because we know there's equity issues in trying to get to your job and being able to access public transportation. it's going to be a major factor there. so you're right. it's a complex question of how to determine risk and ways to mitigate it, and as you mentioned, the bay area is an

inner locking kind of region. so i think this on going continuance of working with our city partners and working with the private sector is going to be essential as well as really monitoring our indicators to see if, as we reopen the sectors, we really start to see spikes. we know that disease will increase, but we need to make sure that it's not increasing in a way that it's potentially going to be exponential. >> all right. just a follow-up on that transportation issue, does that mean that you're also working with the transportation agencies and that as you open up certain areas -- and restaurant workers are an issue of equity as we understand and being a magnet for this type of activity,

there's got to be transportation available that isn't running every 45 minutes or an hour. >> yeah. so the mta has really been working on this. they've looked at specifically areas that there are workers potentially lower wage workers they would need to service more frequently so they can get to their jobs without -- with also this knowledge they don't want crowding at the stations or in those areas and making sure people are masking and appropriately social distancing. they are taking that into account and where which reopenings are essential as we bring on more industries. >> any other questions, commissioners? >> commissioner guillermo. >> thank you. i was -- my question is, it does seem like san francisco is generally more conservative of all of the counties in terms of

its phasing as the opening of things. so i would imagine is that the variance for -- is it that the variances that we might be seeking would be to even delay certain things as opposed to advance certain openings relative to what other counties are doing or the state is doing. so if so, what might those delayed services or openings be? >> so yes. you're right. i do think san francisco has been a little bit more conservative. i think that's because of the density of the city. we are the second most dense city compared to new york. we are at high risk for having a pretty bad outbreak of this disease. what the variance allows us to do is have local control. so the state is moving also --

for the entire state, without a variance, it is also moving at a pretty slow pace right now, and that's depending on some factors within certain counties. so what this allows us to do is go a little bit faster than the state and, like i said, bring in some of that economic recovery into play. but if we decide that, you know, we're going too fast or we see indicators are going a long way, we have that control of stopping progression or turning back as well. but in terms of the state, i believe we've opened everything under the state except schools. schools throughout the state haven't opened because that's a big risk for the unified school districts to be able to bring in students. the target date for that will be sometime in august, if not later. but right now, i believe we've opened everything under the

state. >> commissioner, if i could juse dr. aragon's call as to whether to continue the progression, whether to pause, whether to reverse. right now, without a variance, much of that is determined by the state how far we can go. we also need to acknowledge there are risks here that we do not have a road map that is fully informed in terms of how to necessarily know with certainty if we paste a and d first and wait a while to go to c and d. is that the right timing? is that the right mix? we're making informed decisions, but in many cases, these are things that have to be looked at with our best judgment about what we know now and certainly

we will continue to monitor. it is plausible that despite our best efforts, that there will be a surge. i mean, our peak was about 100 hospitalizations. right? i think one of the questions is, if we are able to reach a level of reopening where the harms of shelter in place are mitigated to a degree, how are we, as a society, what level of hospitalization, what level of icu, what level of morbidity and mortality is acceptable in that balance? a vaccine and an effective treatment is many months, if not years off. we need to understand the risk and collectively determine what

that risk benefit is as we approach this new normal. obviously we are hoping that we don't have a surge that overwhelms our hospital system. that is a possible scenario as we go forward. >> i think the cooperation and enforcement or the balance of those two as we reopen services and the economy is really going to be essential. i know that's not completely in the jurisdiction of the department or of dr. aragon in terms of the jurisdiction he has, but we have been -- san francisco, i think, has been quite good in terms of personal cooperation with the orders. but we've seen throughout the west and even within california

how that changes so quickly. so i think that is something that the variance is really important for us to have in order to have that flexibility to move quickly so that we don't have to make those decisions about, you know, how many hospitalizations and how many deaths and how much disease we're willing to accept in order to get the economy going in a way that we hope it will. >> commissioner green. >> thank you both so much for your wonderful presentations. recently, there's been discussion about mask use and even suggestions from your counterparts in san mateo that we could limit the spread of the disease through universal mask use. i couldn't read between the lines and understand if that is

face coverings or masks per se, but do we have any initiatives or have we had any thinking about making masks more available especially for people who might not be able to access them, can't afford them. is there any type of thinking -- there's been volunteerism in this area. i'm wondering as you talk about public transportation and people in restaurants and so forth, whether there's anything that -- what your assessment of that -- the statements are and what we're doing in that regard. >> yeah. we know that masks are going to be a major way to combat the disease. definitely in public transportation, thinking about ways to have masks accessible to people as they enter, you know, bus stations or a bus itself, and then other places where there may be crowded conditions, other ways we can mandate that

masks get used. the industry needs to provide them. or if public services, are there ways our workers can provide those masks. as you know, in health care systems, it's already mandated. but really looking at other employers in ways that we can ensure that employee safety is maintained. so grocery store workers, clerks, all those people that have to interact with a number of people on a daily basis, that might have more risk of getting the disease. we're definitely looking at those sectors and trying to figure out -- and this is really, again, through dr. aragon's directives, if it's through a health office order. if it's not going to be that way, is there more outreach and engagement and even thinking about people who are doing street outreach. so all of our homeless outreach teams have them, but are there ways we can equip our fire

department or police department with this outreach. it's probably not punitive in that way. we would rather have it be more positive interaction. >> so commissioner chow. >> i wanted to follow up on commissioner guillermo for just a moment in terms of the fact that there might be a need sometimes as the scorecard, which you talked about earlier, has different changes. i wanted to know the process that we could understand that a change might in fact trigger some sort of reaction. is that going to be looking at things over two, three, four days, a week, or every week or every monday at 10:00 you're looking at the scorecard? what creates the trigger for

that? then who works with the medical officer in order to make a determination that there should be then a change and usually a negative change which would be one, of course, that would be really important to be able to support? that means that once again, some of the economic gain is going to go away and then we have a new problem. so can we understand a little bit of that process and how long that might take and how people would be informed about this? >> yeah. so thank you, commissioner. so the indicator -- they're not on-off switches. so it's a combination of looking at the various factors where we are in the colors. it's also not as though all of the different indicators would have to be orange or red before

we would take action. right now, the areas that we're monitoring most closely is the rate of hospitalizations in our health care system capacity. right now, those are the ones that we'll be watching closely. the indicators are going to be updated on a weekly basis so that every week, dr. aragon and the health department team will take a look at those indicators and review and see if there are any indications of change, whether there's a color change in the wrong direction. hopefully there are color changes in the right direction going forward. and then based on the context in which those changes happen, a decision will be made about whether we delay the next phase of opening and whether we actually reverse some of the actions that we've taken. i think there are events that

happen. so, for instance, right now, we're very much cheerfully watching the rate of hospitalizations in relation to the demonstrations to see if there's an indication there is a spike just as we watched other events in may to see if there was a change. what is good is, may 18th is when we started to really open up to some degree, and our numbers continued to stay low. another place we would be watching carefully, of course, is from key areas, school reopenings. so that would be a big change. then also, the reason we're looking at the indicators, we're not just looking at covid-19 capacity. we're looking at overall hospital capacity, med-surge and icu. we're concerned about the flu season and our ability to manage multiple viral outbreaks at

once. so we have that rate of covid hospitalizations, but we also have that med surge and icu overall indicator across our 9 health care systems so they know they need to move rapidly for us to manage. the other indicators, i think the ppe and the contact tracing, those are really indicators. we will continue to work on those. obviously with contact tracing, we expanded our team dramatically. those metrics continue to improve, but we want to make sure we stay in a good zone there as well. but right now, the key indicators are hospitalizations that will be evaluated every week along with the other indicators. >> thank you. just as a follow-up, you

mentioned about schools. we were opening up summer camps. is that something that also we would be following? >> absolutely. we've done that with the best evidence available about how this could be done in a safer way. one thing that we want to emphasize at the health department and dr. aragon and i talked about this quite a bit, we need to ensure that people understand, one, that the safest way to protect yourself is to stay at home. as we reopen, the masking, the social distancing, the hygiene are really important. there is a risk here, and we want to ensure that the public understands that there's no such thing -- there's risk on many of these activities right now. people are going to have to decide what risks they're willing and able to take in this new environment. the recommendations, we'll work

to keep things as safe as possible, but we're really using the term safer rather than safe. again, some of this is based on our best judgment as well as best data we have at the time, but we will surely have to reiterate as we continue to monitor for outbreaks and other situations where we may need to change some of our recommendations going forward. >> thank you very much. >> so on behalf of my fellow commissioners, i would like to acknowledge the extraordinary amount of work that went into preparing this. i understand it's 30 or more pages. so thank you to director colfax, dr. baba for your work in this not only in preparing this but in all of the work that it took to get us to this place we are

where we can be considering this. i would like to express the support and gratitude of the commission for this effort and ask where we are in terms of getting the different endorsements that are required by the state in order to move forward. i understand the hospital system and some others. >> right. it's going in front of the boarn the next hour or so. they have to vote on it. so we'll see what the outcome of that is. then the hospital council has done outreach. we're starting to get hospital letters coming in now. >> great. thank you. commissioners, any other questions before we move to the next item? >> we want to make sure we check for public comment. are there any public comments? >> there's no one with their hand raised. if someone would like to raise

your hand, press star 3. >> we're also waiting -- i'm going to pop up two links. dr. colfax, i'm not sure if you want to display these. one is the data tracker, what mr. bernal had asked to track. i'm not sure what the other one was. >> okay. there's no one with their hand raised. there's no public comment. thank you. >> thank you. >> anything further. >> can you hear me? >> for the specific indicators that i was talking about today, the health indicators link, the second one would be the one that people should go to. >> thank you. >> i apologize. mark, there's one more question that i would like to pose to director colfax and this may be

the appropriate place in the agenda. i know there was confusion about the risk of asymptomatic or presymptomatic transmission based on statements that have been made by the world health organization. would you like to take this opportunity to clarify that for the public and any sa san franciscans that may be watching at this time. >> sure. so asymptomatic transmission does happen, can happen, and is certainly a key factor in propagation of the epidemic. so another reason to wear a mask, socially distance. if you feel well, even if the other person feels well, it's very possible to transmit the virus when you still feel well and that other person feels well. asymptomatic transmission happens. it's relatively common. so we must all do our part in terms of the facial covering,

social distancing. we cannot depend on symptoms to determine our behavior. >> thank you. >> all right. we can move on to the next item, which is item five, general public comment. can you let us know if you have anybody in line? >> there's no one with their hand raised at this time. >> i will leave it up for another 10 seconds just in case. the next is the budget for 20-21. >> you ready for me. >> i think we can close public

comment for this item. >> thanks. yes. and when you're ready. >> okay. good afternoon, commissioners. greg wagner, chief financial officer. so today, we're going to go through the proposed budget for the coming two-year budget cycle. as you know, these conversations over the last couple months, this is a little bit of unusual year. our normal budget cycle occurs in essentially november through february of the year. we did in fact go through that process earlier in this year where we put together a budget proposal and brought it before the commission. that was approved to move forward to the mayor's office. of course a lot has changed since february. in those months, we've really

understood the gravity of the covid-19 situation, the city has updated its financial out look, and we have significant changes. that has essentially caused the city to reopen and in many ways restart the budget process. so whereas right now, we would be preparing for board of supervisors hearing and the mayor had submitted a proposed balance budget on june 1st, that process has been pushed back two months. so on june 1st, the mayor's office submitted an interim budget, which is essentially a placeholder budget that leaves appropriations at the same level as fiscal year 19-20. as indicated, their intent to submit a revised budget on

august 1st. so two months later than normal process. with that change, the mayor's office has also issued new instructions to the departments. we talked about -- a little bit about the numbers behind everything that's happening at your last hearing two weeks ago, but essentially, what has really changed, as we have begun to confront the covid pandemic, there are two things happening. the first is that revenues in some particular areas have really dropped sharply, particularly in our real estate transfer taxes, sales taxes, hotel taxes. some of those areas that are directly affected by the economic slowdown associated with the response to covid-19. then secondly, we have

significant challenge in that we have our ongoing effort around the covid initiatives, which is going to proceed, as you know, into the coming year, two years, at some level. we need to be prepared with the financial resources for that. so what we're bringing to you today is the first part of that discussion. the mayor's office has, as i said, required departments to resubmit their budgets with new instructions, and those instructions reflect the new deficit and, therefore, are more challenging than we had considered in february. what we're not presenting today is the picture for the covid-19 response. that is really simply because the scale and complexity of that, we were not able to put that full picture together for

you on this time line. we're really operating on a time line that's about 1/3 of the normal budget process for this, and we have about three times the complexity that we would in a normal budget process. so we are working extremely hard on pulling together the budget around covid. we have a strategy. we've done a lot of the work, but that's still coming together and will be coming back before the commission at a future hearing. what we do have for you today is our response to the mayor's revised budget instructions. so this is the kind of first step in the process. the mayor's office, if you can go to the next slide, mark, i'll go really briefly kind of through the deficit and the instructions. the mayor's office issued these revised financial protections. we talked through these at the last hearing.

essentially, there is a $250 million deficit for the current year, which the mayor's office has solutions to close that deficit, but for the coming two years, there still remains a deficit of about $1.4 billion that has not been closed and that will be the subject of this budget process. you can see a little bit on this screen and we've got a couple of questions around how -- what this represents and -- i'm so used to reading these tables, i need to be reminded that they're not intuitive. but essentially, what this is is that the year-over-year change in millions of dollars from the prior year -- these are citywide numbers. so, for example, in the first section, under sources where you see general fund sources, fiscal

year 20-21 projected to have $487 million in fewer dollars revenue compared to the current year. so there is a decline projected in general tax revenues. that's for the reason that i expressed. then you can see that those revenue numbers begin to pick back up. the loss is smaller in the future years until eventually those revenues even out over time. point out in the second line, you'll see a negative $132 million in public health revenues. that is a big chunk directly attributed to the financial impact of the covid-19 pandemic on our operations. this is us but it's also pretty

much every health system in the region in the country is seeing reductions in revenue particularly as outpush patienth services have been scaled back as we're taking public health measures to prevent the spread of the disease. so all of this adds up, as you can see, to a significant drop in revenue that will recover over the next few years. then that's compounded by what we knew was already existing before, which is growth in our operating costs, particularly due to salaries and benefits. those are adopted in charter benefits and other operating costs for the city. we have a significant deficit. go to the next slide, mark. in response, the city has issued

budget instructions, and we didn't characterize this exactly directly, but it gets complicated. but essentially, we're asked to provide a 10% reduction in our general fund support for the coming year, going to 15% in the second year, and then add an additional 5% contingency. that's where we phrased it incorrectly. that 5% is in the first year but for balancing reasons it feels like it's a year two for us. those add up to $75 million and $113 million and then $37.7 if we need to meet that contingency. we're going to present our plan here right now about how we will tackle those numbers. then what will happen after this is dph and all of the other city departments will make an attempt to meet these budget instructions. the mayor's

office will compile those and look at the other factors and the budget and determine a plan forward and determine to what extent the proposed reductions are needed to balance and to what extent and hopefully this will not be the case, but to what extent they will need that additional $37.7 million contingency or balancing support from the department. the other things that will still need to happen after this discussion and there will be future conversations with the commission are, as i said earlier, discussion of the covid-19 budget. we know there will be significant investment needed in the department of public health and other areas of the city to continue our efforts in all the things that you've been hearing about earlier today and in

previous hearings, but things like testing, contact tracing, surge capacity for our health care system, locations for quarantine and for other services for populations and individuals that are affected. so all of these financial targets will factor into the city's plan to fund those, and we'll be working with the mayor's office on that as well. the other thing that is still not addressed and will be addressed as we go through the mayor's phase of the budget process are some of the other big important issues that we discussed several months ago but are still with us to some extent more so. that includes a lot of our efforts around things like

behavioral health and mental health program and how we're going to try to continue making progress on that issue despite the changes in the budget. it's really a very different environment, but we do need to align all of that work with what we're doing for the covid-19 response and continue to move forward in all of the other initiatives that you're familiar with. so next slide, mark. so we are doing our best in this proposal to prioritize services, particularly to vulnerable populations. you'll see -- and i'm going to turn it over after this to jenny louie, our budget director, to go through some of the individual initiatives. but we're fortunate to be able to present proposal to you where we are not relying on service

level reduction. so we have largely been able to meet our budget targets, at least the first part without the contingency, without cutting programs, without layoffs. there will be some salary savings and other adjustments, but we are not anticipating big reductions to services, and i think that is largely due to the fact that we have done, as we've discussed, a lot of planning and a lot of work to prepare ourselves for this over the last several years for exactly this scenario. we will be able to weather at least part of this year without seeing some of the types of things that you have seen in past budgets during recessions. if we do need to meet that last

5% contingency, i think that is most likely to change. you'll see when we get to the balancing that we provided a plan here that almost meets our 10% and 15% target. we're short of that simply because we ran out of time and ideas to get to the finish line. but i think we're at the point where if we do need to meet that last 5% contingency, we do not have additional solutions of the nature that you're going to see today that allow us to continue to return general fund to the city without making some of those harder choices. we have, as you'll see, some of the big categories -- i discussed this in the memo that went to the commission about we're relying heavily on revenues. we're relying heavily on one-time solutions that include

things like closing out of reserves, of scaling back on planned capital projects, and it projects and trying to look at those types of solutions that allow us to at least get through this cycle. next slide, mark. all right. so here i'll turn it over to jenny to go through some of these initiatives in brief detail. i'm happy to answer questions. >> jenny louie, budget director. so just to go through the initiatives that we've proposed, some of them will look familiar to you because they are updated from our february submission. some of them are actually verbatim where we main taped mad them.

the first one is our baseline revenues and medi-cal waivers. we've updated these revenues since our february proposal to reflect a lower census and reduce sources we've experienced due in part due to covid-19. so the dollar amount is lower. this is partially offset by increases in our projection to medi-cal enrollment. again, due to the economic downturn, we are expecting an increase in the number of people on medi-cal and we're assuming that additional 7,000 members by the start of next fiscal year. net overall, we expect this to be a positive revenue for us of $10 million in the first year and increasing to $28 million in the second year. just by way of comparison, in our original budget, we assumed $38 million and then dropping to

$24 million in the second year. initiative a2, the one time settlement from medi-cal, we projected $65 million in february, and essentially, this initiative still holds. we made a minor adjustment of $4.1 million that we actually receive in the current year. that was used in part to help balance out the shortfall that we saw in 19-20. so because it's already been assumed before, we can't double count it again. we just made an adjustment to reduce the revenue that we've already received, but we believe this number will more or less hold true for us in the upcoming year. it would generate a one time general fund reduction savings of $61.8 million. initiative a3, our baseline revenues at this point, there are no changes to our projected baseline from february. so we're keeping them at 6.5 and 12.1 million. the savings from the

decommissioning it legacy system, we projected we were going to receive $8.6 million of on going savings from being able to turn off the systems with the successful implementation of our new epic system. we are going to add one time savings of 4.4 million to close out additional pos, purchase orders, that we have. we are pretty much ready to shut that system down, and we think that we've covered all of the liabilities on the prior year to make that transition. i believe we can achieve 4.4 million of savings in addition to the on going savings that we presented earlier in february. initiative a5, federal programs for population health. there's no change. our backfill needs remain with

supporting immunization. so that's a revenue loss that we experienced of half a million dollars in both fiscal years. our specialty pharmacy expansion holds true. there's no change as the budget neutral expansion to create a specialty pharmacy. the cost of 3.3 and 8.8 million, we still believe will be offset by 340b revenue. there's no impact overall. finally, a7 is a new revenue initiative that we submitted. this initiative adjusts revenues for primary care, behavioral health, and population health with reduced levels of activity we have due to covid, includes 4 million for primary care, 29 million for, and 3 million for substance abuse. part of this was that negative revenue that you saw in the first slide. that was presented by

mr. wagner. these are losses, and in addition, we also included losses due to lower volumes expected for applications and fees for environmental health and other areas such as vital records. the losses are offset by 28.2 million in cares revenue expected for next year. the net impact is one time, 13.1 million overall. it's an additional funding loss that we have. we go to the next slide. so we also, in addition to the revenues updating the revenue projections and the savings that we had initially proposed, we are adding 7 or 8 new revenue savings reductions. the first one is reducing jail health services due to the closure of the hall of justice. last month, the board of

supervisors voted to close the facility which houses county jail by november 1st. so we are proposing to reduce the number of ftes we have, three rns and three lvns. we had about 17ftes supporting the hall of justice. we're only looking at a eliminating six of those positions. the remaining 11 will be moved to support other parts of jail health. i want to be clear this initiative will not result in layoffs as we will reassign any staff that would be affected to other vacancies within jail health or health network consistent with our labor mous. this will save about 600,000 in the first year and then achieve a full year of savings, about a million in the second year. initiative a9 looks at laguna honda's operations and reflects one time savings that we will

achieve, a one time salary savings of $1.5 million to slightly lower than expected average census due to sort of a one time dip as we restrict admissions for the next few months. we do expect that census to come back up by the end of the fiscal year. in addition, we'll achieve a one time savings of $515,000 while the kitchen is closed. this was actually an initiative that was supposed to happen in the current year, but due to covid and the restrictions on visitors on the campus, we delayed this project, but we do expect the kitchen remodel project to happen in 2021 once we lift that restriction. we will be -- because the kitchen will be closed entirely, we'll be bringing a contractor on to provide the services --

food services for us for about five months and then we will achieve about half a million of one time savings because we will not be purchasing food for our residents. we looked at the operations of san francisco general. there are three years where we think we believe we can save. the first two are related to materials and supplies and per diem nursing, which is sort of consistent with the revenue initiative that we presented on the other slide, which is due to sort of a lower census due to covid. so we believe we can achieve one time savings of $1 million per diem and $2 million for materials and supplies. in addition, we are making an adjustment to the uc affiliation agreement because similar to the city and county employees, for

the physicians, the state has frozen their salary increases. so we believe we will achieve 3 million due to that freeze. the net general fund savings of 6 million in the first year and 3 million o ongoing. a11, additional it savings. in addition to the ehr savings that we mentioned earlier, the it division identified several adjustmentses to our targets to look at existing maintenance contracts and additional services to try to find alternate solutions or perhaps a delay. this will result in savings of $1.7 million in the first year and $1.1 million ongoing. for facilities, we looked at two areas. there was one rental cost for civic center relocation that was planned. it was related to the security. so the first one, we had

budgeted additional lease costs to relocate to a safer location. this is part of a larger plan that was developed by real estate to shift many city departments, not just dph, around the civic center. there was a site on valencia for our tenants. we had budgeted some funding for the rent increase, but right now, the projected lease costs are $1.6 million lower in the first year and then $400,000 lower in the second year. in addition to that, our security director has reviewed our current security staffing plan and adjusted our staffing to reflect our current needs. this results in on going savings of our security work order of a million each year. so net overall between the rent

savings and the security, we're expecting $2.7 million in savings in the first year, dropping to 1.4 million ongoing. a13 is something that commissioners, you may be familiar with. as you know, this fall, we transitioned healthy kids to medi-cal. with that transitioning of the program successfully, we can achieve 1.4 million for savings of the insurance premiums we pay for as well as administrative and marketing costs that we provided the san francisco health plan as we mentioned earlier, there will be no loss of coverage for the participants as a result of this change. so, therefore, we're going to achieve 4.1 million ongoing in savings. a14 is the changes in the prior area settlement methodology. this is a little bit of a technical one. bear with me. basically, we will be adjusting

our methodology for how we reserve funds for potential audit settlements. basically, what this allows us to do is ordinarily, what we would see is prior clear closeouts at the end of the fiscal year of contract costs, liabilities we thought we would have to pay. ordinarily you would see them as part of our quarterly financials at year-end where you may see a surplus in contracts. what we're doing instead is we're going to create a reserve up front using some of that savings starting in 19-20. once we have the savings, once we have that reserve, we will use that reserve to pay out the prior year pos and we'll hold it and we'll move it forward, replenish it as needed. we believe this methodology would allow us to recognize $7 million in savings to contract

line and overall. but i want to be clear about this. this is not resulting in any changes of service reductions or funding. it's merely recognizing savings we ordinarily would, as part of our actual -- we're moving it forward so we feel it as part of our budget instead. a15, the financing of capital projects, again, another slightly technical initiative. we're working with the office of public finance and the capital planning committee to set finance about 38 million of capital project of dph. this will result in about 4 million of debt service costs moving forward, but part of this portfolio, we're going to include two projects that were already previously funded. initial work has begun, but we

believe that by the time this finance happens, we'll have a projected balance of 18 million to be able to release as cash and liquidate and offset by the 4 million in terms of debt service, wit but it's a great te to be in debt if you had to be in debt. it is fairly inexpensive to finance projects and then sort of creates additional cash flow that we can recognize. the next slide, moving on to emerging needs, again, these were the initiatives that we put forward in february, and after some discussion, these were things that we put forward because we believe that they were important to dph operations and sort of moving forward with our covid response, we believe

these initiatives were still needed. i mean, we weren't doing them just because we thought they were fun or we thought that we had money, but we thought they were important for the operation. so, again, just as a reminder, the first one is quality management and redesign of our compliance program over at laguna honda and within the network. so in addition to not only supporting our quality and compliance efforts there, they will also support our infection control program over at laguna. our maternal child and health equity initiatives, which included the dual access program and the perinatal equity program, they are all focused on pregnant black, african-american women and young families. again, the need exists and we're moving forward with it as originally planned.

we did pull back on the dsfg operations program simply because, you know, as we were looking at a reduced census, this initiative was originally developed to address the fact that we were sort of operating above our budgeted census and we were trying to right side it. given that we're projecting a lower census sit, this didn't feel like the right time to move forward with it, and we could possibly reconsider this in future years, but we don't believe it will be needed in the upcoming fiscal year. lastly, strengthening hr, again, this initiative remains unchanged because of our need to support our workforce, to make sure that we are making critical hires and developing program infrastructure for new

initiatives. so we have kept this as is. overall, we are still putting forward 5.3 and 7 million of investments back into the department to make sure that we can continue to support our regular operations as well as our covid response. next slide, please. so the contingency reductions, we don't have a specific detailed plan, we will work with the mayor's office, should we need one, and it's possible we would need to propose reductions that would include program service level reductions as well as elimination. but we don't have a specific plan outlined at this time. next slide. so when we look at the balancing that we have overall, we're 2.8 million short in terms of our target, but considering the order of magnitude of savings that we were able to come up

with over the next three weeks, without service level reduction, we feel pretty good about the proposal moving forward. we would like to work with the mayor's office on the remaining balance as well as any contingency reductions that we would need to provide. next slide. in terms of the next steps, with your approval, we would like to submit this plan to the mayor's office, work with them to finalize our proposed initiatives, look at any contingency reductions, and then the development of our budget for covid spending in partnership with the emergency leadership that will be leading the effort for the city. in addition, we will work with the mayor on any additional priorities that she may have. so we will keep the commission informed as we move forward, and

then just next slide will provide a set of next steps and dates that we have. so we will -- we plan to submit the proposed budget to the mayor and controller's office later this week, assuming it's acceptable to theition exam. to theition -- commission. we'll have additional hearings on july 7th and 21st. as we have updates available, we will keep you informed. august 1st is when the mayor submits her balanced budgeted to the board of supervisors, and then within august, we'll have the board of supervisors budget and finance committee hearings. then by mid-september, full board of supervisors hearings and by late september, early october, the mayor will sign and adopt the proposed budget. so those are the next steps that we have. that was a lot of information. mr. wagner and i are happy to

answer any questions that you may have. >> yeah. i just wanted to add one kind of more peace of context to -- piece of context to this. thinking about this globally and stepping back, this is a big change for us, and rather not be in a position to be having a kind of -- make all of these changes. but really kind of stepping back and thinking about where this budget is going to end is we are making these reductions, and it's going to cause us to have to tighten our belts and be tighter on our financial management. at the same time, we do know that the end purpose of this also is that this will help

contribute resources to the city that will be available to fund our covid response. that will be the next piece that's going to be coming. so we'll be proposing these budget savings targets, and then we anticipate that we will also have significant investment from the city in our covid response, and it's going to be significant. so i just want to make sure that we have that kind of context in mind, that this is one piece of the puzzle but that the city -- there is a clear commitment up and can down from the city in making sure that the dph is going to have the resources needed to continue our response. >> i just want to thank greg and jenny for their incredible work on this, very late nights in really getting the commitment from the divisions, the director

divisions to manage what's been really a difficult situation. obviously, the pandemic response has been the focus of our attention, but as we all know, there's been a fiscal crisis in parallel with this. jenny regularly has done a great job of helping us manage that while we also manage covid cover. covid-19. thank you for your work and perseverance. >> let's check public comment before we go to you for questions. can you let us know if there is any public comment requests. >> if there's anyone that's listening right now, can you please press star 3 to raise your hand if you wish to speak. >> let's wait 30 seconds to make sure we give them time.

while we're waiting, could you raise your hand -- [ poor audio ] >> mark, i know there was -- >> there's no one with their hand raised. >> mark, i know there was one question that we had received via e-mail, and jenny, maybe you can kind of talk through -- it was on slide 9, which was the summary about how the line revenue growth assumed in deficit factors into that calculation. that's 59.3. >> sure. yeah. so mark, i'm going to have you toggle to slide 9, and then i'm going to have you jump back to slide 2. this is a bit of a technical

issue with how we sort of look at budgets and how we track the costs within -- as they manage the deficit. so if you look in that second line where it says revenue growth assumed in the deficit, commissioners, i know you've seen this line before in prior years, but ordinarily, what you do see is usually you see positive revenue growth. usually you see positives in both your -- because we're assuming baseline growth as part of the deficit, it's assumed and it helps reduce the deficit. it also helps to reduce and offset some of the additional inflation costs that we don't have to present to you every year, such as our salary, mou -- better mou driven, fringe benefits, which always have inflation, rental cost increases, capital programs,

equipment requests. those are things that are covered by the mayor's office and are assumed as part of the deficit. so ordinarily, you'll look at expected needs. they put that into the deficit, and then they look at the revenue opportunities that we have. so they usually assume some small baseline growth. ordinarily what you see is a positive number there. i think in the prior -- in the february submission, i think we were looking at something like 20 and $40 million positive. that was already assumed. but in the scenario that is being presented as part of the projected deficit, this is projecting a revenue loss of -- mr. morewitz, if you can go to slide two of the presentation. basically, if you look at that second line where you see the public health revenues of $132