again, if we can have a regular agenda item on the parks we could get ideas and again, the transition housing i think we have that on the agenda it is important and that's it. thank you very much. >> that covers a grateful of the issues and yo mark. >> numbers numbers numbers of it's received and answers that is acceptable what is achieved and was hear that every last number of meetings the only woo to have a solution is to have numbers and they are correct. >> we said earlier forcy housing and really, really

wanted to know the with regards to rent i'd like to have that the only other question i have through the chair and director, you know. beck but mercy housing and john stuart really, really want them to tell us the conditions of residents in regards to rent and eviction in any and to get to the bottom of all the questions. thank you. >> la shawn. i'd like to follow-up i brought it up last time about the the daycare on island want to see the numbers and staff also like to reiterate lending my help to the ar w s and tida to coordinate and

suggest the u.s. department of housing and urban development definitely be here at the next meeting to answer or help to translate this information and how it better suits who that pertains to and also like to suggest that we bring up the discussion for another on island meeting as quickly as possible we needed to hash out those problems not problems but concerns i'll say at home. so - >> i think that, yes there be another on island meeting they'll have that in probable the fall and we'll schedule that shortly but those are not those items and on the agenda today and have another agenda for the

next meeting actually (laughter) to regulate that time and have other speak as well. >> great job >> thank you all both of you have stayed this long. >> thank you for being here and we look forward to (unintelligible). >> thank you. >> (clapping.) >>. okay. >> so i think we can adjourn. >> adjourn. >> happy birthday kate. >> happy birthday kate. >> (laughter.) >> >> (clapping). >>

you're a muted. good morning. the meeting will come to order. welcome to the june 14th meeting of the budget and appropriations committee. i'm supervisor connie chan, chair of the committee. i'm joined by vice chair rafael mendel. men supervisors safa and hillary ronan, our clerk. it's brent jalapa. i would like to thank us of hgtv for broadcasting. um this meeting in mr clark, do you have any announcement? thank you, madam chair, just a friendly reminder for those in attendance to please make sure the sound cells, cell phones and electronic devices so it's not to interrupt the proceedings here in the chamber, the board of supervisors and its committees convening hybrid meetings that allow in person

attendance and public comment while still providing remote access and public comment via telephone. public comment will be taken on each item on this agenda there's attending in person will be allowed to speak first, and then we'll take those who are waiting on the telephone line for those watching remotely extremely through s have give tv .org the public comment calling numbers streaming across the screen and one connected. you will hear the meeting discussions, but you will be muted and then listening mode only when your item of interest comes up. ah in public comment that's called those joining us in person should line up to speak and those on telephone should dial star three to also be added to the speaker line. if you're on your telephone, please remember to turn down your tv and all listening devices you may be using in each speaker will be allowed up to two minutes to speak unless otherwise stated. alternatively you may submit public comment and writing and either of the following ways he mailed them to myself. the budget and appropriations committee clerk had b r e n t dot j a l i p eight had s f gov .org if you submit public comment by email.

yeah. via email. sorry i lost my spot, okay? email yes, it will be forwarded to supervisors and be part of the official file and, um i'll see. you may also send your written comments. have i a u. s postal service to our office in city hall. that's one dr carlton beagle that place room to 40 for san francisco, california nine for one or two in ferrara hearings this week. we are working with intra graphics to provide interpretive services during public comment in spanish and chinese. and today we're working with gloria rivera and flora wong. as well as raymond boris from our office of community engagement, and we're going to fairs to provide services in filipino, starting with gloria and flora, can you kind of provide our public comment? instructions and language, please? gloria um, this is the floor. i would go first. then um i'll go with chinese that got home. you you u

things here and madam chair that

concludes my announcements. thank you. and i also want to thank you, mr clark for propping and working so hard and preparing us for today and really the coming next two weeks. i just want to start off with thanking you for not just hard work leading us today. but all the hard work to come as well. thank you. with that said, um, i'm sure clark before you call item one. we will need to excuse supervisor shaman walton until he arrives today. i'm going to make the motion to excuse him. and may i have a second second by supervisor sephardi and roll call. on that motion has seconded by member safa that member walton be excused until those their arrival. the vice chairman, gentlemen, i'm member sophie. suffer. you remember running. run a knight chair, champ. we have four eyes with member

walton excused. thank you and the motion passes. and with that, um. i would like to quickly explain how today's agenda will run of starting from item two and onwards. we will be taking budget presentation from each city department in the order listed on the agenda you see today, uh and then some departments will have additional legislation also known as trailing legislation titled they're, actually, they're department budget. um, and so we're going to go through that. um but so when each city department that has also the trailing legislation that comes with it will also be called at the same time, a company that city department because of the trail legislation. those trail legislation will require and allowing us to open for public comment with those items. so um, of course, those chill items also have the budget and legislative analyst's report so we'll have the department, uh, presentation for their budget and then the trailing look. gestation presentation and then

go to the blog report. then we can go into questions and comments and then go to public comments for those legislation. and so with that, um mr clark, please call item number one. yes madam chair item number one is a hearing to discuss the controllers. fiscal years 2023 to 2024 and 2024 2025, or revenue letter and controllers discussion have the mayor's proposed budget. how members of the public who wish to provide comment on this hearing should call for 156550001. today's meeting ideas to 5910926245. then press pound twice. and if you haven't already done so they'll start three lined up to speak. he promptly and to get that you have raised her hand. and when the system indicates you're having and muted you may begin your comments. madam chair. thank you, and we have the controller. hi we have the controller to present this item. thank you. good morning, madam

chair members of the committee. ben rosenfield city controller. um, as you're aware, the charter requires the controller to review the mayor's proposed budget and provide public commentary on our findings of the reasonableness of the revenue assumptions in them. additionally the board of supervisors and mayors and mayor over time, have created additional reporting requirements on things like reserves and baselines and other compliance questions. um we rolled this analysis into a document, which we call it referred to as the revenue letter. we published it earlier this week, and it's available on our website. um and we can very briefly talk through it here today.

there you go. okay. next slide, please. so i will very briefly open with the summary, and then i'll turn the presentation over to carol lu are citywide revenue manager to talk through many of the details in the report at a high level, we worked very closely with the mayor's office on the preparation of the revenue forecast in this budget , so we do find that it's reasonable. generally speaking that that economic forecast i assumes what we've been experiencing in the current year. continued slow economic recovery here in san francisco, although not yet back to the level that we were at prior to the pandemic. you see that economic growth translated until most of our economically sensitive taxes, with the big exception being the persistence of remote work and the impact that's having as a drag on our

economy and uncertain tax revenues. we know that the budget is heavily balanced on one time solutions. um and that means that we should expect a lot of significant structural budget gap when we begin next year's budget process are preliminary estimate would be approximately $500 million shortfall for the year that lies just outside of the two year budget. that's here in front of you. um and then, lastly, as has been true through throughout the pandemic and recovery we need under remember that the budget is a plan. um and that circumstances will change as we go through it, and it will take active monitoring by our office and active management by the mayor and the board. in the 12 months and 24 months ahead. so that very high level opening alternate over to carol liu to go through some of the details. i'm excited. all right. um so key findings of the report, um, tax revenues or tax projections are growing. but slowly, um, has

been mentioned, um in that drag is related to the impact of remote office work on activity in the city. um adjusting for rate changes. many of the economically sensitive taxes are projected to remain below pre pandemic levels, um, in the budget period, including business sales, hotel and transfer tax. um one time solutions were critical to balancing and they included $405 million of fund balance, which included $117.2 million of prior year. d appropriations. um $250 million of fema reimbursements. $172.3 million of reserve draws. $125.9 million of temporary fund shifts, and that adds up to about a billion dollars in the two year budget. um as mentioned reserves are used to balance the budget, but the city is not eligible to withdraw or deposit into the economic stabilization reserves, so those balances remain, and by the end of the

two year budget, the city will have used a little bit more than 40% of its pre pandemic reserves to support ongoing operations. next slide. um this budget makes some progress towards the structural budget gap identified in the march update to the five year plan. at that time, the 25 26 deficit, which is the third year the year after the two year budget, it was forecasted to be $724 million. but given the solutions proposed in the mayor's budget, the shortfall in 25 26 appears to be over $500 million um the final budget will require active monitoring and management given the economic and financial risks. um these risks include slowing economic recovery or potentially recession delays in the re certification of laguna honda hospital and risks to state and federal revenue streams. um at the state level, they're likely to, you know, the state is likely to face the same kind of

economic pressures, the city faces and um and that could result in potential cuts to cities and counties. at the federal level. our largest risk is related to the pace and size of reimbursements from fema. we've received about 40% of the total reimbursements that we are anticipating. next one. there are several notable legislative proposals assumed in the budget . that impact revenue. um the first are three business tax proposals, which, um, with the total all funds, impact of $31.8 million in fiscal year 23, 24 and $38.8 million in 24 25. so those three proposals are the commercial rents tax deduction for sub lessers. the impact is $17 million per year. the delay in grocery seats tax increases for certain businesses. the impacts there are 10.4 million and 10.6 million in the budget years and tax credit for new

businesses locating into the city 4.4 million in the first year and 11.2 in the second year. so all of that's assumed in the forecast. um second, there are a number of voter adopted spending mandates that the mayor's budget office must adhere or that the final budget must adhere to, um, and those are met with temporary modifications. um to the early care and child early care and education baseline as well as changes in spending categories to the our city. our home fund, which is funded by the homelessness, grocery seats, tax. um and then, also important to note is that a number of newer baselines have provisions to suspend growth in the baseline if the deficit reported in the march 5 year financial plan exceeds a certain threshold . this threshold was met for four baselines and growth is assumed to be suspended in the budget for those baselines. um and finally another piece of legislation that increases the minimum compensation rates for

nonprofit and public entities over a period of time in the budget funds. those increases next. so they all funds budget is $14.6 billion in the two budget years, and the general fund is about half of that 6.9 billion in fiscal year 23 24 and 7 billion in 24 25 and the most significant source of the junk into the general fund is our local tax revenue. um, of that we've shown the biggest sources on this table property, business , hotels, sales transfer and executive compensation, taxes and by 24 25. these taxes will make up about $4 billion of the general fund. so when you look at the growth of these taxes, pre pandemic 18 19 2 now or two through the budget years, 24 25 . you can see that our sources are expected to grow 11.5% over six years and on its face that

that seems okay. but the point we want to make here is that the sources with asterisks next to them these how these are either new sources or have had rate increases post pandemic next slide. um once you exclude the impact of those three asterisks policy changes, growth falls or sorry of those three taxes growth falls to a very meager 4.1% over six years and in fact adjusting for rate changes, business and transfer tax are still performing worse in the budget years than they had before the pandemic. and the three policy changes i'm referring to are the 2020 prop f um, which expanded and changed that business tax rates 2020 prop i, which doubled transfer tax rates on the largest transactions and 2020 prop l, which taxed executive compensation. next. so here's a graphical look at some of our most economically sensitive taxes starting from 607 through

the budget forecast and the dotted vertical line shows where we are estimating what our estimates are for budget. um and all of the lines you can see drops in fiscal year 2021. although transfer tax it's delayed, it's dropped his delayed, um until the current year 22 23, and then you can see the trajectory of the recovery that's being forecasted in the budget. i'm next. i'm a bit more detail about what we're assuming and property tax roll growth is assumed, um, of 4% and 2.5% a bit less than a million dollars of property tax is assumed to be diverted to support various tax increment financing districts, including redevelopment projects and infrastructure financing districts. and then we're assuming refunds of 64 million and 103 million in the two budget years will be paid when the assessment appeals board makes determinations on reductions, and this is where we capture our assumptions about reductions and values for various property types. um and

business tax. this is just this is really referring to the general funds, grocery seats tax . we're assuming underlying growth of zero and 1% with remote and hybrid work continuing indefinitely. and as previously mentioned, we assume the property tax changes being proposed or passed. next. hotel taxes assumed to continue its recovery in the budget period after a more than 90% drop in fiscal year 2021. hotel taxes not anticipate to recover to pre pandemic peaks until well after the budget years. um the recovery and hotel tax so far has been led by leisure travelers and their pent up demand for travel, but to fully kind of regain our position on hotel tax will need a combination of more business and international travelers and critically convention business, which is what drives up revenue through compression pricing. um and just for context in 18 19, which was an unusual peak. there are 54 conferences with over 700,000 attendees. and in the

current year we've had 26 conferences with a little less than 200,000. attendees um, depicted here is revenue per available room, which is an industry indicator that correlates with hotel tax receipts. current months of taped rev. par i am through early june is about $150, and the budget assumes annual average rev. part of 100 and $78.60 in fiscal year 23 24 and about $200 in fiscal year 24 25. and i'm just for context. pre pandemic annual rev. par was closer to 250 million, so we have a ways to go. next. with remote office work and rising interest rates. transfer taxes plummeted in the current year. the budget assumes that the current year is at the bottom of transfer tax and that we will take four years of modest growth to return to a new study state by 26 27. this is the most general funds most volatile source where less than 1% of

transactions drive more than 50% of revenue. um and unfortunately , those highest value transactions have stalled out recently. um this picture shows what transfer tax would have been had the current rates been, in effect all the way back to, uh, 01. and you can see a few things. um first the huge drops during the dot com bust in the great recession, um, they're huge spikes as well. um, and so that's how you can see the volatility. um and then second, the orange shows revenue generated by sales over 25 million in blue show sales below that, the smaller the low, the smaller sales stayed relatively constant compared to orange and , um what really drives the taxes. these large transactions. thanks. alright so the comptroller's office is required to measure and report on various voter adopted spending requirements and we discussed 17 requirements in our report totally more than $2 billion, just highlighting a few key points. the budget temporarily

temporarily lowers the early care and education baseline by $2010 million in the two budget years. um the budget includes $11 million.35 million dollars of new student success fund funding to support um san francisco schools passed by voters and fall 2022. um and several baselines are funded above the minimum required levels and several baselines are suspended due to the size of the deficit. as of march. up next. finally this is, uh, snapshot of our reserves. the budget uses 100 and $72.3 million of reserves on the major draws included $90.2 million draw on the fiscal cliff reserve in 23 24 and that had already been used in the second year of the prior budget cycle. um $41.3 million of the federal and state emergency grant this allowance. reserve in $29.5 million of business tax stabilization reserve. um in addition, the

budget makes required deposits to the general reserve, 2% and 2.25% of projected general fund revenue and the two budget years as specified and administrative code 10.60. and finally, the budget maintains a balance of $380 million in the economic stabilization reserves, which is our combined rainy day in budget stabilization reserve and as i mentioned earlier, the city is not eligible to deposit or withdraw in the budget period. um so i think that's it. um, you have any questions? happy to answer them. thank you. i just want to quickly point to the summary that you have and i just want to emphasize that and try to die deeper into that is that, um here it talks about, you know the budget and really how we're been balancing this budget. um both this year, and next is the fact that we actually are

drawing on available reserve. um, and that. i just want to make sure i understand it correctly. so while is maybe true that in two fiscal years from now we will be reducing. you know some of the stuff that we're doing right now in this budget, or the mayor's proposed budget will lead us in the space in two fiscal years from now. um that likely we have just about $500 million deficit. but even then that really require us to end in that space actually really also means that the proposed budget is using approximately 43% of our reserve . so it's 620 million out of the $1.4 million. um yeah, the $620 million use of reserve. that's over the period from 2018 19 through 24 25 the budget. the two year budget uses 100 72 million. but since the pandemic hit we've used um $620 million.

and so then that means like in the two year two fiscal years from now we're down to half of that. $1.4 billion reserve. roughly half that's correct. that could carry us our form for another. if we continue this pattern since the pandemic um, if we say we're going to use up all our reserve, um as the current rates of spending, um what is the projection that were does that am i am i understanding correctly? does that mean that actually could carry us out for the next? with the remaining of the reserve. if we want to draw it down to zero, like no reserve at all that kind of carry us for another four fiscal years. um thanks for the question. we haven't done the exact analysis for that. um and i guess there's a couple things

first in the kind of pandemic times there was. it wasn't just the reserves that balance the budget. there was also oh, gosh . almost a billion dollars. i think of arpaio and crf monies from the federal government. so disaster relief monies that kind of bailed out the city a bit or not bailed out but helped to balance the budget. um and i know there were other one time sources in that period. um and then the second comment i'd make is that, um, the some of these reserves, especially the economic stabilization reserves, have very specific withdrawal requirements, so revenue has to decline year over year in order to draw on them. um so i don't know we'd have to. we'd have to do the analysis to know how much how that could, how we could deplete all of our reserves. i yeah, i appreciate that, because i just i think that there's a lot of, uh, general public trying to understand. you know, when someone comes to me and asked me about well, how much is

in the reserve? how do you tap into reserve? i just wanted to have a quick conversation about while we have reserves. there are different kinds of categories different ways to draw them and different threshold. and so i just want to be on the record about that about just specifically armed reserve. if i may, madam share just at a very high level. the proposed budgets draws on the reserve would leave the city with about $800 million in reserves at the end of the two year period, but not all those reserves would be available for structural problems after that, because approximately half of them 400 roughly $400 million, a rainy day reserves that can only get withdrawn effectively a foreigner recession. and so if we're we wouldn't be eligible to draw those given the revenue forecasts we're looking at here. um and if we were eligible to withdraw than that $500 million structural gap will be much higher. um so that's about half of the reserves are held for

that purpose, leaving about 400 million and of that 400 million roughly 100 and 50 million is the required general reserve that has to be budgeted each year to absorb the shocks that happened within a given fiscal year. so that leaves would leave us with about $250 million of the 800 million at the end of the two year period. that mayors and boards in the future could choose to draw down to kind of softly more softly land given that $500 million forecast and i also want to add to like one of the reasons why some of the another reason, i think, um carol, you add. ms liu has also mentioned and you're welcome to confirm this is that one of the reasons another reason that we're able to land where were are at in terms of a balanced budget also is because roughly a $1 billion of federal like funding and support, so it's not only that we're dipping in travel reserve, where actually also are getting this just a large amount. i'm president

amount that we would never have before from the federal government's that actually help us through the next to last fiscal years and next to that's absolutely correct. the heavy reliance on one time solutions that we reference the biggest single piece of that is federal revenue that we hope to continue to receive as reimbursement from fema. you have reserved draws, and then there's other one time solutions proposed in the mayor's budget, including some of the fund shifts, for example, that have been discussed and will be discussed. um and other and lastly, the other big piece of one time solution just to highlight is that the mayor's proposed budget reverts approximately $120 million in projects that were appropriated in prior year and uses those balances on a one time basis to balance the budget. so that means not only that we're having the federal unprecedented federal, um money and then we are dipping into our reserve. but it also that roughly $128

million of. in her words, in the mayor's words, unspent money that we now keep as not to send it out the door in order to balance it it for this at least this and next fiscal years. um would you categorize than you know, two fiscal years from now like this. the city and county of san francisco and general speaking like we're going to face of unprecedented like challenges if we do not like solve the existing structural. issues that we have with our budget as we talked about in the five year forecast that are three offices published, um you know we have budget problems right in front of us. that's the two year forecasts that you're grappling with right now is aboard. but structurally. after that deficits grow in two years 34 and five absent correction. um and so i do think budgets are

going to get progressively harder for the next several years. it actually won't be two years from now that we address this because this time next year you'll be planning a two year budget. that incorporates that second year. and that that the beginning of that kind of structural gap could you help me? understand what structural what do you mean by structural gaps. i mean, in the forecast that in every year of the forecast, revenue is growing more slowly than expenditures. um and then, additionally, one time solutions that have helped carry the city this point through the pandemic and our recovery are going to be exhausted. and that means that you have kind of a growing imbalance each year. between the amount of money the city is taking in that year and the amount of money going out that year and so those will take ongoing corrections as we go. through that cycle. to the extent we use one time solutions in a given year to carry us it helps in that year, but it leaves a bigger step to take the

year after, um as we work through the cycle, so i do it again. the economy is growing here in san francisco, and i was standing some of the news you might pick up these days. um but it's growing slowly. um, and we don't expect that and we expect that that will continue to drive budget challenges for the city for several years. thank you. controls and found. i don't think that's the news that any service cisco wants to hear, but i think that's the reality that we must face. thank you. i with that. i don't see any names on the roster. uh kind of depressing anyways, to continue with this. not that way. i think we've been hearing this for the last six months. i think this body understands that we've been having this ongoing conversation that the three months and the six months and the nine months report, i think that it's the reason why my colleagues are just we understand. we understand with that. let's go to public comment, mr clark thank you, madam chair members of the public who wish to speak

honda controllers. revenue letter. um and our joy next impression to line up to speak now for those who have joining those remotely and haven't already done so press start three to enter the speaker line , and for those already in the queue, police continue to wait until the system indicates you have and then muted and they will be second to begin your comments. saying that one person speakers here in the chamber miss second life. it looks like we have one color. if he could meet that person, please. good morning, david pill people so first two quick housekeeping items. the committee packet in legislative for this item one is actually the packet for item two. so perhaps i could get fixed at some point and to chair chan. thank you for clarifying the expectations for today. in terms of sequence. i'm not sure that budget and finance is going to start to it, maybe sometime thereafter. but if we're walking through things in sequence that helpful. including public

comment on the budget, which is unusual for today, but i appreciate that that may happen on the controllers revenue letter. i appreciate the detailed discussion. i think it's incredibly helpful. um i agree that risks here include economic recovery, including the future of downtown hotel, office and retail. plus federal and state revenues, in part due to the delay on the income tax deadlines for both federal and state. i think that in the future we should carefully review the baselines and set asides with more consistent language. um. particularly around triggers. which varies for a variety of reasons. and finally, i agree that the projections are reasonable, but i would underscore the discussion you just had on the

reliance on volatile sources and the structural issues with the imbalance between revenue growth and expenditure growth. um all of those are challenges going forward. thanks very much for listening. take it to pill paul for comments. yeah. and madam chair to complete her cue. thank you see no more public comments. public comment is now close. and i will like to file this. i would like to make the motion to file this hearing 20 a second. second by vice chairman delman and roll call, please. and on that motion, seconded by vice chairman roman that this hearing be heard and filed, vice chairman norman mental men i member selfie. suffer. remember on it. ron and i remember walton walton. i chair chan. i have hobos. thank you in the motion passes. and mr clark, could you please call item two and three together? yes items two and three are the proposed budget and appropriation and proposed

salary ordinance respectively. for the fiscal years ending june 30th 2024 and june 30th 2025 item two is the ordinance appropriating all estimated receipts and all this estimated expenditures for departments of the city and county as of june. 1st 2023 and item number three is the ordinance and numerator positions in the annual budget and appropriation ordinance. continuing creating or establishing these positions enumerating and including there in all positions created by charter or state law, for which competitions are paid from city and county funds appropriated in the annual appropriation ordinance authorizing appointments or continuation of appointments there to specifying and fixing the compensations and work schedules thereof. and authoring appoint authorizing employments to temporary positions in fixing compensations. therefore, madam chair thank you, mr clarke. um colleagues. i would like to just , you know, brief make brief remarks before we start now officially start out budget

process. um as we face overwhelming budget deficits for the upcoming two fiscal years, this budget must ground our city spending and carry every san franciscan through our pandemic recovery, so no one is left behind. we must face the moment but also look to the future so to officially start this budget process at the board supervisors , i want to take this opportunity as your chair to articulate my approach to tackling our cities, overwhelming budget deficit and also meet the demands of our city. view our city departments and their budget in three categories for our public safety . city departments like police fire and the department of emergency management. i look for their budgets to include a baseline budget for daily operation, but also a budget that is adaptive and flexible enough to include contingencies to tackle crisis and disasters like gun violence, wildfires, storms and earthquake. and when i think of the city departments providing general services like

those under the preview of our city administrators or city departments, like the public works, the planning department and the department of building inspection, i expect stabilized , spending and budgeting to keep the city's daily operations efficient and consistent. so when i think of city departments like the department of children , youth and their families and the department of early childhood those are investments of our future. they should be increasing their budgets and continuing investments and resources for children and youth . after all, they are our future. um but to balance all three categories. we must look at our overall spending for government efficiency and reduce spending that does not contribute to core city services through the board budget process . i expect this committee to confront non personnel spending for all city departments, including supplies, equipment, vehicles, travel expenses.

brandy materials, public affairs and marketing contracts. we will also be looking at the number of and the number and spending ratio between managers to frontline workers. we will ask about deliverables of all programming and contracts and will consider eliminations or face out if there have not been demonstrated results according to contract terms or performance audit, especially for those that did not meet their goals for more than two fiscal years. we also need to look at scaling back spending that we took on during the pandemic and halt spending increases for city departments until we have a better forecast with our tax revenues. i want to point to the five year budget outlook update also known as the joint report, put together by the budget and legislative analyst's office mayor's budget office and the controller released in march this year. the update highlighted the analyzation of

police and public works supplementals that extension of downtown ambassador programs. maintaining shelter capacity and tax changes proposals. these are the policy that have significant fiscal impact. these are all issues we will have to consider as we work through this budget process. this budget also must meet the this moment of our city to face the crisis of our street conditions had on we must address the harm of fentanyl on our community and that we palette, ease of supply and demand that are deeply rooted in our drug problems. we should be honest about the need for effective public health solutions to lower the demand, just as we should be honest about long term public safety strategies to tackle the challenges of relentless supply , we must target the actual supply source that are so much more than what meets the eye of our streets. we also have to recognize that we cannot arrest away the mental health crisis

that we're witnessing on our streets. not only is in cars not only is incarceration inhumane, it is also not economical incarceration takes a toll on our communities, and it has both moral and economic cost to all of us. when we invest so much in our system to provide services and support yet we see so little resulting return. we must ask the tough questions about accountability. a system that lacks accountability and transparency. whether it is criminal justice or public health is what is really killing people. we need to refocus our government on what we're charged to deliver quality and timely court city services. that is what our residents, businesses and communities demand whether we're talking about downtown economic alright don't downtown economic recovery business growth or vibrant neighborhoods

and efficient and transparent city government is what will bring us the recovery that we deserve. this is why through the next few weeks, you will see that the focus of this budget process is about accountability and transparency and holding city departments in ourselves accountable for the deliverables of city services, and we will demand transparency about city operation and steps spending. so i'm happy to be here. wow i guess i guess happy it's an overstatement. we all must be here. but some of us especially , i think all five of us are you elected to do this work and we want to do this work? that's why we're here. um so let's get to work colleagues to any of you have any comments. i really appreciate you all of you being here with me. and with all of us, um with that, let's go to the first city department. and, uh, i believe yes. our

treasurer, tax collectors. and we also need to call item number four. along with this. yes, madam chair item number four. his new ordinance amending the business and tax regulations code to waive retroactively the july 1st 2023 certain first year permit license and business registration fees first specified, uh small businesses that newly form or that open a new location henry funding anyway. fears that have been paid to the city members of the public who wish to provide comment on this resolution. should call for 156550001 with meeting 82 5910926245 and press pound twice and dial star three land but speaking, he promptly indicate that you have raised your hand. please wait until the system indicates cabinet meeting. you may begin your comments and share thank you and treasure jose scenario. thank you so much for being here with

us today. good morning, chair. chan, good morning supervisors and jose cisneros treasurer and i'm joined by title shot chief assistant treasurer. um we can start the presentation. our offices mission is to collect and safeguard the city's money. and use our expertise. to assist low income sir francisco families to build economic security and mobility. i want to thank budget analysts shot song and budget analysts reuben for working with us, and particularly to acknowledge our own treasurer's office budget manager, kenny will for her steadfast commitment. to do our work. well we focus on fiscal stewardship. financial equity. customer service and innovation through operational excellence and rigorous compliance. as you can see, this has been another busy year for our office. our office collects nearly half of the city's entire budget each year. we swiftly process deposit

and invest all funds and we continue to see an increase in the usage of online payment methods. to achieve all this. we communicate with taxpayers consistently through multiple channels. are effective communication strategy translates to extremely low delinquency rates of only 1% of property taxes paid late and 5% of business taxes. as always, you and the voters have kept us busy. i'm pleased to report that we successfully implemented to new approved taxes in the last year, the overpaid executive tax and the commercial vacancy tax. we have also entered into a contract with the new bank partner for the city and counties, banking services, and i want to extend my gratitude to department staff all across the city departments for their partnership in this large transition. and this contract is the first to specifically include a social responsibility component, and i'm excited to share with you more about that

effort in the coming year. kindergarten to college. 2023 is a huge milestone year for the kindergarten to college program as our very first class to receive courtesy accounts just graduated from high school. he i'm excited to report that seniors who contributed to their savings accounts graduated with an average of over $1400, a huge increase from the initial $50 deposit they received from the city. and overall, arcata see families have $15 million saved in their accounts for their kids . futures very, very excited. and thank you for your support this program. the b. the jury program has made sure that no one gets priced out of jury service. the program provides a $100 per day stipend too low or moderate income jurors in san francisco. our initial findings show that 81% of participants

say they could not have served without the support. and 63% self identify as people of color. racial equity. we have offered robust department by trainings on racial equity for all staff, as well as targeted trainings for managers through our fantastic employee led racial equity workgroup. we've had monthly department wide employee engagements, events to build an increased culture of belonging and inclusion. and i'm very happy with our progress on hiring and retaining a diverse and quality workforce. through our efforts to change minimum qualifications and focus on creating promoted pathways. we have successfully reduced our vacancy rate by 4% and nearly doubled our hires over the past year. so as we look at our budget, i want to call out to

you that you will see a few increases. let me explain each of them. first we have funding from coit to create a database to help us implement the new empty homes tax. second the proposed funding for fiscal year 23 24 for the first year free program is showing us part of our budget. however this is a citywide initiative and the funding actually goes to a number of other departments when they waive fees for small businesses. third is a project funding to support low income residents through programs such as bi the jury. in 2024. we've increased our anticipated revenue. deleted positions, reduced non personnel costs and taken a significant reduction in project funding for our property tax replacement efforts. and in 2025, we propose to reduce fte s reduce more from our project budget and reduce our software licensing budget. so, looking at our department budget, it breaks down as follows. 66% of our budget supports revenue collection work. 15% for

treasury services. 8% for financial empowerment and financial justice and the remainder for technology. admin and hr. here you can see the burdens and the general found over the next two years remains stable despite rising costs for the salary cost of living adjustment. for the coming years . we're heads down and focused on implementing the empty homes tax, which goes into effect on january 1st. we will continue to work hard to ensure that graduating sf usd seniors get their care to see savings accounts disbursements we're looking forward to reducing the city's cost of processing credit card payments with an upcoming rfp. and we are close to launching a pilot called sf lens , which we hope will make it easier for our small l b e businesses to find quality banking products to help them grow. first year free. during

the pandemic. we were asked to help support small businesses in any way possible. with supervisor ronan's leadership we launched first year free for our smallest commercial storefront businesses on november 1st 2021. and last year the board voted unanimously to extend and expand the program. and i'm pleased to report that we have waived nearly $1.5 million in small business fees with the first year feet program. the draft ordinance you're considering today would extend the program while removing home based businesses and short term residence residential rentals from eligibility. and i'm joined by director katie tang here from the office of small business and i want to thank her and her office for their partnership and implementing the program in a way that best supports small businesses. with that were available for questions as you consider whether to approve the legislation and extend the first year free program yet again. thank you so much. we have to be

r a report? yeah. good morning chair chair. chan members of the committee dan gantry with the budget, legislative analyst's office. item four is a proposed ordinance that would amend the business regulations and tax code to codify the first year free waivers and extend them through june 2028. in july, 2021 the board of supervisors approved an ordinance waving first year permit license and business regulation fees for certain small businesses. the goal of the first year free program. was to provide relief to small businesses during the city's recovery from the covid 19 pandemic. in november, 2022 the fee waivers were expanded to all business types and extended through june 2023. the treasurer. tax collector administers the first year free program, which has enrolled 4122 businesses as of june 5th of this year. according to the treasury tax collector's office staff. in fiscal year 22 23 the

first year free free program waved about $1.2 million in fees through april, 2023. using a straight line projection. this would amount to about $1.4 million for the entire fiscal year. treasurer tax collector staff do not expect the changes in the proposed legislation to significantly change the cost of the fee waivers. funding for the projected cost of the fee waivers is included in the first year of the proposed to your budget for the treasurer, tax collector of approximately $2 million. we do consider approval of the proposed ordinance to be a policy matter for the board. thank you, supervisor ronan. yes thank you. um, i want to thank you. treasure. cisneros and director kitty tang for helping to make this program such as success. i think it it's more needed than ever given the amount of vacancy and vacant storefronts and all of our neighborhoods. um so i just want to make clarify, so we've

included 1.4 million to fund this program in fiscal year 23 24 but we have not included the funding for 24 25. is that correct? um and given the discussion, we had an item number one about the fact that we only expect things to get worse in a structural. on a structural level for the budget and future years, and we're looking at legislation to extend this program by eight years. i'm wonder why the decision was made not to fund this program in the second year. and i guess that's for director danny. good morning supervisors and adorning mayor's budget director. um i think the decision was there. a number of temporary things funded in the next year of the budget so we can continue evaluating our financial position. how the program is operating determine

if it's um still needed and important and an ongoing basis, so the proposal is to at least identify funds for the first year continue to evaluate next year and if we're still supporting this program reconsider again next year. so i just i just don't i don't think that's a good way to budget. i think if we're i think it would send a really contradictory message if we're going to pass legislation extending the program for eight years, but funding it only for one year. and given that every year it's going to be a challenge because we're interested. you know, in challenging better times. i don't feel comfortable. sending that contradictory message. so you know, i really want to see funding in the second year of the budget so that we don't have to face ah, you know of 1.4. million dollars additional structural deficit. in the following year, so i just want to put that out there and make

clear that either reprioritizing this program where we're not, and i very much believe that it's a very small investment for a very large gain and that we should be recognizing that in in in the budget for over two years. i concur with the sentiment. i think that we should try to lease of fun, 1st and 2nd year and if the concern really is a structural spending , then let's also scale back the actual legislation from two to end in 2028 to actually end in 2025, and that we can actually bring back to this body for evaluation. supervisor ronan yeah. i mean, my problem isn't with the eight year extending the legislation by eight years at all. i think we can extend we could say we were extending it by 100 years. but if we're not then funding it in the second year, then that's where the message is sent that this program is up for grabs every

single year. so i don't think it it matters how long we extend the program, uh, on paper through the legislation, i think it matters. the message. we're sending about the importance of this program and its stability. through the two year budget that we're approving. so that's where i stand. right um, understood. uh looks like, um we why don't we continue this item to next week? and so we can continue this discussion. would you like? i. sure um, yeah, sure. i'd be happy to make a motion to continue item. for the next week great and looks like a second by vice chairman delman. um before so before we roll call on the motion. let's go to public comments for item four. specifically thank you. yes members of the public who wish

to speak on the ordinance waving , uh, small business phase and wish to provide public comments that should line up now. and for those on the phone if you haven't already done so press star, three fewer centered speaker lion and for those ordinated, hugh, please continue to wait until the system indicate jab and then muted and that'll be your signal to be in your comments. seeing over in person speakers here in the chamber. mistake in life if you can and made her color, please. hi um, i feel like as long as the city has the money for this program that they should go ahead and do it right now. we're just in a huge budget deficits. so you know, every single program that you know is we want to implement is extremely important to the city. but on the other hand, if we don't have the budget for it, we should be cutting as many programs as possible. thank you. thank you much for your comments, and with that, do we have any more speakers? mexican loan? madam chair that completes our cue.

thank you and see no more pocket . public comments public common is now close. mr clark. i would like to roll call of the motion made by supervisor ronan and second by vice chairman delman to continue item for two next week. roll call, please on that motion, made by member and seconded by vice chair panel men to continue this ordinance, uh, to the june. 21st meeting of this have this committee vice chairman delman remember staff i suffer. remember on it. run, and i remember walton. well tonight church and we have five eyes. thank you and the motion passes for item four. and like to call the next city department. i'll have it memorizes our department of technology.

there you go. good morning chair chan and committee members. my name is linda general and i serve as the city ceo and the executive director for the department of technology. thank you for this opportunity to present the department of technologies budget and answer your questions. but first i would like to thank dt cfo to yuma, the tt finance team and dt leadership for their diligent work on the budget development and identifying savings this year. next. dt is looking forward to a new year of technology projects that contribute to the mayor's

initiatives for delivering a clean and safe city. restoring our downtown and economy and strengthening coordination and efficiency in government. as you can see from the list of dt priorities. we will be focused on i t modernization, resilient systems and cyber security. next. the dt department has eight divisions. the teams deliver the full range of it services, including broadband fiber installation, radio system management, network and communication services, data center cloud compute and storage enterprise business software systems, citywide cybersecurity protection and response. highly responsive 24 by seven helped us services technology project management. technology financial services. and sf gov t v hearing

commission and event public meeting coverage. next. d t services are delivered by 259 f. t e. historically dt has had a high number of pe x positions and this year as part of the mayor's 80 48 supplemental provisions e two p program, we were able to convert 40 p e x t e x positions, two pcs. we currently have 10 positions in active recruitment and 28 positions designated for attrition savings. next. moving on from staffing to the budget. the dt budget has four funding sources allocated operating expense. investment projects, capital investment projects and the public education and government funds for broadcast improvements. 23 24 budget increase over the previous year

is 13.8 million. and is primarily due to increases in fixed costs and pass through costs. dt was able to achieve the mayor's 5% budget reduction. specifically about the reductions. we can share the following summary. next. the savings were made in dts operational budget fund balance and attrition for a total of 11 million in the 23 24 budget. to understand how dt is achieving savings i would like to share next. an important look at how we are driving down legacy operating costs. this is very important as we modernize systems and achieve efficiency. in this chart. you will see that 75. gts operating budget.

approximately 100 million has decreased by 8% over the last four years. this was accomplished by negotiating vendor contracts, removing legacy software licenses and equipment. and moving a data center. eliminating redundant systems. and importantly, completing projects on time to avoid costs, increase and deliver benefits as planned. so by continuing and significantly reducing legacy operational costs next. the city can add capacity. as well as new, efficient and innovative technology investments. 25% of the dt budget includes investments for new capacity. new system maintenance and essential cyber security improvements. given the business

efficiencies technology can achieve to make us all more cost effective. it is no wonder that the city has almost doubled the number of endpoints and has added over 500 new cloud business systems in the last two years. notably. with the efficient dt system administration. this increase in capacity did not entail a proportional augmentation in dt resources. most important, though, the outcomes from the strategic investments including include transforming outdated and costly infrastructure. driving efficiency by optimizing resources and automating processes. and accelerating new civil service delivery and problem solving to address the challenges. a specific example of lowering operating costs in dts is dt strategic sourcing

with enterprise contracts next. the microsoft enterprise agreement was recently renegotiated and achieved greater volume discounts and a shared pool of licenses. this creates savings for the d t and city departments. this contract also adds new cybersecurity tools from mobile devices. next. another example of a creating creating efficiency and lowering operational costs is device management. a cost savings idea involved improving the management of unused cell phones , which chair chants urging a new mobile device management policy has been envisioned. and the status of this work is d t introduced the draft policy quite in april. the policy was will be discussed with all department finance and procurement teams next week. coy dhr and the city administrator

will review the policy and august and the savings from this policy is a reduction of 500,000. in the 24 25 budget. so i have shared with you. our goals are staffing the budget. our cost management and i would lastly like to share the status of our largest initiative free internet service to affordable housing next the fiber to housing program has connected over 11,000 housing units and six s. r o s to free internet service. 23 24 budget includes funding the maintenance of this municipal broadband infrastructure and upgrades to market street wifi. and i'll just say we are also actively working to apply for federal grants and funding. that will offset some of the costs that we

have had if we get those grants , and i will know that more later in the year in conclusion . please know that the department of technology and all city technology teams next are focused on increasing efficiency and delivering innovation while managing expenditure growth and we do this by sharing data and systems to eliminate silos and reduce costs. deliver high performance systems enabled data driven business decisions, optimized tech tools and services. embed cybersecurity and all technology systems to ensure we are prepared to respond and recover and importantly, innovating with technology to showcase san francisco as the tech capital. this concludes my five minute presentation. and since i'm here, i would just like to thank you again. on behalf of dt for the special service accommodation that you presented

to us last month. i'm happy to answer any questions. thank you , director. general. um uh. supervisor staff i e. thank you. i'll be brief, but i just want to thank linda darryl for her leadership. tremendous work. she's done. we've really enjoyed working together to expand internet access to for affordable housing, public housing and everyday san franciscan so really have enjoyed working with you. just two quick questions. um well, actually one i think you touched the first one, which was expanding san franciscans connect high speed internet. i think he went over that and your presentation. but the second one that quick question i have is, state laws changed. about requiring local governments to allow micro trenching. and can you just give an update on micro trenching to allow for connectivity so that folks can access high speed internet quicker? yes um, the city has

been working on how to accommodate micro trenching dpw , who manages the work in the roadway and is responsible for the permitting and also the specifications and standards for road repair and construction. um has been developing. um new standards that will address micro trenching. um and i'm looking forward to those. it might be a way to serve areas of the city that are very difficult to serve with microwave or with our fiber backbone. thank you. supervisor walton. thank you, chair chan. thank you, director general, just one question as i look at, um. a letter or memo you sent and june of 2021. and thank you for continuing to work to provide connectivity to residents and affordable housing

and public housing. but there was some other components of that that i thought were interesting and would love to hear about the progress on that. like increasing the digital literacy training and skills development. um advocating for state and federal funding to match city investments. and providing high quality computers and technical support to vulnerable populations, particularly what's the progress on network? um. for the digital literacy. of course, there's nothing more important and are digital equity team at m o. h c. d is leading that effort and working with community partners to deliver that. um, training, too. our neighborhoods. with regard to devices. we still have a challenge. the new grants. they're coming from the federal government and state are for the fiber investment and construction. there are grants

for education and we are going to be applying on those so that will help. but we are still challenged when it comes to devices. i will say that m o h cd has started a program around refurbished. um, computers. um. that has a certain value. i would like to see our ability increase around being able to provide new devices, and i think that's something that will need to look forward to. um as these grants come through and find opportunities within the grants. thank you. it's gonna be interesting when we hear from mostly because i know all of the cuts were only proposed to community and so i wonder if there if this program still exists, or if they're even still doing their work because they're only cutting community. out of their budget. just my last question. do you think we're

ever gonna achieve universal wifi here in the city. well wifi , no direct service with high speed broadband. i hope so, uh, we um, have completed 11,000. next year. we will complete um. about 10 new rings of fiber. and connectivity to um. affordable housing. we're expecting about 10,000 more units that's going to put us around 20,000. it was always our estimate that there were 30,000 in the city. so we're closing in on that. and if these grants come through from the federal government and the state, um we should be able to make a very large and significant completion. the grants from the state have to be completed in two years. it's a lot of pressure. but we are already planning forward on that

and expect that that is something that will really accelerate the deployment. thank you. thank you. thank you and supervisor ronan. thank you. i just wanted to take the opportunity to just say how cool i think you are. i think you are such an amazing thank you, director. i think the work you're doing is extraordinary. and i just wanted to thank you so much for it. thank you. thank you. uh next, we have our assessor recorder walking tours. welcome. thank you so much. just give us a moment to get set up.

well. good morning chair. chance. supervisors handelman ronan safavian walton, joaquin torres assessor recorder, the city's most stable and secure source of revenue through property taxes begins with our work and the faces of economic uncertainty. the rising challenges presented the ability to do our work becomes more important at the same time that we're seeing impacts of downtown's commercial real estate market. we're also seeing for fiscal year 23 24 modest role growth consistent with what we've seen in previous years. this can be attributed to the insulating effect. 13 the diversity of our real estate and the stabilization seen in home values the budget before you ensures that we have the resources we need to meet the challenges that lie ahead. r $37.4 million budget is fully dedicated to achieve our mission of fair and accurate value for all real and personal property. the people behind this work represents 78% of our budget, and they work hard to place that value on the role together with the treasurer, tax collector and controller. we generate 3.9 billion in annual property tax

revenue for the general fund, the school district city college and other taxing entities. the slide illustrates the impact we create through this lean budget. we want to maximize the investments that you place in us so that you was elected leaders can invest in the staff programs and services to address san francisco's most pressing needs . over the last five years. this work has resulted in the assessment roll growing by 27% to 329 billion, and once again, the controller is projecting growth of 4% over the next year. you can see on the next slide. the general fund supports 86% of our budget. the remainder is supported by our function as county recorder the year the deep this year, the decrease in documents recorded has resulted in the current year. deficit of 1.5 million. that decrease will continue and proposed budget closes a two year $1.4 million revenue gap by using a one time fund balance. on the expenditure side. you can see that almost 30 million of our budget is used to pay for our staff. nondiscretionary costs enable them to do their work and keep our doors open for constituents . that leaves little room for us

to further address reductions of 1.4 and 2.3 million as deep cuts to staff would negatively impact our ability to generate and defend value and realize the property tax revenue forecast in the budget. we take pride in the fair and accurate value. we provide the manner in which we do so to ensure parties pay their fair share, and we're also validated by the audit results provided by the state board of equalization that b o e. the controllers, nine month report projects property tax revenue in the current year $86.5 million above budget by value and construction work as an example that's in progress. an additional 1.5 billion in value is added to the role that means about 18.1 million in property tax and more than pays for nearly half of our entire budget. since 2015 or transfer tax audit program has generated an additional 75 million in general fund dollars, and this year we've already identified 15 million in penalties and interest revenue. we exceed the mandated bot audit requirements in our business, personal property division, and we're proud of the eight plus score we received from the boj's latest

review of our assessment practices, and yet we still face challenges. the increases we see an appeals are significant as residual effects from covid and remote work or impacting the market between fiscal year 18 and 20. the annual average rate of appeals was 1435 in the last three years that averages climbed 221% in average of 2500 over the last three years. and for just this year fiscal year 23 we received 2769 appeals, the highest number filed in one year since 2014 and the increasing number that you see here of open appeals means that we need to address those appeals, which adds strain to our capacity to complete valuations in a timely manner. so in the year ahead, we're gonna be restructuring to address those challenges. at the same time, we're in the final stretch of launching phase two of our new property assessment tax system. over the last five years, we've been working to modernize that decades old system and launched the first phase successfully in 2021. highly complex project cost of

52 million that draws time from our staff to implement and will require staff and financial resources to transition and maintain all while still addressing that increasing workload. we bring workshops in the community in person and virtually to educate the public on property assessment, tax savings, promote economic empowerment, financial literacy , all in different languages to ensure our services are accessible in august this summer will host our in person family wealth forum so residents can access one on one counseling on those topics and more that relate to seniors and homeowners . and just last week, i'm very proud that we completed the first round of our state planned program with 100 free or low cost estate plans, of which 76% sip. unz identifies low or very low income and we announced another 100 free or low cost plans. on the possible without the use of city funds that would be used by san franciscans in the coming year to protect their hard earned assets and build wealth from one generation to the next. and we know this work is impossible. without the staff who advanced it. we filled 50 positions this year, including

17 exempt to permanent conversions that represents 19 internal promotions in the next two weeks were to fill seven more positions for total of 57. and each one of them are needed. at the year end. we project six vacancies that represents about 3% and the majority of those will be filled in the next 90 days. so supervisors i just want to say thank you for your ongoing support as my office continues to promote efficiently and effectively, um, to respond arising workloads, the increase in appeals all while implementing a major modernization project serving the public in this building and in community and ensuring that billions of dollars in city revenue together with our partners can continue to be counted on through our collect. of work. i want to thank you. anna dunning, director of the mayor's budget office, or analysts, zang hong and the budget and legislative analyst's office. ruben oliver. thank you. thank you. i don't see any other names on the roster for questions for you, but i just wanted to flag. i think we have this discussion before i look forward to the continued

collaboration between our clerk and your office around the assess appeal board. um just really looking forward to resolve some of the descriptions , the in terms of staffing and funding for the staff. particularly for that. and so i look forward to that continued conversation. thank you so much. thank you. with that, and let's go to the next city department. in this case is the board of appeals.

so sorry for the delay. is there someone here who can help me find my presentation on this? my apologies that seemed easier last year, but thank you.

we can make sure. okay. thank you. thank you and i apologize for the delay. good morning church. chan and members of the board. my name is julie rosenberg and i'm, the executive director for the board of appeals. thank you for giving me this opportunity to share our proposed to your budget. at the outset. i would like to thank nicolas leo from the comptroller's office and zong hang from the mayor's budget office for their tremendous help and guidance to this budget process. so moving forward the mission of the board of appeals to provide the public with the final administrative review process for the issuance. denial. suspension revocation, modification of city permits, licenses and other determinations. our goal is to provide an efficient, fair and expeditious public hearing and decision making process before an impartial panel. i this slide shows the appeal distribution by department we 88% of our appeals

are of land use decisions, primarily from the department building inspection in the planning department. and moving forward to our budget summary. i we proposed reducing our revenue for filing fees. this is based on historical shortfalls from to $20,000, or reduction of $15,000 of and in terms of our surcharges. we anticipate a shortfall, given the lower volume of permits that are being issued. this slide shows our expenditure details and we despite we are since our department is primarily made up . the budget is made up of salaries and benefits the mayor's office do not ask us for specific target reductions.

however we did make some significant reductions to ensure that we are balancing our budget. i have. this is our organizational chart. we have five commissioners. one department had one legal assistant and 23 ftse legal process clerk with one vacancy, and this is an unfunded, uh, his position. we basically we have 5.11 fte s. but what is actually funded is 4.25. we have a savings due to attrition. um and i also just want to mention in terms of our revenue the m to has elected not to have their appeals heard. by the board of appeals, so that has resulted in the loss of approximately $10,000 for fiscal year 24, and that amount will be covered by the general fund for that year. moving forward. we proposed to

increase i think i did miss a slide moving forward quickly, but 97% of our budget comes from surcharges imposed on permit fees and 3% of our budget comes from filing fees for appeals and in terms of the surcharges. we propose raising the rate on force or charge amounts you can see from the slide. uh, the planning department department of building inspection department of public health and public works. so in these, we proposed to increase via cp. i adjustments. and lastly, this is the slide showing our filing fees, which haven't changed since 2010. we want to ensure access to all we also do have a provision for a filing fee waiver if someone qualifies based on economic reasons. so that concludes my presentation.

i'm happy to answer any questions. thank you, and i appreciate all your efforts of communications with director jeff templin back and forth sort of just about this appeal process specifically for tax taxi medallion holders and that to actually have a you know, as a place at the boar appeals to allow folks to go through that process to appeal outside of sfm t a jurisdiction. it's regrettable that they decided to take a bag, but it sounds like according to the city attorney's determination that they have the right to do that. so i appreciate all the effort over last year, um, two trying to communicate and figure this out whether that is actually the best for the taxi drivers, so i appreciate you, but i also appreciate if we can continue to have those aren't going communications, especially in the events at the taxi drivers. especially the taxi drivers alliance to come back to voice their concern again. if that process doesn't go well with sfm

ta. i hope that we can keep that option. open down the road. thank you so much. thank you for your acknowledgement. any questions, comments? nonsense let's go. oh, my apologies. vice chairman delman thank you for your chan. um i am a little kind. i don't know whether you will have had time to think about this at all. but there is a bill in the state legislature that would impact the board of appeals consideration of housing appeals, and i was curious if you have looked at that likely impact on your workload. any thinking about that? yeah. i'm not prepared to talk about that today, okay? thank you. we'll be back. thank you. okay great. thank you so much. thank you. next we will have health services system and director abby event is here with her team. good morning supervisors,

abby and executive director of san francisco health service system i am introducing to you, our cfo iftikhar hussain, who will be doing the presentation on our behalf today. good afternoon. happy to be here. um, i'm trying to figure out the logistics. we have somebody. um in our office, advancing the slides. alright, let's see. it worked, okay? um so i do a brief presentation. and then i'm an abbey. and i would be happy to answer questions. i'm the, um i'll go with the h s s, uh so our next slide, please. sorry your first name last name and your title. i'm sorry. if the

car hussain i am the cfo of hss. next slide. okay so, um, i wanna talk about our mission, which is not just, um um, um, affordable healthcare but also high quality healthcare, and we also have a program to focus on the well being of the employees because in the long term, the healthier the employees, uh the, um. higher you know, you see the benefit in the quality of the work and also the life and family members and also lower cost overall s people stay healthy. so uh, under our responsibility we have about 121,000 covered lives that includes active employees and retirees and their families. we uh, provide healthcare services . to the city and county, the school district city college as well as the courts. and the

budget you're seeing here is a direct general fund budget for the department, which is about 14 million. in addition, we manage, um um, a billion dollars in healthcare trust fund, which is used to purchase uh, health services for employees that are just described above. um the rates that we negotiate. we have very innovative models. we do our fbs frequently and as a result of that we are able to, um, save. you compare our costs to attend county average that we do every year. um so in our budget we have about 14 million spend 48 ft ease. all of our costs are allocated back to other departments. so when you see the sources and uses of funds, the source of funds really an allocation back with the departments. next slide. so this describes the services

performed and the and the divisions of the have, um because we manage such a large span be do need to plan several years ahead. so we have an administrative arm that looks at the, um the long term planning, um, and supports our health service board. we 121,000 members that we talked about, um , be respond to inquiries. and um, uh, manage the open enrollment process. we um, have a financial contract division. to manage the trust as well as to manage all the contracts for the for the healthcare restaurant. spend and we have analytics to go that manages the icty functions. and demographics of our population. on monitor results, and lastly, we have the well being employees assistance program. um that is available to

all to the employees. okay. next slide. so the functions have described about this is the organization charges f d. e s the currently we have so the gold sections here shows that the current vacancies are and the largest, um, area of the house vegans about nine vacancies and member services. this is the um, division or department that focuses response to people's questions, signs them up for benefits. robert does troubleshooting and we currently about nine vacancies, and our plan really is report as to fill those before the peak season, which is open enrollment that's coming up. ah, next slide. so this is our five year trend on fte s, uh, over time, we've been able to improve

productivity, um, and reduce f d. e s, um through. um um, um um , so through improved operations we the first reduction wasn't 21 into the city's cost reduction targets. in 22. we reduced to f . d. e s to find an employee assistance program. which which probably added benefits or members and then 2024. we've reduced to positions to meet the cost reduction target. next slide. uh um. so working with anna and fishers our made it means budget islands and these are the changes that i feel provided a good balance. uh with the city's deficits, as well as the ring a members, we had a new quality improvement position that was not approved. we will look at other short term options

to do some more limited quality improvement processes. um we, uh we had to well being position that we're making to be removed from the general fund. um the additional hr support that we were able to add to this budget about $200,000 is to, um is to shore up our recruitment process so that be fill all the vacancies splashy, especially heading into the peak season. and we, um did receive funding from police and fire to continue the ap program that we started last year. we are working on funding for the sheriff, which we hope to find, um, to continue those services for the sheriff is about going into next year. and the one time wondering, uh, the other man and the other small amount item in here is the

board of elections funding that we use received. so next slide, please. so this shows our total budget again the sources of funds the revenues are really allocations back to the department. and if you look at our expenses, most of it is labor. we have non personnel services consisting mostly of actuarial services that we used to set recent benefits we and also the e. a p program has contract id. and in the services of other departments is mostly, um, rand. i t. um. and this is that constitutes our expenses. so that's the end of my dick. and i'm happy to answer any questions about our budget. thank you. um i think that director yan and i had this brief conversation and this is not really about the department's budget. but it's really about like our healthcare

rate increase overall. um which is quite significant. do you want to just quickly briefly talk about that? we are preparing to submit before this board the rights and benefits for the next fiscal year. that package is under review right now, but there are significant increases for several of our plans, and, uh yeah, the details circum or forthcoming. and then do you want to just describe quickly? what the significant increase, like just roughly a percentage. while there's a range, depending on the product from 1.7, i think is the lowest to a 14.4% i just want to flag for colleagues that that is a significant increase ranging from one little bit over 1% up to over 14% for our healthcare just something for us to be mindful about as we continue to work through this budget. thank

you. supervisor sapphire. yeah where's the majority of who paid for the majority of that increase is that is that shifted to the, um. city staff, the construct of the health benefit for city employees is primarily , uh, paid for by the employer. so it would be the city. that picks up most of this. it, uh there are, uh. there's a lot of variation within that. i think the employees who are retirees that are early retirees that are not yet medicare eligible, um see, feel the, um increase more directly. and what percent? it's not a part of their, um they're no longer on the payroll, so it's not a benefit. so the i mean, we have the retirement system folks here, too. so the question is for retirees. how much of that 14% of the pain.

it's quite complex. the answer to that, and i really appreciate getting the packet before you so that i can show you the details. um because it depends on whether you're buying insurance for yourself for yourself and a partner for yourself and other beneficiaries. there's a there's a range and, um, it's the construct is both in the in the city charter and in the m o. u. s. it would be good to have that information before we make a final decision. ultimately we have to approve that correct. absolutely the packet as i mentioned is coming before you, um a week from monday it will be introduced. okay great. we can have further conversations and thank you. yes. thank you. and the next city department is the city administrator. um city magistrate er carmen shoes here. we appreciate you. and with that we're let's um mr clerk. let's

also call item 56 and seven together. thank you, madam. chair items 56 and seven. item five is an ordinance amending the ministry of and environment codes to reduce administrative costs by requiring the risk manager to review and update insurance requirements. homely is necessary to protect the interests of the city instead of annually and eliminating the requirement of the office of contracts. administration regularly report regular report on the implementation of city laws relating to select employment practices and the use of tropical hardwood by city contractors. height um, six is an ordinance amending the administrative code to eliminate the city's annual joint fundraising drive and item number seven. his an ordinance amending the administrative code that conform to current norman clincher, the definition of the city's technology marketplace for procurement. of technology, commodities and services handed just associated fees paid by city departments how members of the public wish to provide public comments on items 56 and

seven should call for 156550001 the meeting i d. his 25910926245 press pound twice. and if you haven't already done so, dial star three line to line up to speak prompt will indicate that you have raised your hand. and when the system indicates you have been in muted, you may begin your comments, madam chair. thank you, mr clerk in city. administrator to thank you for being here. apologies but i need help finding my files. thank you very much chair chan while the clerk assists our team , let me get started. first off again. chair chan, vice chairmen delman supervisors saffet, walton and ronan. thank you very much for giving us the time to be here before you today. i want to take a moment to thank the 26 divisions and departments within the city administrators office, um, in a budget presentation like this. we do not do justice to the amount of good work that is happening in all of these divisions. from our janitors or mechanics or analysts are

managers and more, so i just want to simply say thank you to all of them for their good work. um and i will try to be as succinct as possible. i'm going to run through the first few slides the first four slides, but we're going to skip them there in your records so you can see them and i'll just share with you some verbal work that's been happening over the last two years since i've served in this capacity. um while it may feel like it's been over, there's been quite a lot of work that's happened over the last two years. we have been climbing ourselves out of a global pandemic. and while that may feel like long in the past rear view window, there are many things that we've had to operationalize as a result of that rules at city facilities, return of our workers to in person operations. trying to figure out the protocols around public meetings and opening up our rooms for boards and commissions, as well as implementing contractor vaccine requirements. these are things that don't stop after the end of a pandemic. we've continued to work through many of those through our office. we've focused very much on taking a look at how it is that we come

back from this pandemic, particularly around how it is that we resume our normal functions in government operations. i want to thank the comptroller's office and the department of human resources for all of their work, as our three central organizations have really come together over the last two years to identify the major pain points in our cities operations. those are include things that you've heard about challenges around contracting challenges around hiring as well as our financial systems. we've really been looking to make sure that we try to work through the bottlenecks that have been put on hold during the pandemic as we address the pandemic, but also really recognizing the changing environment that we all have had to navigate whether it's inflation supply chain issues. workforce transition and significant vacancies that hamper the way that we operate. these investments, however, have been really worth investing in because we know that if we're able to move the dial in any way on these areas, they will help all of our city departments run better better and so just to give you a few highlights of

things that we've been able to accomplish in the contracting world, i know that my colleagues in the comptroller's office and dhr will speak to their components as well. we've worked concertedly to back fill vacancies in our office of contract administration. this is significant. we depend on them to be able to create over 500 term contracts at the entire city is able to utilize in order to save and create efficiencies across the way we reorganized our contract administration team to include a standards function to improve training and compliance across our operations. rolled out online workflows for departments to see approvals very clearly and transparently. we've reviewed insurance requirements to align risks with what we are insuring and what we're doing, and we have also lifted a citywide program to assist departments that have very little contracting support, just to make sure that those departments also have the ability to move forward with our operations. these things are really important. but in addition to that it's also important for us to be taking a look at how it is that we're helping to make work

easier for our vendors. we've done a lot to help create a forward calendar a master calendar of all upcoming contracting opportunities. this is something that significant. it may seem like it's insignificant, but a vendor knows what's coming. they can prepare and position themselves to compete. we've created a consolidated procurement opportunity website, a single source area for where suppliers who want to do business with the city are able to find resources on how to do so and also have been working diligently to implement some of the changes that have been been been amended in our 14 b a legislation. i want to thank supervisor walton for his leadership on that. i also want to thank the board in general, as and specifically supervisor mendel, hman, peskin , saffet, dorsey and chan for all of your great work and focus on contracting. that's been a very big part of our work over the last two years, and i want to thank you for your consistent questions, inquiries and pushing us to do better in these areas. but in addition to government operations recovery, our office has been busy implementing many

other things, and i'm just going to run through them very quickly . things like implementing proposition b of 2020 2022, and this included the creation of two commissions overseeing public works and sanitation as well as seating a whole new human resources function within public works. that you can't imagine the amount of work that it takes to be able to implement those things and we're still continuing to finish up that work in this current year. other things that you may not have heard about but are important just to note because they are pretty significant. um, our justice technology transition completed a move from an old legacy mainframe system to a modern platform. without any fanfare. things didn't break down. things didn't show up in the newspaper saving the city $3 million annually. this is 45 years of data 2.8 million cases and 7 million records that were transitioned last june. so these are all things that are happening behind the scenes. we renegotiated the city's tourism improvement district. i wish the

board approved. thank you. in order to secure funding for tourism promotion and create future rent incentives for the next 15 years, you might have heard as well. the office of the medical examiner regained name accreditation after losing that years ago. in addition to that, we have continued to manage our major transitions within our office 14 of our 27 divisions or department heads transitioned over the last two years, and we've had to recruit and retain and bring people on board. so if you think about that amount of transition, more than half of our division heads department heads saw a transition. in addition, three out of our five primary internal functions also saw transition or hr. director accounting our deputy overseeing administration so many of these accomplishments and work couldn't have been done without the great work of our team, even despite major major transitions within the city administrator's office. our focus over the last

year and going into the future will continue to be this. we will continue, especially during a time when we are resourced constrained to be investing in efforts that we believe will have high impact across the city . so these are things that continuing to work on our contracting reform work to make sure that we're looking at how we do our body of work, how we're coordinating amongst departments to ensure that contracting for our city departments but also for vendors who want to do business with us is easier. we want to put emphasis on planning and strategic development rather than being reactionary, two things that matter to many departments like our real estate portfolio. in what instances should we buy? be buying be leasing, especially during this particular economic downturn and the potential opportunities that may arise in the real estate. market. in addition to that were incredibly invested in making sure that we continue to pay attention to things that are absolutely not sexy, but are really critical to how we do our

work. and these include things like our it infrastructure and resilience. almost every single operation within the city depends on technology to run our core business to communicate. and in particular during times of emergencies, and so we are building a baseline of information through quite through our dt department as well as our ceo to make sure we understand where our core challenges are and where we need to be making investments to beef up the resilience of our technology infrastructure. we're going to be looking at reviewing capital delivery impediments working directly with departments. the direct uh, practitioners and people who have to deliver capital projects to make sure we try to identify opportunities for us to make better decisions citywide. we're going to be looking at the development at treasure island and helping that project to continue moving forward, especially during this time of economic uncertainty, of course , will continue to play a direct role in making sure that we're focused on economic recovery for the city, in particular with the mosconi convention center. and

of course, within our own department. we have already realigned the direct reporting of many of our internal functions to create more cross collaboration where it makes sense. so for example, we have clustered the department of technology quite digital services data sf to all report under one deputy to make sure that their strategies are aligned. we have communicated and had our capital and infrastructure teams. this includes oh rcp real estate are permit center report also to one deputy so that we are coordinating all of our capital, infrastructure planning and investments. in addition to that all of our contracting and procurement divisions, including the contract administration contract monitoring division, as well as risk management also are consolidated, working under one deputy as well. these things operationally, we believe will help to create better alignment within all of these divisions that help provide support across the city. finally i will say that our focus will also be around building a stronger

organization internally. there is no way that our departments or divisions can function and do well, if we ourselves don't provide great service to our teams, and this means that we're going to be investing in our hr team so that we can actually hire and backfill and make sure that we have the people we need to run the work that we need to this means investing in technology to enable our teams to have the tools that they need to do their job, but it also involves focusing on people development and this means that we have to invest in the people in our organization. we've implemented annual training hours for employees. we believe that this is a good thing when we ask our employees to do trainings that helps to build their skills. in their day to day jobs. we've launched a better work at adm effort is an employee engagement program to support our staff and return ensure retention and, of course , the work of our racial equity director in terms of being able to lift mentorship programs to our mayor's office of disability , who's working on citywide,

anti able ist training and as well as our transgender initiatives team who's been doing a lot of work with transgender inclusion training. all will help to move the dial to create an inclusive workplace that is going to be the place of choice to work. and so with those opening comments, i want to turn the presentation over to my deputy director of the administration. katie patricia tony, who's going to provide more specifics about our budget. thank you, carmen. good morning supervisors. i am katie patricia cioni, a deputy city administrator and chief financial officer for the city administrator's office. as you know, the city administrators office has a wide and varied portfolio that includes both public facing services such as 311, the office of the chief medical examiner and animal care and control. as well as critical city support services such as the office of contract administration, real estate and fleet. we are also a grant making organization through grants for the arts and the

community challenge grant program and we are shepherding the redevelopment of treasure island. this diversity of size policy and service area makes administration of this organization and its budget, both challenging and very interesting. to support management of our multiple programs the city administrators office collects and biannually reports on dozens of metrics designed to monitor assess and ensure achievement of our strategic goals. these goals include economic and community development, citywide planning, safety and resilience, equity and inclusion and equitable service. the cia s goals and metrics have been static for some time, though, and in the new fiscal year staff intends to review and update measures to ensure that there is still relevant as well as to add measures for new divisions. the city administrators, large and

complex organization results in a large and complex budget. approximately $611 million in the current fiscal year. our budget is funded by three primary sources. general fund support and general fund revenues such as dog licenses and marriage licenses. special revenue such as the hotel tax allocation that funds grants for the arts and work orders, which is revenue that we generate from other city departments to pay for space that they leave. services from fleet among many others. such services provided by city administrator divisions. as you can see, the ceos general fund budget is the smallest slice of this pie at 20. which will force us to be creative and thoughtful when assessing general fund cuts. turning to expenditures nearly 30% of the budget support staff. 30% funds expenditures such as insurance

and rent for city departments. 28% of our budget, supports debt service and work orders. and then 5% of the budget funds. our grant making activities with the remained remainder covering materials and supplies, capital and overhead. the department has 979 budgeted staff. this is a high level budget overview by funding type and oc, a division just order of magnitude, our two largest divisions by budget are real estate and convention facilities, and the smallest is the committee on information technology. many of the divisions that are supporting the city or work order funded, whereas most of the general funded divisions are public facing. in the face of a $780 million general fund shortfall. the city administrator met our

general fund reduction target for the next two fiscal years, reducing our general fund support by nearly $5 million in fiscal year 23, 24 and $6.4 million the year after. we achieved this reduction across our general fund budget, including a pretty painful cut of $1.6 million next year and $1.9 million a year after two salary and fringe benefits, primarily through taking additional attrition in divisions, including 311 animal care and the central office. through a combination of contractual services reductions and assumption of increased revenue. we were able to reduce the general fund subsidy to convention facilities by $2 million in each of the next years. and we built a new funding model for the office of contract administration. which charges departments based on their level of contracting activity, better reflecting the

level of service provided by department. or sorry, provided to departments and which had the effect of reducing the general fund support for contracting and procurement by approximately $7600 in each of the next two fiscal years. we also reviewed the office of labor standards enforcements revenue budget after analyzing actual revenue collections and increased the budget. this budget also includes some painful cuts to general fund grants. primarily in the office of labor standards enforcement and in the office of civic engagement and immigrant affairs. the reduction to the grant budget. includes $445,000 to see n next year and $880,000 that you're after. and $435,000

. to 0 lsc in each of the next two fiscal years. the reduction to the ocr grants include ending $100,000 that supported non citizen voting. which is a measure that is currently being litigated. and $200,000 that supported community gardens, as well as smaller reductions across the board to the cia grant portfolio. the reduction to lsc included one vacant contract compliance officer position and $215,000 and outreach funding. this decision to reduce grants was a difficult one. as i noted most of the oc, a divisions that received general fund support served the public and many of those divisions are quite small, creating some very difficult trade off decisions for us. despite these reductions, the office of labor standards enforcement and oceania will both continue to offer a robust

range of services in the coming fiscal year. next fiscal year. it's going to bring a variety of budget and operational challenges for the ceo. continuing to hire regularly and quickly remains a key need and challenge for us. we continue to work to stabilize and rebuild the administrative foundation of the city administrators office focusing this coming year on modernizing our technology organization and building a centralized contracts and procurement function. and there is this true with so many other departments, we are going to strive to do more with less knowing that it may be difficult to meet emerging needs and worrying about the impacts of inflation on materials and supplies and contractual services, as well as the impact of reduced funding on equipment replacement. we also acknowledge the fact that the grant reductions will impact some direct service delivery and that

the slowdown in funding for capital investment will increase deferred maintenance citywide. as noted hiring as a key priority for the city administrators office. we're proud of the work that we did to help public works implement its own human resources division. but as of december we're pleased to be able to focus on recruitment exams to fill the ceo s diverse operational needs . we have been able to staunch the loss of staff in the last two years and expect to increase our nets filled permanent positions in the coming two fiscal years. we have multiple recruitments in the queue to fill permanent positions. including the transition of staff from temporary to permanent roles. supervisors this is a very high level. look at the city's organizational structure by fun type. showing you where our positions are budgeted. if you would like details on any particular

division, please let me know and we will be happy to provide it. we look forward to continuing our work in the new fiscal year building on the success of initiatives as varied as contract reform and support for the city's transgender community. as the city administrator discussed, we remain focused on ensuring efficient government service with particular attention to the work of the government operations and recovery initiative. we will continue to work with city departments to standard contracting processes and reduce barriers to contracting with the city. and this coming year we will work with the department of human resources in the civil service commission to begin to replace the personal services contract service system. our real estate division will implement a strategic plan to begin to consolidate the cities, least footprint, reduced lease costs and move staff out of high seismic risk buildings, and the

permit center will launch improvements to the permit process to make it easier for builders, homeowners and small businesses to get required city approvals. in an effort to increase safety and resilience. we will continue to implement the expansion of cia's community ambassador program in the mission and southeast while creating new programs in the sunset fillmore, hes hate and excelsior neighborhoods. supporting the community and providing job training to members of vulnerable communities. we will also continue the ceos work on economic recovery, partnering with wd on implementation of arts, culture and entertainment sounds and we will partner with us have traveled to attract and retain conventions in the city. this organization continues to support equity internally and externally, including work to diversify hiring pools for classifications building

affordable housing on treasure island and developing amendments to the language language access ordinance. next year. the office of transgender initiatives will strive to decrease rates of homelessness and poverty in the transgender community and the office of cannabis will display disperse over $1.5 million in state grant funding to equity applicants. and in support of the optimization of capital planning and infrastructure. the office of the city administrator will launch a process to improve capital project delivery with the goal to deliver projects citywide, effectively on time and on budget. i hope that this gives you a sense of the depth and breadth of this organization . we have tremendous staff were committed to their diverse operations supporting the public and delivering services critical to the city. we're so proud of the work that our staff do, and we appreciate this opportunity

to talk to you about our budget and our policy priorities for the new fiscal year and with that the city administrator and i are available to answer questions. thank you, um. you know, we also call the items 567 together already, um and supervisor ronan. yeah. i would like to talk a little bit more about the cuts to all sc. um so you eliminated one vacant position is that in uh, of the different sort of work areas about let's see is that ah, you know, prevailing wages that wage deft. what where did that vacant position come from? so the position that's being eliminated as a vacant compliance officer that was meant to just support efforts and ols see generally.

there have been a variety of initiatives that have been added to their workload in the last year or so. and so it was envisioned to be support to help implement that work. so how many lsc had? i think about six different laws and initiatives that they did implement over the last year. this was a relatively new addition. the additional 2992 position in addition to the grant amount, and so it was a continued vacant position, and so we have eliminated it. i do think that lsc is an organization who has tried to do a lot with very little. and so it we would definitely welcome any opportunity to talk more about some of the work that they're doing there. so how many laws are they enforcing? i couldn't tell you exactly how many but we can get back to you, but we know in the last year we added six and how many? what what is the staffing? i would like to do an in depth. look at

all i see. maybe we could do that for the next hearing. um both, you know how many staff are enforcing each law? and this outreach contract. i think they've had with community groups for 20 years or something. i mean, when i was. lawyer at la raza central legal, i oversaw that contract for let us is under legal. that was a millionaire years ago. so is this is that zeroing out that contract? there's a specific contract that was funded with a nonprofit, the chinese progressive association and that is the contract. that is that's the one i'm talking about. is that, um, being zeroed out? we can check. yeah, we can check for you. i mean, if it's the contract, i'm thinking about that. the contract and the work. that has led to several multi million dollar settlements and

wages paid back to the lowest wage workers of the city. um oh, lissie. it is. mostly a passive organization, so they received complaints from workers and then do that. if there wasn't this outward facing you know, um. ah you know, effort to educate and reach workers. these are mostly immigrant, low wage workers who undergo extreme exploitation in the workplace. they are often monolingual speakers. they do not, uh, even know the systems of government that could work or the laws that protect their minimum wage and overtime and break laws. um if it wasn't for that contract, uh, the work of bolasie would be so much less effective. so i am thank you concerned about the elimination

of that contract. thank you, supervisor ronan for the comments, and i also want to thank supervisor chan. i know this is an issue that she has raised in the past and cares very much about will work with you to make sure that we're providing information to you about the different programs that are administered by ols see, in addition to what their staffing positions look like, i believe they continue to have some existing vacancies in the organization as well. and then we will also look into the other potential outreach contracts that we have, so we'll make sure to follow up with you directly. so when will that come with that? come in the next? yes hearing. you'll come and do a deep dive on all of this will provide information to you in advance and then are prepared will be prepared to come back. okay, great. thanks. appreciate that. thank you, supervisor sephardi. thank you. i was going to highlight the same thing. we were aware that this contract was affected, and i just want to say just from the work that we've done over the last few years, and the work that i did with organized labor wage theft is real. and without this level of intervention and work. um you're putting a lot of

families, a lot of working families, a lot of immigrant working families at risk. um so . just want to understand more. was this something that your office proposed, or was this something that came from the mayor's office that you all agreed to? as you know, supervisor. this is a process that we work through with the mayor's office. we i think one of the challenges that we have in the city administrators office if you take a look at our budget and the breakdown, our budget may look large. but we actually have many costs that are embedded within our budget that we don't have the ability to change. these are things like debt service on buildings as well as other expenses, insurance costs and so on. so our amount of general fund funding is relatively low. we took a lot of cuts with regards to our salaries and fringe budgets, and so as we had to go through the process, we took a look at every single division. again we will come back to the budget and finance committee to make sure we're sharing with you. the information about where our current vacancies are within ols. see, i also do want to make

sure to acknowledge or unless he's team. they are a team that is resourced. they have resource in a way where they still continue to have vacancies. but despite that they had been able to really pull out their mission and continue to do good work. this past year. we had one of the highest numbers of complaints come in, but also some of the highest numbers of resolutions, so i just wanted to make sure to recognize the good team that is there. this is a team that believes highly in their mission and cause and care very much about about making sure that we have justice and that we provide, um, wage uh, compensation where it's necessary, so i want to thank them for that work. they do tremendous work, but they also can't do it alone, and they need partners in the community, so it's really important so just through the chair to the mayor's office. the second thing we noticed again was another immigrant related program that organizes around food security in our district. um, that grant was completely zeroed out to one of the same organizations that does outreach work to workers. so, um. just want to hear a

little reasoning behind the mayor's office is pushed to eliminate this word, given the environment that we're in right now. my supervisor. thank you for the question and, um, like 30 administrator said we worked closely with with the department to identify areas across their entire budget where we could cut without impacting the direct work that their divisions are performing every day and try to identify areas where there would be as little impact as possible. okay. thank you. i guess we can follow up. go ahead church in but thank you, vice chairmen, delman. thank you, chair chan and, um i guess i'm also interested in, uh in a deeper dive into lsc because i also think that as we go forward with some of the streamlining initiatives that were into spitting, um you know and potentially, um we hope more housing construction in the

city. they're going to be additional challenges around enforcement of some of our labor protections, and, um, whether those are implicated by these cuts or not. um at some point in this time of, you know, budget stress. over the next few years, we may be needing to expand our staffing and resources in lse and i think having that conversation now is probably a good idea, but i also want to just express my tremendous appreciation for the team in the city administrators office. um you have found a way to do all the work that was already there before you came in, and then also start thinking about how to make san francisco city government more efficient. and, um whether it is contracting or permitting or capital projects. um uh, you know, these are some of the areas that are so frustrating. i think to certainly my constituents. i think my colleagues constituents and i know they're top of mind for you all as well. and i happy

to be able to be a part of some of some of your work in that regard, and so hope you're able to keep it up and we can continue to make san francisco government gradually a more efficient beast. so thank you. thank you, vice chair. mental men. supervisor ronan wanted to echo supervisor. mandolins comment. thank you so much for all the work you've done on the contracting reform. it's been so overdue and it's so appreciative and i just it'll be a money saver and thank you. thank you very much. thank you. um, i do want to add one more thing about just the reduction overall, just have a better understanding seeing, um, is it is it correct that they're also reduction for grants for the arts and out, of which no. okay no grants for the arch is not funded through the general fund. it's funded through the hotel tax and so hotel tax for seats are strong enough. that they are not seeing

a reduction. okay i was just getting information that cultural centers were being reduced with their funding, but we can confirm maybe a separate occasions again cultural centers. funded by the grant of the arts. cultural centers are within the arts commission budget. understood great. thank you. um with that said, i am looking forward to learning more, uh, in the coming week about just the efficiency of the fleet management overall. um it's a conversation that i would like to have a better understanding a little bit more information about fleet management under your preview. um like to understand a better about um, both the coordination of really from osaka with the ambassador program overall, that is under now. sam dodge team, um , preview, but, um, and how that actually in coordination with again under your jurisdiction. we convention facilities management and how that actually can help us streamline some of

the ambassador deployment. uh that couple with convention facilities management last but not least look forward to seeing a bit more information. um just with this, uh, but your public budget proposal and how would that impact the staffing level on both the contract administration and contract monitoring division? and will there be better like efficiency in the long run? um because i know we touch on just contracting and what you're going to do, including a central office for capital project delivery citywide, so just kind of help us understand your staffing level. ratio of manager versus line workers within those two division contract administration and contract monitoring. thank you. and with that, i don't see any names on the roster. um, i do think we need to go to i want to if i may speak on the item 56 and. seven

or are you? will you be speaking on those? yes ma'am. please do could we don't keep it. so i want to quickly say i see that human service. human resources is getting ready. um i want to say that we are want to wrap up this one and human resources and then we will go to a lunch recess for about 45 minutes and they're on out. um and let's so if we could keep that those three items tight in your presentation, i would appreciate it. thank you so much. thank you. alright as tight as possible. i am katie petruchio knee deputy city administrator with three pieces of trailing legislation in front of you all three intended to streamline city operations with relatively small changes to the administrative code. the first ordinance includes four separate pieces designed to reduce reporting burdens. first is changing chapter 12 t a

reporting requirement from to the board of supervisors annually to at the request of the board of supervisors. 12 t prohibits employers from asking about arrest or conviction records until after making a conditional offer. see a currently is reporting to the board annually on the agencies that receive waivers to 12 t. this report rarely changes because the vast majority of organizations receiving waivers are government entities who have already complied with state law , which also prohibits asking about arrest or conviction. the second section of this ordinance would ask to change the reporting requirements for 12 you from quarterly to the board of supervisors to at the request of the board 12 you prohibits the city's suppliers of textiles

and garments from manufacturing such things. in sweatshop conditions, the report identifies. suppliers who are not compliant or not fully compliant with the sweat free policy. it's very difficult for any vendor to be fully compliant . so generally, this report includes all of the vendors from whom we procure textile apparel and garments. and again, the data in this report generally is unchanging. the third change we would like to see is to remove the requirement that the purchaser submit a semi annual written report to the board about the status of implementation of the tropical hardwood ban. the code requires the purchaser to add language to the city's terms and conditions regarding the ban this implementation step has long been complete, making further reporting unnecessary. the fourth change that the first ordinance would make is to

update language regarding the risk managers responsibility to establish uniform insurance requirements for city contracts and grants. we would like to remove the requirement to review these annually and the fact that we are required to establish them in a manual. neither of which actually reflects how the risk manager currently operates. also we would like to change the requirement that the risk manager report to the board of supervisors annually on bonding requirements for city employees to as needed based on material changes in amounts of bonding or insurance required for this purpose. this second ordinance that's in front of you would eliminate the requirement that the city holds the annual fundraising drive known as combined charities, combined charities was codified in 1988

and provides a streamlined method for city staff to contribute to charity ease through biweekly payroll deductions. while the city administrator whole heartedly supports the original intent of this program, we recognized that it was established at a time when giving to charities required mailing a check through the united states postal service with the advent of the internet and the proliferation of websites that allow people to make scheduled transactions online. city employees can freely make charitable donations without the need for administrative framework that was established more than 30 years ago. removing the requirement for the campaign will save the city time and money without eliminating the ability of our staff to give generously to the charities of their choice. and finally you have an ordinance before you today that makes changes to the technology marketplace. the

legislation proposes to remove a requirement that city departments pay a fee to the tech marketplace and extent and instead give the purchaser discretion to charge a fee. currently the purchaser does charge a fee on each transaction to fund administration of the market place. but as i've already noted, we are implementing a new cost recovery model to support the office of contract administration, which will eliminate the need for this fee, and this legislation will also update the definition of the technology marketplace. happy to answer questions. supervisor walton. thank you, chair chanin. thank you so much for presenting these ordinances . just question about item five, the first part of the change. why are we trusting the state's records? regarding that would be regarding the first part of the change, you say. you you want to

not have to report and want us to request we will continue to compile the data supervisor so it will be available. we're just asking to avoid having to go through the work to put the data into a report that goes to you all annually correct and understand that but your purpose and reasoning behind that was because the state already collects that we already have state law that requires us. the status. send it over. why are we trusting the state's records? i just want to make sure that we can. we're not just trusting the state's records. we continue to collect the data ourselves, so we do know what is happening. supervisor if i may just clarify , this isn't about whether or not we're just trusting the state record will continue to do all of the work that we normally would do. this is just simply changing the reporting requirements. so currently we submitted to the board every year, but it takes an awful lot of administrative time to put it together. we're still going to make that report available upon request of the board so at any

time if the board should choose to want a hearing on it, or to hear from it, we can generate that report. we're not doing anything different in terms of what we're collecting for that information. i thank you with the concern with like supervisor walton, and i think i articulated this already. is that, um, while i understand that administratively is cumbersome and precisely why you say it's reducing the reporting burdens? um but i think it's someone like us that some of us i think have been in city government for a long time. so we know what we're looking for. and that some of us even worked on some of the legislation that end up requiring these, um, you know, report to be produced, but i am just thinking about, you know, just the next generation of supervisors and aids. and just how if you do not know that these information exists, you're not going to request them because you don't know what

you're what you should be asking for. it is actually i do hope. if i have to support from you colleagues today that i would like to duplicate its file, uh, for of item five and so that we can continue an ongoing conversation and considering the rest if we do not have questions with the rest that we move forward with them. they're really administrative. but i have very similar concerns. and but i understand, um it's a back and forth conversation. uh i would like to have i would like to my colleagues to continue to engage in this along with our clerk office to kind of help us problem solve a little bit, so that's what i like to do. but i just laying out on the table for colleagues to consider vice chairman andelman. chair chan. thank you for the comments. i think one of the things that we understand is i think you make a valid point that in future years

if there's no proactive generation of report, the board may not know that those those efforts are happening. one of the things that we are dealing with is of course, a resource constraints space. and so while we're trying to put our staff's time towards things that we think will actually move the dial in terms of improving contracting and administration. these administrative tasks. while they may seem really small piece by piece, they add up to be a significant amount of time that we spend so one thing. perhaps we can work with you on in the upcoming week is perhaps a way to notify the board on an ongoing basis of all the data that we do collect, so that if there is an opportunity for the board to want to say, i'm curious about what's happening with criminal history, then you're a were able to pull that information for you. so rather than kind of generating the report, what we can do is say these are the things that we're constantly collecting that we are doing so that if you have it at any point, a desire to see a report from it. we can generate that for you. and i think that that's a good that's a good practice because you are right. if you are not someone who was

part of creating it, you won't know that we've been doing it. thank you, vice chairman delman. uh, thank you. thank you church and, um and i am inclined to support this, but also happy to see more conversation about it. i do think um, i mean, i'm curious when the last time remember the board of supervisors took took one of these reports and did something you know, spotted something and did something with it. might might have been. um, i do think time is finite. we don't have as many people as we would like to have to do an infinite number of things, and there are other things for me that are more important than than some of these reporting than some of the gathering of reports and analyzing of data that doesn't actually, um, lead to any particular outcome, so, um, and that is duplicative of other of other requirements, so i'm. glad that you're looking for things like this. that potentially could be, um taken away and i would like to support you and

trying to do that. supervisor walton. thank you check chan, just are we receiving the data automatically from the state already? no, you're receiving it from us. we're not. but we're not getting it from from the state. i don't know we can find out for you. thank you. supervisor ronan i'm just wondering instead, i really like the suggestion of, um are. city administrator and i'm wondering if instead of duplicating the file, we can just continue item five and maybe amend it. as stated, and then we could approve it then. that's good. um great. and so with that, let's go to public comments for item 56 and seven thank you, madam chair members of the public who wish to speak on the three ordinances just in items five through seven are joining us in person is to line up now for

those who have joined us remotely and haven't already done so doused are three if you wish to enter the speaker line, and for those who do you think you please continue to wait until the system indicates you have and then meet and that'll be your signal to begin your comments? um miss egan, life? i was sorry. no. seeing those speakers here in the chamber. second left. we have any speakers in the queue, madam chair. we have no speakers in the queue. thank you see normal public comments. public common is now close. um with that, uh, is that okay? colleagues daniel . we move to continue item five. and then ah, and, uh and six and seven to that would recommendation to the board. okay with that. second by supervisor ronan and roll call, please. on the motion to continue the ordinance and item number 52. next week. okay to the june 21st meeting of this committee. ah via vice chairmen.

moment, gentlemen. i member saffy. self i remember running run, and i remember walton. walter and i church and i have five ice. thank you, and we're going to have the next department of human resources. we have yet to vote on six and seven, or where you going to wrap that into the sorry i thought we made the motion. oh, i'm sorry. okay well, let me let me make that clear. so um, on the motion by church and also seconded by member on and that the items and six and seven before we did to the yes to the june 11th meeting of the full board with the positive recommendation. okay thank you. thank you in the same motion. thank you so much. and we're gonna get to human resources and then we'll go to the break for 45 minutes.

thank you. and we have our director carol isn't here. good afternoon. uh, chair chan, members of the committee. um thank you for letting us appear here today. i one of first thank our brand new chief financial officer mike carter, who's in the chambers. this is a trial by fire for him. he's had to jump in quick and learn the ways of the city, and he's done a great job. and christina bruce, aka who is also part of our budget team, to, um help us prepare the documents that are in front of you today. um i just want to start by um, thanking the committee for the support that you've given to our department. over the last couple of years. we're changing. we're rebuilding

. we've had almost 70 new hires in this past year. a lot of turnover more internally focused . more than half of those have been internal promotions. um we have largely a new senior staff that are all watching this proceeding. today we're trying hard to bring a lot of new energy into ask ourselves a lot of foundational questions about why we do what we do. and can we do it better? we do recognize that as the central human resources agency, we play a critical role in providing the support that our city departments need to be able to function. um i was especially pleased to hear multiple departments get up in front of you earlier today to say that they are moving forward with filling a lot of vacancies. we've been trying a lot of different things to make that possible and i can see the results slowly. but surely you'll hear later in the presentation. that are vacancy rate has dropped from 14 to 12%

and continuing to go down. i think that's very important, so let's move to slide, the first slide. um our total budget is 100 about 100 and $51 million but i want to make sure the committee knows that about 105 million of that is our workers compensation division. this 105 million were self insured organization or one of the leaders in the state of california of, uh, government employers who are self insured for workers compensation. um that money is spent entirely on city employees. who experience work related injuries or illnesses and the administration in doing that, we, uh do that with vigor and compassion, and i think that that shows in our work the other 46 million, supports all the remainder of our professional practice areas

in administration and regulation of hiring human researches, management and policy development. importantly employee and labor relations. you hear mostly about that, as members of the board. organization. and workforce development. and, of course, the enforcement of our cities. eeo policy. um we were able to meet the mayor's, um, reduction requirements. um largely in two ways. the first, i think is what you would typically think of as a win win. um we do have a large testing facility that we use for in person. masked exams, police fire, others. um that testing center is in an area right now that has very limited public transportation access, and there's no parking. we're moving that testing center to the second floor of 11 55 market street, so we're bringing it right here into the civic core. uh it's already leased. it's

vacant. it's uh, with some work going to be ready for us. and i think it's going to generate a lot of activity on that critical corner of eighth and market street. um and be part of that building where retirement and health services is also housed. um the second area is, uh taking a much closer look at our cost recovery. um this is work that mr kotter has led, um we have completed a full review of our work orders with city departments and found that we have not been fully reimbursed for our costs. so we've worked closely with the mayor's office and we've and with the various departments that are affected, and we've been correcting that we do have a $0.8 million in increases over the current year's, uh, from last year. the major causes are largely out of our control. uh in the areas of workers' compensation and upcoming labor negotiations were

going to be, um, renegotiating all the labor agreements. um the work is already underway and we'll be starting in earnest in january. um all of you on this committee are familiar with that work. um the other big areas that i'm pretty excited about is that, um we are finally going to be, um, bringing e o claims administration that has long been delegated to the department of public health. and uh, we're bringing that back. um directly into our shop. um it does have costs associated with it. we're going to need staff to be able to do that. um, but that's an area of concern. that's been a very large backlog and not a lot of attention that public health has been able to pay in this past year over claims management. um and finally, in our long plan, quite approved systems improvement projects on

the employee, internet and other systems that upgrades so you'll see that in your budget book, let's go to the next slide, please. uh so we've talked a lot about the high vacancy rate critical shortages in the police department. other occupations. it really has affected all aspects. many aspects of city government. um i'm not sure it's a little bit of cold comfort that we're not alone among government employers. it's really been endemic and in the bay area, local government and really in all of california. but nevertheless i think there are steps we can take to improve the process and time involved in hiring. um what you see here? um we through our applicant tracker system that this board has supported and is now operational when we advertise a job automatically populates. um into

the web based, uh, sites that jobseekers actively look at this is the ads you see on linkedin? um when we post the city job, and we're just generating, uh, a lot of interest in our work now we're getting a lot of applicants. i'm going to talk about that in a moment. um you heard? city administrator carmen chu talked about the government operations recovery recovery initiative are part of that, um , is really on the hiring. so we're working closely and behind the scenes and streamlining our entire hiring process, um, to enable us to be able to hire efficiently and timely but i did in my five minutes. want to make sure that budget committee understands that d h. r is acutely aware and focused on the need to increase the pace and efficiency of our hiring process. we really do need

employees to carry out core functions and i want to again. thank you for your support. um you have read and the highly publicized 255 days that it takes to hire. um i wish there was a wand to wave to make it go away. but the problems are complex. um they are embedded in our cities. corporate sipple's, um, of merit based employment that is open to any and all eligible job seekers. um our job is to carry out and support. those core functions. um, while still bringing the efficiency to the process because in any world 255 days, obviously does not meet our needs. um we need generational assessment and update of our systems. and for us, the very first step was to demystify the process. um and that means making sure everybody knows that we have opportunities and that's what you're looking

at there. um let's move on to the next slide. um, talk. a little bit more about this. um. as i mentioned we're down to 12% vacancy rate. um today we have 800 more filled positions than we had at this time last year, so we are seeing a positive trend in the overall time to higher end in the hiring. we have decreased the median time to hire down to 215 days. uh not quite the six month mark, certainly not acceptable, but going in the right direction. um, the most. i think we're going to see change this year, and we're going to see that number go down, um, with working closely with the civil service commission and with our labor partners are most recent initiative, which i think is transformative is that we are offering online on demand.

remote civil service examinations, which means anybody who wants. to participate in the process can participate and can do it from where they are and in the time they want to do it. it requires everybody involved to agree to this. i don't have the authority to just make it happen. it had to be, um uh, it required change in civil service rules. it required the affected unions that are part of our initial pilot to agree that we could do this and use specific certification rules to make it possible. and it also requires our city departments to agree to city central city wide processes to ensure the best outcomes. so um, as as, uh, the latter, as the city administrator reported . this is behind the scenes work . um it not might not sound like a lot, but it's a lot and it's our whole organization. very

focused. i think once we can make this happen, we have now announced the our first go around has been on the two entry level. professional classifications in the administrative analyst series. this is a general series that's used in every city department. we had a 32% vacancy rate 125 vacancies. the first thing we did is we changed the minimum qualifications the city has, i think, a long unexamined practice of uh, really setting the bar too high of saying to work here. you have to have worked somewhere else. we're getting rid of that. so now if you, um graduate from college or you have an egg agree with some experience, you can become an 18 20 administrative analyst. or if you have, uh. college plus work experience, or you have a master's degree. you can become an 18 22. we've basically remove the requirement that before you can be the lucky one to work for

san francisco, you can come and work here. um it's generated tremendous in, uh, interest we now have. it's a gonna be. what do we do with the wealth? we have 30/3300 applicants. for these positions, and it's a very diverse pool. uh so we're pretty excited, and now we're going to run a centralized selection process with all the affected departments and everybody's pretty excited. we're going to use the same methods for other key professional series in personnel analysts and then, uh, others that are coming up. um we're also, um. by the way, once we complete the administrative analysts elections, we will have reduced the time to hire to somewhere between three and four months from time of advertisement to time of selection, um with an open process. lots of people. we had

a we had a big job fairs. you probably have seen that so. were working hard to make this happen . um we're also asking ourselves a lot about our back end administrative processes. i think all of us have had the experience that we do the things we're comfortable with doing and then you have to stop sometimes and say, why am i doing that? so one of the things we do is, um we, um, require everybody to have a medical examination. um and we've looked at it and said , well, you know, this is a big bottleneck and higher and you'll hear this. you know, this is sort of peeling the onion back about what slows hiring down well on our back and press and so once we've made selections we have, um fingerprinting or conviction, history or background checks. we have medical exams. we have other things that we do. and we tend to do these all sequentially, and then we hit the back end and then we get stuck in these processes that take too long. and so we're asking ourselves. a. how can we do it in parallel

and be do we really have to do this? does every existing city employee who gets a promotion have to be fingerprinted before we can promote them? so um, we're going to be breaking a lot of that down. um hopefully, one or more members of the board will take an interest in this at some point, and we can give a full report about it. i think but just to let you know that, um we're there's no one magic solution here, but there's a lots of little things that we can do, and we're working hard to do them, including working closely with the civil service commission. they have a rule book that, um i spared you the hand truck that we used to carry it around. um we have a close partnership with them and you'll hear from them. about it, but we're looking through those rules. first of all, to make them something that any person can understand. when they read them. i can barely understand them and, um, and to try and economize them so that they can actually regulate our merit system in a way that every applicant and employee can understand. and that we in the

central agency and our hr partners around the city can understand so we can implement it. and, um, enforce it consistently across the city. this is all part of our of apps . uh recovery work, and, uh, it it is part of reaffirming our commitment to merit based employment. um next slide, please. and i'm sorry for keeping you over my five minutes. i will hurry up. um we , uh we've titled this slide, improving employee experience. um our goal is really to make sure that the city is an excellent place to work for all of our employees. um, where people feel respected and valued valued at work, and we support them in their career goals. um i think this board knows that when i first became the d h r director we commissioned a report from the william gould,

the former chair of the national labor relations board, agricultural labor relations board distinguished professor emeritus at stanford school of law, well known in our field of labor relations and human resources, um, to look at all of our e o practices are hiring procedures and our career advancement opportunities. in that report has really helped to frame our approach to be much more comprehensive and intentional on how we focus on our employees. um we've i'm just going to give you some notion of some of the work we've been doing. we've expanded our work on career pathways. um we've launched grow your career workshops. we have reinvigorated our apprenticeship. sf work. we've worked closely in partnership with many of our labor partners, laborers, union service employees, uh, professional and technical engineers and others. um. we

have brought new life into the ci you work training program, which allows s e i u members to complete their degree or certificate programs so that they can advance their careers and to do this on work time. that's a big initiative with a big investment from the city to make that happen. um we are also committed to respectful and inclusive. workplaces for all employees. um we've talked to this board. um i think that if you look in your own every board member has access to our learning management system. i urge you if you haven't to take a look at it, you'll see a lot of the trainings that we've loaded in there. one of them is, um, an online training, transgender 101. all employees are encouraged to take this training. um we've collectively our team is delivered over 300 instructor led workshops to departments on various city topics communicating across

cultures growing your career effective communication. um and , um, you know, we've we're working to implement professor gould's recommendations. um implementing 30 days on case intake. and finally, of course, the really big thing that we're doing of taking back, um, directly into dhr, um, department of public health e o initiatives, um let's go to the, uh next slide, please. our key priorities here. um. to continue our work with the government operations recovery initiative. uh, and to really continue to press to bring dhr into modern era by. really putting into place core technology infrastructure. um that, in my view has been under invested over a generation. we're

catching up. i talked about applicant tracking. um, we're moving forward with digital personnel records and on boarding to improve employee experience and to give us a much better view of the life cycle of all city employees from one central location. we're moving to be able to use this and demand testing, um, citywide and to allow us to do reference checks automatically through systems. that's another major piece of bottleneck in the hiring process is reference checks and along with this our new coit project to replace legacy systems and enhanced functionality for our employee, internet, um so i hope the board supports that work. we're very much looking forward to it. and uh, finally, um, i just want to make sure that the board is aware this is work that we completed. uh six or so months ago to finally write the new,

equitable, fair and respectful workplace policy. um this was an area where we had in our minds expectations of our employees but never set them out. clearly, we have done that now. we've adopted training. um it was adopted in august of 2022. it's a it's a required for all city employees to complete. we have additional training for managers and supervisors. we are doing what we can to lay the foundation for employees when they come to work to be able to uh, countdown and expect to be treated well and fairly with dignity. um and that, i think is our core mission at dhr and, um we? of course, i mentioned bargaining. its upcoming the work is starting. and finally before i sit down, and i hope maybe there's a few questions before lunch. significant goal of mine. um, this is the year that we're going to get it started is to open a career

center. um this is a concept that is been embedded in the ci you labor agreement for some time, but it's never been realized. we're going to open it right here in city hall to walk in the front door on polk street and the park street side and you're going to see, um, welcoming center for all employees, all applicants to come find out what their opportunities are to provide coaching to provide training to provide access. um and, uh, to put ourselves out there as a an employer that's on the move that wants people and welcomes people . um and give that some physical presence right here in the building where it belongs. so again, thank the board for your support. i'm happy to go through our vacant positions. um but i think it's all right there in your budget book were pretty uncomplicated organization. um. thank you, uh, director rises him and i don't see any name on

the roster. we appreciate a presentation and with that we're going to go to recess and, uh, a lunch recess and we're going to return at 1 45 and that the first city departments that um, will be coming right up when we return is the ethics commission . so at 1 45. we will start with ethics well back to the budget and appropriations committee. ah after the lunch recess, and so the first city department after recess, as announced before recess is our ethics commission.

remembers i am a guy three second deal and the acting executive director with the ethics commission. um i appreciate the opportunity to present the commission's budget here today. um i'll start with an overview of our operating budget as proposed. in a fight 24. we're looking at a reduction of 5. and if i 25 reduction of 28% of our operating budget this is primarily due to significant reduction in our staffing. um currently we have 34 authorized positions. um what, um, reductions due to attrition savings targets that city departments are expected to meet. and additional target reductions from the mayor's office where essentially looking at reduced staffing by 47%

effectively at the beginning of f. i 25 essentially in about a year. and this will um, significantly affect our ability to meet. um some of the essential mandates for a commission. to ensure that we continue to promote transparency and accountability in city government. um to give you a summary of our staffing impact. we currently have 34 positions of which 24 positions are filled. um there were two positions for which funding was set to expire this month. those positions have been extended for one year, and we are thankful for that. um currently we have 10 vacancies off which we understand that we can fill two, including the executive director's position. um and in about a year by end of next june, we're looking at, uh 10 positions for which funding will

expire. of which, um, seven positions are filled. and we are , um, extremely concerned about attrition risk, um, for those positions. um just to give you an idea of the different program areas that are impacted. i want to talk about our campaign finance program. um this is essentially, um, you know the program to implement cities campaign finance laws. our office has charter mandated duties to perform filing officer functions for this program. um we have staff members who provide compliance assistance members who provide assistance with making sure that systems are, um up and running for access by the public as well as enforcement staff assisting with this program, so in the upcoming years. we're looking at four positions that are impacted, uh , two positions in our compliance division include,

which includes manager of the compliance division. um these two positions happen to be vacant right before a budget submission deadline, and we haven't been able to fill them and we understand that based on , you know, budget situation and we may not be able to fill them. um, what this would mean is that, um be candidates and committees who may need our assistance to ensure that their , um, committee accounts are set up correctly so that they can disclose their campaign activity to the public. we will not have sufficient staffing to provide that kind of support. um additionally, the one position um, that currently supports, um , online tools for this program , in addition to many other programs, that this particular role of the eyes, engineer position support, um these are tools that are used by the public and the press to see to easily find information about campaign finance activity, so the statements that are disclosed are available. on our

website. however we create visualization tools for people to be able to see them and interpret them easily. those tools for the march election will be available since we got one year extension for the position, however, for the november election, but i do around july is when that funding expires so we will may not be able to continue that service. um separately. um, we're also looking at funding expiring for one of our investigators. who assist with enforcement campaign finance laws so again that will also have an impact on our enforcement ability. so overall , we feel that the proposed budget will overall weekend ability to administer campaign finance laws. um and also, um, affect our ability to provide information to the public. um and, um, transparency to the public. uh just to briefly talk about a few more areas. uh um

the second major area is the enforcement division in the first year. we're looking at a reduction by 25% and in the second year by 50% essentially, we've made a lot of progress in this area over the last few years to, um, to work towards bls recommendations. they have done an audit in 2020. i will stop there. but others definitely more information on our presentation and happy to answer questions. thank you, uh , supervisor ronan would this is extremely alarming and i have a million questions, but i actually want to see the rest of your presentation. if you could finish it. of course. thank you. just wanna for everyone else, too. i think this morning we should have been more efficient . so my apologies to everybody. then we're now starting the timer for five minutes. representation as a reminder, but please do finish your presentation, especially when a department as important and as ethics is being gutted. literally being gutted. sorry i

this is new to me. please continue. thank you for the opportunity to continue. my presentation will try to keep it brief in the interest of time. so in the enforcement area, essentially, um, we're looking at um, reduction in our staffing . we've been making a lot of progress. purple is recommendations have added an appendix d, where you can see the improvements that we've made in terms of ah ability to close cases and the duration that it takes for us to actually review preliminary matter, so there's great progress there, however, with staffing reductions, we are expecting those backlogs to go up and our durations to take time. um again. these are the opposition's expiring in, um at the end of june next year or however, we are expecting attrition risk. um, this year. separately there's also case management system for which we may not have support in the second year. um moving to another major area. this is the

ethics training and outreach program that we had launched. um recently got funding in recent years. for this program, there are four positions for his funding will expire. by end of june. um essentially, you know, this is also one of the focus areas of the bailey audit in 2020. there are you know, indicated that we should try to provide targeted trainings for employees, and that's essentially what this program is trying to do. and, um, we have already started working with departments. we are concerned that we may not have funding to continue this program starting in year two. and also seeing patrician risk here. it's possible that we may not even be able to continue some of this work in in a fight 24 if you don't have the staffing. um finally the program area again that's affected as the farm 700 program last year, we had transitioned from paper based filing to electronic filing for city employees who are required to file this form roughly about 5000 or so and we had added a

position with requested opposition to provide filing assistance for um departments, filing officers and filers. um that position has been extended for one year. however the employee who was in that position is no longer with our office. so what we're seeing is that when we get funding one year at a time, there's a huge attrition risk. um and it also, you know, add. not only does it provide disruption of services. it also adds work for the department to be able to do recruitment again. so we're concerned that the we got funding for one year. it may be a challenge to fill this position, and even if we feel it is possibly going to be attrition again. um separately. there's also the i s engineer position that provides, um, support for this area, so to overall just summarize um, these are all the areas where we see funding gaps. again you know, we certainly understand and appreciate cities need to make certain decisions, one at a

time. but as a small department, what we're seeing is that, um adds significant impact to our ability to perform an essential functions causes unexpected disruptions. if the intent is to continue these programs, which we think it should be, because these are programs that implement laws that are ongoing . these are services that provide critical services to the public and city employees. so we want to be able to forecast and plan ahead and be able to support them for long term. our request and our budget. this this year was to convert many of these positions that are expiring. ah to be ongoing permanent positions. they were requested as limited term positions do this was right. during the pandemic when we knew that by the budget situation for the city was tough, and, um, we also, um we knew that a lot of the civil service recruitment was on hold. so now that we know what these additional positions

and capacity can do for our department, where asking to convert them into permanent positions, so that is our ask today and have added additional information in terms of our ark shirt and budget allocations. uh, later in the appendix, happy to answer any questions that you may have and thank you for the opportunity to complete the presentation. supervisor ronan thank you. um do you happen to know on the top of your hand? how many department heads and city employees were indicted in the last five years by the f b? i don't have that exact number, but suddenly concerning number yes. um. i think i can name like five off the top of my head. and yet, despite that the mayor's gutting the ethics department. can we hear from you, uh, director danny, this is extremely alarming. yes so, um, thank you guys for going through the presentation, and i just want to explain for a moment. what? you're seeing an ethics

ethics budget. so, um the ethics commission over the past several years has initiated new programs and projects, and all of those programs and projects have started as sort of discrete programs funded and implemented with limited term positions, so temporary staff two of those positions i believe expire in the current year, and we're extending funding for those two positions so the department can continue all those operations. um i'm sorry to those positions expire next budget year and we're continuing funding for those positions. in the second year of the budget. our goal is to work with the new director who is coming on with the ethics commission to understand which of these positions programs should be funded on an ongoing basis. so right now the positions that are not funded in the second year of the budget, they're expiring. there are limited term positions and expire at the end of the first year. so these weren't necessarily cuts to ethics budget, but just not an

extension of those positions at this time, and just one more thing to add is ethics, like many departments has been operating with a lot of vacancies this year for the attrition savings you're seeing this budget is to more closely aligned with some of the current vacancies that the department already currently has. to a couple a couple of questions. um why are they expiring positions ? are they grant funded or is that a problem of our own making? they're not grant funding often to it by design. oftentimes we, um through the budget process, the mayor's office. the board departments proposed funding positions. for a limited duration often to complete just like i said, discrete projects, and so all of these programs, i believe to start it as discrete new things that the ethics commission was doing, then reevaluate what the ongoing operational needed for the department form. 700

compliance. can't campaign finance education about ethics laws. electronic disclosure to the press has access to our financial documents. those are discrete project and not ongoing needs. i believe some of the positions augment some of the services that kind of underlying operational services and have been new technologies, new processes that the commission has rolled out over time to advance some of the core programs. is there any other city department in the city that has expiring positions for their basic functions? there are many other departments that yes, have expiring positions for their basic functions. but for in terms of basic functions again, i think that's something that our office wants to explore with the department as they staff up next year and bring on a new director. i'm going to take a moment. uh the fact that we have director arntz here just to ask a quick question. how many elections are happening? uh in 2024 quick schedule elections,

but how many positions like name all the city positions that might be eligible for campaign finance that are happening in 2024. well you've got the five local officers are moving from this year to next november. and then the supervisors. contests will be on the ballot. can you name them off one by one, if you can memorize them so that we have the ad supervisor district, so that's 135 and 11. so that's six supervisor district. it's also yeah, mayor, sheriff district attorney city attorney sheriff district attorney. uh treasurer on the ballot. okay, and that's in november. and then, um. okay, so there's no nobody in march that there's no campaign finance for march of the begins in march, right because people begin their matching okay. so we have 6789

10 major citywide positions, and they're all eligible for uh, camp for matching funds. is that correct? candidates campaigns on her side. thank you. thank you, director aren't i just i just wanted to make sure we knew that candidates for mayor and the board of supervisors are are eligible to participate in the program, assuming they qualify the apartments so when can candidates. start drawing down matching funds for the first time. uh when they're running for office if they if they meet all of the requirements, i can find out the exact timeframe, but i believe it's typically happens around june time frame around june. that's when, um, normally for the november election begins, but i can confirm what my staff and when are you? um tell me again when you're going to lose all these positions, essentially, um, the

for the campaign finance administration. we've we have a concedes that we're not able to fill, so we already don't have positions there. um and typically, campaign activity happens well, in advance of you know the election so that committee is trying to set up and they need help now, but during the election years, when, when it peaks, so yes, we already don't have staff and through sheriff, i may add just one comment, um regarding projects based positions. these positions were added in 2022. i believe um, we requested in fy 21 or 22. and this was again we were trying to implement recommendations from the block as well as what was on this committee. yeah, yes, and also what we felt was needed to address. you know the corruption scandal and to help provide education, so, um, at that time we requested them as project based positions. because we knew we were independent, mick. um

and we thought that was the best way to allocate those positions . but this time we specifically have asked for ongoing funding because we think it's it needs to be part of our baseline funding. um because, as you mentioned, we also think that needs to be a regular part of, um you know our operations to be able to support ongoing administration of these laws. um the budget director mentioned that you had high vacancies and high attrition. why is that recently in the last six months or so, we've had we've lost four employees. um typically, if you've been able to fill them, the vacancies have been due to attrition out of the 10. there were only two positions that we haven't actually filled in recent times. the rest were all filled. in the last year or year and a half or so. so it was also due to promotions we had in donald promotions, so there will vacancies, um, generally for as a small department for we're also saying is that we have about what about thr we have a

great working relationship with them, but they were also having some short staffing shortages. so even in hiding with heavily dependent on them, we don't have any internal hr. resources so we can only move as fast as they can also move and we have received great service from them. but there's been staffing issues there to here. have you ever had, um they can funded positions that you wanted to hire for that you were not given the go ahead by the mayor's office to begin the process. to begin the funding process or sorry. begin the hiding time. i mean part as part of the hiring process. you know this board and the mayor, we come to budget agreement. we fund the positions , but then before you actually hire them, many departments have to get the okay and the go ahead from the mayor's office before they're able to actually higher. has that ever been an impediment for you to hire these vacant positions? we understand that to be in the city's pluses. it has not. we have not experienced

challenges with that. other than we understand that as a requirement from a charge perspective to get approvals before we can recruit um. one additional thing if i can add through chair, um we? we have received funding for two positions that are expiring this month. but the problem is that this staff member is no longer with that office. right so there's funding there's going to be delaying hiding, and by the time we hire, it's going to be a short duration. that person may leave. we're going to see that in mars. in year two. probably not too little happen within a year. so that's our biggest concern. if they intend us to keep these positions, it's helpful for us to know sooner. so that we can welcome that direction because of the decision to fund his position is made on june 1st next year. they're all going to be there going to be vacancies and we're going to start from scratch, and it's not a good use of cities resources to be spending time recruiting nonstop. i actually

find this shocking and unbelievable. sorry, so one other question before i summarize how shocking and unbelievable this is. um we have been working for years to adequately staff. the ethics commission. based on you know the fbi having to come in and clean house by in dining, several department heads and employees the fact that the ethics commissioner had unbelievable delays and auditing compliance with our campaign finance laws. uh etcetera, etcetera of the biella did a big report. we've been working to, uh, implement the recommendations from the b l a, um what will we haven't even finished? we haven't been finished properly staffing up to properly implement all of those , uh, recommendations. we've seen lots of improvements. what

would happen like, give us give us like what's going to happen for the for those three things that the three main areas number one, making sure that our city employees. acting ethically and within the law number two making sure that the press, which is our watchdog, our ethics watchdog, and incredibly important has access to the information that they need to keep city actors honest and number three to run a uh um, a campaign. uh finance program that has made it possible for people that aren't independently wealthy to run for these seats in government and care about things like ethics. um what will this gutting of the department due to your major work areas will be severe impact. essentially you know, you're talking about providing services to cities. absolutely the

training the program that we're talking about. is to give that proactive. um, you know, support and resources for departments and city employees. we want them to see us as a resource. um one of the challenges with, um having turnover in staff is that we will not get the opportunity to develop the institutional knowledge that is needed for an agency that's provided advice and guidance so absolutely, you know, has impact on our ability to provide that support in terms of public. um the information and transparency is key. especially during an election for them to be able to make decisions for themselves, um and had challenges and able to, you know, being able to interpret the data or find information on on our website, which is why we created these tools to make it easier for them so absolutely that that will have impact to, um and you know, administering campaign finance program. you know, part of that. i know you mentioned artists. that's an area that we're working on as well. the board had issued a adopted a resolution as urging the ethics commission to expedite their audit work. we're

actively working on that if we don't get these staffing resources, we may very well need to pull staff from other areas so it could put us further behind in some of the other programmatic priorities because we don't with the charter mandated duties we need to meet, so the overall impact will be pretty severe. i think it takes some chutzpah for a city government that has dealt with the level of ethics controversy that we have dealt with that the mayor would present us this budget gutting the ethics department. i think it's a disgrace. i think it's a disgrace that in gear when we have 10 major offices where, uh , everyone from six members of the board of supervisors to the mayor herself. to the district attorney not to make sure that the ethics office which is responsible for campaign, uh, finance for, um uh, the public funding program. uh to cut the

department so it basically comes useless. the look is very suspicious. it does not give people faith in our government. it is an assault on free press and in transparency, and i cannot believe you came to us proposing this budget budget. i am appalled. i have no words. and supervisor ronan just to restate again. um i realize and regret it looks like it looks on paper in terms of the number of reduction urine, inventing positions that are expiring, which are regular needed positions. that's that's not a that's not an excuse again. i just want to state so a similar . it's just a similar example. the assessor recorder, who was here earlier today has been working for multiple years on this new property tax assessment system. that project has been funded with limited term positions over the past many, many years as they figure out what are the ongoing operational

needs to sustain that project. so similarly, the department said, has had a lot of vacancies . we have increased funding to hr in this budget to help them fill some of their vacancies. we have worked with them to make sure that next year they have what they need operationally to sustain current services. and we look forward to working with the new director of this part department, which has also been vacant for about a year. i think determine on going into next year. what are among these new programs that have started with limited term positions. what are the ongoing operational needs should become part of the operational core of this department. so the plan there's no intention to gut this department. um but i will acknowledge that it is, um we hope and we plan to revisit this with the department the coming year to figure out what you just heard from the acting director that this guts her department. you just heard from the acting director that the employers will not stay. you just made it almost impossible. for can't

protect candidates for 10 of the most important offices in the city. to get matching funds through the public financing program. you just set back the work that this board has done over the past five years during the worst ethics scandal in the country. um you just you just set that work back. back to where we began in the first place. this is not just a bad look. this is unethical and i will not vote for any budget. the guts are ethics department. i find this outrageous. i find it insulting and i am nad. thank you, supervisor ronan. um, i want to quickly conclude this, um, and to say just for this section and we look forward to seeing you back next week that i wanted to. actually it's a long statements from the ethics commission president evenly i'm

going to re parts of it only to just highlight what we have concluded here and from your presentation that here. here's part of that statement, the mayor's budget we cut the ethics commissions operating budget by 32% and reduce the agency staff by 40% these cuts would eliminate or drastically curtail many of the commission's most important programs. the commission will lose its staffing responsible for monitoring and enforcing compliance. we campaign finance laws. and summarizing campaign. um finance activities for the public, which would occur during the 2024 general election. this election will include races from mayor boris supervisors, 12 other local elected offices and any number of local ballot measures. it is likely that spending on these races were total in the millions of dollars. transparency is the

only way the public understand how money is spent to influence their vote. i so appreciate supervisor ronan today your comments and passion to come. bringing to this committee is exactly why we need you here and your leadership. um i think that it's very clear message that, um i would want to say that while only just the three of us here at this moment. um i would say that so advisor ronan speaks for us. ah in in this, uh basically defunding of the ethics for the entire city, and we look forward to the conversation to see how we can problem solved is, um, for the coming week. and with that, thank you so much, um we're going to go to the next ah , which is very timely. i think that we scheduled that way. it's the department of election. afternoon sir. visors john arntz circuit elections. then every

budget director bryan patel is going to run this slide show. and go to the picture. alright so for the department of elections, proposed budgets for 23, 24 and 24 25. these pipe charts showing pretty well how our budgets are structured around the elections that we conduct during a fiscal year. the 23 24 budget is based on a three card ballot for the presidential primary election. and then the 24 25 budget is structured around a six card ballot for the presidential general election. and their costs are very, you know, they vary by amounts of very consistent by type, and that's been the case for elections for quite a while. but next month

then for our objectives, how this budget supports our objectives. we do think this budget does support the department's objective or mission to conduct free, fair and functional elections with objectives to provide convenient , accessible and equitable election services for all voters and potential voters. of course, these objectives. programs include the vote by mail in person voting programs in our multilingual voter outreach education programs. to the next one. then how do how does it start that the department assess or measure? it's if it's a meeting. it's objectives. the department actually receives a lot of external feedback each election cycle from the voters from the time that the election cycle begins, and then as we move through the election cycle until the election is certified , and we also provide surveys for voters and for other folks to provide back to us. for input and then we also have more static measurements in the

controllers performance reports. the static measurements would be the outreach events. number of outreach, advanced number of bilingual poll workers recruited number of accessible polling places and also the customer rating that we receive. and we also have internal measurements such as you know, someone calls we pick up the phone and language at the time of the call. uh, we respond. emails the day that the received we, uh process but by mail applications for bell applications the same day. so we so we're getting we're getting continuously back from the voters were also internally trying to meet the services that we really pledged to the voters each election. go ahead next. then slide number five. ah! in the challenges. uh . for uh, meeting our mission elections themselves. this just the unknowns that we have prior to each election. we grow from an office around 40 people to an office of close to 300 people.

we have to onboard those temporary need employees so that they are able to fulfill the department's mission and provide good services to the voters. and then also, we don't know the number of candidates and measures on the ballot cards. i don't know the number of cards we don't know the number of paid arguments going into the border permission pamphlet, the kind of production challenges that will that will hold for us, and then as we go through the election cycle, the trans the voters have as far as when they return. their ballots also impacts that department so we have baselines for all these that we do to measure our performance and also measure how we allocate resources through the election cycle. go to number six. then regarding the reductions, the targets that we have met. so when the voters approved prop h last november 22 election ah, that moved five local contest. the mayor, sheriff district attorney city attorney treasurer. to the presidential

general ballot. uh and then also basically reduced the department's costs for the fiscal year by $7.8 million. that really was a large part of the savings. that department could contribute to the to the city's economic situation. and then for the november for the 24 25 budget cycle. we did we found some, uh, efficiencies within our workspace and also within our administrative processes. and then also, um we have planned sort of a preventive measure with the trailing legislation sponsored by the mayor's office. that the board hopefully will approve to not include the proponents and opponents, uh on the local ballot measures because that would likely add another card, at least for each of the next two elections, so the minimum additional cost would be a minute, a million dollars for combined for the march in november elections. i'll go ahead and go to the next one.

then for the. the trailing legislation will come back to that. i think in the next item, but basically simply, bill 14 16 requires before you do that. let's call item number eight actually goes with it. okay technically, we need to do that before you go into the presentation. thank you. and before i do that, for the group coming in, we are in the middle of discussion. so if you can please be quiet on your way in so just so we can continue with our proceedings. thank you so much. and before i call item eight with the arrival of member sofa and the presence of supervisor and guardia we are now convened, has a special meeting of the board of supervisors. and with that item eight his an ordinance amending the municipal elections code to opt out of state law that would require the names of supporters and opponents of a local ballot measure to be listed in the ballot statement or question for the measure. members of the

public who wish to comment on how the ordinance regarding the municipal elections code should call 4156550001 meeting idea of 25910926245 press pound twice. and if you haven't already done so pleased i'll start three lined up to speak promptly indicate that you have raised your hand and please wait until the system indicates you having that muted and you may begin your comments regarding the ordinance regarding the municipal elections cut. um madam chair. thank you, mr clark. and with that, please continue. the presentation, including the item eight. which is interesting. thank you. church in so the ordinance that we're putting forward as chilling legislation would actually allow san francisco to opt out of the state requirement to place the names of the proponents and opponents. the official proponents, opponents with the ballot questions on on the local for the local measures. and the reason we're asking for this opt out is from our calculations, even going from