forward with on a case by case basis. >> i think you all are aware of the calendar for the budget process but just as a reminder later this month the comptroller will issue a six month report which will give us a view into what the city's financial situation look like for july through december of 2024 and departments are required to submit their budget proposals to the mayor's office by february 21st and june 1st is when your rewarding and challenging work kicks off in earnest. so with that i'm happy to answer any questions you may have. the comptroller is also here and available to answer questions as well. >> thank you mr. mikulski i really appreciate it that you stepping into into this role

and it looks like you've been doing this the whole time. i think the question will be referencing the year that mayor brea i believe did actually also provide a mid-year budget cut for this year as well. is that correct? and that was for 8%. >> so mayor breed did make a few instructions on containing costs in the current fiscal year before before me before she left office one which i'm sure you're all very familiar with was around not deploying particular board ad backs in the current fiscal year and the second was around know i'm blanking i can't remember the second right now it'll come back to me in a second but no problem but there was not as particular there was not a particular current year reduction requirement provided

to departments. oh the second was related to staffing departments were asked more voluntarily if they were able to provide suggestions for controlling their salary and fringe costs for their hiring if they thought that they were going to be able to have savings for salaries and benefits in the current year. >> we asked departments to articulate that to the mayor's office but it wasn't a required cut guy. >> and then do we know roughly about how much of the funding that was pause or programing that was paused from the board's restoration? i wouldn't call it ad back for this year but i don't remember. i would have to get back to you on that. >> yes, i look forward to kind of learning more more about that number for the current fiscal year and particularly which programing that was actually pause or funding i should say for which programing that was particularly pulse for

there has been no changes since the last time the committee heard that information but i'm happy to share again i don't know if the committee actually had that information. >> okay. so we will i'm that's what i'm looking for. okay. i'm going to provide a little bit of feedback and thank you so much for actually the presentation itself. answer my questions between you know, the difference of the mayor bree's budget instruction and mayor lurie's looks like the and from you you're and your presentation is that mayor laurie has a firm mayor breeds budget instruction what additional sort of just kind of reading situ to some of the process about hiring reinstitute some of the process about combing through the contract whether it proceeds or not i, i have questions about really the hiring freeze and trying to understand i appreciate the fact that you

continue to honor offer may prior to january 9th only because that's people's livelihood and i think the hiring freeze announcement create a bit of confusion and for some just learning about it and i think clearly we we all can work together to to make sure that we communicate that more effectively how we understand that the thinking about hiring freeze does that also incorporating a few things including grant position grant positions that are funded by you know beard state grant or federal grant but also help us understand that those who are currently for example which it's been a longstanding city practice that we have temporary positions and that at some point they would then and they're they're not necessarily grant positions but they're there's two type there's two grant positions that are temporary and then there's really just a temporary position but funded by general

fund and then with those with that category funded by the general fund usually will roll into civil service process because they actually are now then when they especially if they're more than two fiscal years they become really baseline so to speak. what are we doing interim in terms of hiring freeze? will hiring freeze actually impact those temporary positions? that's an excellent question. the hiring freeze does impact those positions. >> however, we are having as part of the active conversations that we're having with all the departments that is one of the main areas of consistency of requests that we're seeing across departments for positions that they're requesting to be able to proceed with hiring is for conversion of existing exempt positions into permanent civil service positions and i would say we're looking at those requests pretty favorably. >> yeah, and i think that's a question that i think for us to

trying to understand upcoming for this budget in the conversation a few things but both the hiring freeze but also to determine attrition rate i think we have been as 7% and pretty consistent all across and we're trying to maintain that but with the hiring freeze and then but also you're now turning the temporary positions into civil service position. i'm just trying to understand all the variables and how we're going to put that together in the coming months. >> i really appreciate the understanding of few things. one is with that is how many of those are temporary positions that you're now evaluate that you're considering turning into a permanent positions and the breakdown between enterprise and non enterprise and and out of which among city departments and how many are those where i'm interested in learning more about and with that and because i saw that that the thought and i share that that the redundancy among city

departments and i want to add a layer to and be to add a nuance to that when we talk about redundancy and not just the city existing operation like administrative calls or administrative staffing but it's also contracting redundancy. >> again i'm saying this in the in the grand picture of the fact that we just passed this ordinance allowing such a range of contracting waivers that i am eager to learn about how are we going to and then potentially consolidating some of the contracts, eliminating redundancy among contracts that are actually tasking different contractors but doing very similar work or even the same work and then also through like i can give you an example like for housing vouchers or maybe like just housing in general you do have mayor's office of housing you know department of homelessness and support of housing and and and even like

dogs and human services agency everybody have some kind of housing vouchers with different contractors. will there be an appetite to really figure out redundancy among contracting? >> absolutely. okay. so clearly i'm i'm i am excited actually and i'm eager to learn more and i think that this again, you know, in the big picture and because this is where i'm going to touch last point about the baseline because you listed the baseline about studhich also tching on the general children's general children's baseline funds and many others is that and dignity fund and we have a lot of set asides that really like what we're going to look to is a six month report from our controllers and help us understand and project the deficit threshold of anywhere 50 millions that really help us determine really where we're going to how are we going to

meet our baseline obligations. >> yes. >> with that said, i mean i'm looking to the comptroller's office kind of help us understand i know that, you know, it's not going to come until sometime in march for our six month projection. do we at this moment you know, because you're already set 250 million do we think i think it's going to hold your projection has been pretty accurate for the last few years. so i'm just trying to understand i assume there's not a rug going to pull under us. >> thank you, chair and greg wagner, comptroller, the six month report is scheduled to be coming out later this month. we don't have results for you but in that report as you suggest, we look at both updated projections of revenue for the current year, updated projections of departmental expenditures and activities for the current year to the extent that there is favorable news in the current year then that would create projected fund

balance that would be available to be used in the upcoming two year budget cycle. to the extent that there's a shortfall in the current year compared to budget then that would create a gap that would be required to be balanced in order to get us through the end of june 30th. so each time we issue one of those six month or nine month reports it affects the assumption about available fund balance which is then programed into the deficit projection for the coming years. so we will have that before this committee in the coming weeks. >> thank you and vice chair dorsey thank you chair chin i appreciate that. it was a great presentation and i think i have mentioned to a lot of folks that i am excited to be on this committee and i'm looking forward to, you know, sort of becoming a student of this and nerding out on a lot of this. i'm not going to do that at the expense of everyone's time here. so i will probably follow up with some some questions but

there was one slide 14 that i want to ask you to ask you about. i serve on the health service board and i note that actually one and one couple of just sort of questions for my edification is the bay area cpi or medical cpi or health care cpi or is that overall cpi? >> i'm going to direct your questions to the comptroller's office. they're better positioned to answer than i am. thank you, michel. always my comptroller's office the cpi we use for wages is overall cpi. okay? we don't use medical cpi. we use a projection from the health service system on which we sort of translate what they're projecting. they're going to negotiate on a calendar year basis and then we kind of blended into a fiscal year basis and then we take updated enrollment information as we get it from them. >> okay. >> and then there's a reference in here to see a ten and i'm trying to remember if it's not the nine county bay area this is just the ten the ten biggest

counties for health care. the blue line i believe it's the ten largest counties in california. >> do you know when we'll have the updated numbers and i'll tell you what i'm what i'm going for or interested in. we got that number down a little bit and i know that we did as a city an rfp process that wasn't without political pain but you know hopefully and still isn't and i know that right now even i'm hearing from some of the retirees that they have some concerns about some things because we moved from united health care to a blue shield, i think we got some cost savings in that. i'm wondering i kind of want to get a sense of if we should be being more intentional about rfp processes in our health care if if there was some success that we got in that i

don't what i don't know is i would assume that if the california ten number will tell us if that number is continuing to go and we got ours down, that would be a good indication that we did something right with an rfp process. so one is is do you do you think that that rfp process that we did is a is what we can attribute that down downward curve to and do we know when we're going to get the california ten number? >> i would probably defer some of that to the health service system. but one thing that i do know is that the the spike that so the historical average is kind of closer to 6 or 7 or something like that. we had we had that one year spike. i think some of that was kind of health care systems you know, kind of trying to restabilize after massive shifts in cost increases post covid they lost a lot of staff. the processes changed. i think it also had to do with

trying to get rate increases in under the wire before a state cap on health care rate increases goes into effect. okay. i'm just remembering from director and her presentation and i, i, i think those were two things that were kind of causing the spike and also just that medicare and medicaid reimbursement rates are kind of stagnant while costs are rising and so more of the burden of cost is falling on the private insurance market that we are participating in as an employer . so as to whether the rfp process helped kind of like, you know, bend the curve, bend the cost curve. i think that's really a question for them. it sounds like with the retiree health it sounds like it definitely did. and as to when the ten counties survey is ready, we have to get back to you on that. >> okay. okay. it's a thank you and supervisor

and gaudio. >> yes, i have a question. i think it's slide seven um where it talks about the major assumptions and there's a reference to a 7.2% rate of return on pension investments. i'm just wondering like is that a generous assumption and optimistic or realistic and if it doesn't go to 7.2, what difference does one percentage point or even a 10th of a percentage point make one way or the other as far as it's great we made more or we lost a certain amount i'm going to refer you to the comptroller's office again. >> sure. so the investment gains or losses or amortized over a five year period just to kind of keep the rates slightly smoother otherwise we'd be on quite the roller coaster because the returns as i'm sure you're aware are can be extremely volatile. they can be way below 7.2% closer to zero. they can be in the double digits to the good and so there's there's a lot of just

it's it's stock market activity and so how does it affect like if the overall is just even a 10th or even a full percentage one way or the other? does it how much throw things out of whack like how much are we depending on this being an even keel 7.2 over the five year period is it something that could that is the thing we should know and can tell you okay great because it's exactly the right question to ask like if you miss it by and you know it's a sensitivity analysis if you miss it by an increment one way or the other, what does it mean to you? >> right. i'm trying to get at is if if we're making an assumption documents or assuming 7.2 then we're basing everything based on that assumption and if we find out oh it wasn't that and then everything all the work we did could be i just want to get a sense of how much extra work do we need to do if it doesn't meet that 7.2 or is there a grace like amount to be in the tens of millions like the difference between what we

thought and what it ended up being? um some of the challenge that we have with projecting the rates is just knowing the market value of the assets at the end of the prior year which is an input to the rate setting and because some of that so many of the assets that we have are not publicly traded. knowing the values takes a long time and so we're kind of we're waiting on that. we think we could see what all the publicly valued assets are immediately the private ones. it takes more time and so and they could swing for different directions. they don't always behave similarly to publicly traded assets. so it just means that we sometimes in the fall and we had this not last not this past fall but the year before that we had a surprise in the ending kind of in the investment earnings um those those ones that it takes us a long time to get news on they were to the bad and so that that caused a bit of a surprise in the wrong direction right so in these assumption documents is it better to be more pessimistic.

so that way there's could be pleasant surprises versus if we try to like you know, be optimistic then it's like oh man, how are we going to make up this stuff? like i'm just wondering what thought goes into already or is it just a standard you just do the average and that's what it is. >> well we definitely consult with the retirement systems actuary to kind of say, you know like tell me what you're you know they have investment advisors, you know, tell me what clients telling you and what are you seeing so we do for certain consult with them and we do get monthly investment reports from them and we have in the past if we've noticed that the first half of the year the earnings have just been negative you know below 7.2 or even below zero, right? anything anything below the expectation if we notice that they're trending remarkably below what we expect, we will update our assumption. >> it's a tricky thing to do because you can you can have

big swings very quickly but we have done that in the past if we thought it was from that from like the information that we can collect if we think it's warranted. >> we have done that before. right. thank you. thank you. and hence we have the three and six and nine months reports we appreciate it and thank you so much for all your work. we do wish sometimes you have the eight ball and just like shake it we know the answer to it we know is challenging and so of all the more reason we really think the controller would think the budget and legislative analyst and we really also thank the mayor's budget office really working together for all these report. we know that time is tough. we really also appreciate i mean i know that they don't hear enough but we do appreciate all the city departments to in a tough time like this to figure out ways to help the city can do more with less because i think those days are coming and so thank you. i don't think that we have any more questions on this presentation.

we know that we will come back soon enough for the six months report and we have further discussion dan when we have more information that we can put together, we'll follow up separately on the questions. i just have a bit about the hiring freeze temporary positions as well as the redundancy strategy to eliminating redundancy strategy for contracting and so with that we will go to public comments on this item. >> yes. if we have any members of the public of joining us today who wish to address this committee regarding this hearing and item number nine, that is your opportunity. >> madam chair. we have no speakers seen on public comments. public comment is now closed and colleagues i would like to continue this item to the call chair wait do i file this? no i do continue this to the call chair and a roll call please. >> and on that motion to continue this hearing to the call the chair vice chair dorsey dorsey i remembering

cardio and cardio i church can i can i we have three eyes the motion passes and mr. clerk do you have any other business before us today? and that concludes our business. thank you for the meeting stream >> i used drugs from the age of

15 till 29. i had no friends. i had no family. i wanted to quit because i didn't want to die. since i have been in recovery i could write a novel. i have finished college and held great jobs. by dad was back in my life. [indiscernible] it is never too late to go.

>> shop and dine the 49 promotes local businesses and changes san franciscans to do their shopping and dooipg within the 49 square miles by supporting local services within the neighborhood we help san francisco remain unique, successful and vibrant so where will you shop and dine the 49

>> shop and dine in the 49 promotes local businesses and challenges residents to do their business in the 49 square files of san francisco. we help san francisco remain unique, successful and right vi. so where will you shop and dine in the 49? >> i'm one of three owners here in san francisco and we provide mostly live music entertainment and we have food, the type of food that we have a mexican food and it's not a big menu, but we did it with love. like ribeye tacos and quesadillas and fries. for latinos, it brings families

together and if we can bring that family to your business, you're gold. tonight we have russelling for e community. >> we have a ten-person limb elimination match. we have a full-size ring with barside food and drink. we ended up getting wrestling here with puoillo del mar. we're hope og get families to join us. we've done a drag queen bingo and we're trying to be a diverse kind of club, trying different things. this is a great part of town and there's a bunch of shops, a variety of stores and ethnic restaurants. there's a popular little shop that all of the kids like to

hang out at. we have a great breakfast spot call brick fast at tiffanies. some of the older businesses are refurbished and newer businesses are coming in and it's exciting. >> we even have our own brewery for fdr, ferment, drink repeat. it's in the san francisco garden district and four beautiful murals. >> it's important to shop local because it's kind of like a circle of life, if you will. we hire local people. local people spend their money at our businesses and those local people will spend their money as well. i hope people shop locally. [ ♪♪♪ ]

[music] >> sarah duncan the honeer chef here. alexa and i own this location today. we are wem omen in business. we started this location in san francisco about 5 years ago, and previous--had a kitchen in the back on geneva avenue. we moved over here about two years into that venture and opened this one november of 2019. i grew up in east texas and [indiscernible] bbq venture and wanted to do something different here which is our new orlean style. gentilly is a district in new orlens that remeans we of the excelsior. [indiscernible] i lived out

here for 17 years. alexa also lived in the neighborhood and we wanted to stay in excelsior. we think people enjoy. there isn't a lot ofication food left in the city. there used to be before covid so we wanted to do something the city wasn't already flooded with. gumbo is your traditional style new orleans style stew. we have a nice dark rich broth. pulled chicken, shrimp [indiscernible] the other popular items are fried chicken, a grilled mac and cheese. cajun green beans. number two seller. san francisco is a special city. it got a very big food driven industry. it is very hospitality friendly. i feel like especially in the

restaurant industry, me being a chef it is a pretty male dominant world out there, and i think it is really special the two of us have been able to come together as women and open this restaurant four months to the day before shutdown and keep the doors open still. we put a lot of love into this place. we try to make it feel you are walking into someone's living room where you are comfortable. we are at 482 mission street. welcome to check our lovely environment and have a cocktail morning folks welcome to