so, i'll speak to the general reserve of general fund money, the rainy day reserve which was passed by the charter, in the charter a number of years ago, the budget stabilization reserve which is an additional reserve that was passed by ordinance in a financial policy by the board of supervisors in order to augment the rainy day reserve because it's very unlikely and difficult to withdraw from the rainy day reserve and then we have a couple of incentive reserves, both a citywide one and one specific to the recreation and park department, and then on the expenditure side, there are a number of voter approved expenditure requirements, index to either general fund revenues or other tax revenues or specific service or staffing requirements. with respect to the city's general reserve, it was the reserve policy was passed by the board in april of 2010, and that was subsequent to a charter amendment that we refer to as budget reform that also brought us the two year budget financial policies as well as additional reserves, and the purpose of this general fund reserve is to absorb a year-end r

reserve?it sounds like it's established as you say here to project budget shortfalls along the federal state stimulus funds. after we utilized all of our state and federalstimulus funds ? when do we anticipate those being gone ? >> our latest five year funding forecast boards budget analyst and mayor's budget office was prepared in march projects as we know a modest surplus for the next two fiscal years and then a budget gap beginning in year three and year for. those forecasted shortfalls in the years and four of the forecast are largely due to the fact that it's about that time that we spend it on various federal revenue sources so that's part of what striving. >> what fiscal year is back, is that 2324 2425? >> the two-year surplus we're projecting is for the coming fiscal year 2223 2324. the gas that are protected opened up in 2425. >> so it's then just again to put a fine point on it, it's prudent to keep carrying those dollars forward for the next two years to understand better the next s

most of the commissions when they had a reserve policy, had 10 to 25 percent was set as a reserve amount. and some of them made note that that was a goal, and because they had started with nothing and were trying to work their way up for us it ko actually be the reis reis heser and we have more and it will be working our way down to it and so that will be an impact if we should do this because we will be making sure that we are keeping that money set aside and not spending it, unless there is a direct action with the understanding that they are drawing out of that reserve fund and need to build that fund back up to get it to the proper amount in order to be in that commission's policies should we adopt something today. and one issue that i think that i did find and one of the commissions and i incorporated the language in our, for the purposes of the language, although that you can remove it if you so desire, and one of them, that specifically acknowledged that the staff, when they leave have things that are cost and associated with that, and such as the pay out and the vacation time and

we do have a settlement reserve. those monies are used when the board of supervisors approve the settlement. there is language in that legislation that appropriates a reserve. we do use it over the course of a year but it is proved in a case by case basis. supervisor mirkarimi: where are we in the litigation reserve? >> we face it every year. so, the dollar amount in the litigation reserve is based on consultation with the city attorney an outside auditor as to how much money needs to be set aside. there is a risk analysis that needs to be determined by the city attorney that the accountants take a look at. we budget for an amount that we believe we need to pay out in a given fiscal year. if that money is not used, it is likely they will be needed for the subsequent year. that amount of rolling reserve that is used every year to some extent, it you can find insufficient money in the reserve with a large settlement. we would consider issuing judgment bonds that will allow us to pay overtime. in smaller increments, if

the rainy day reserve require us that we deposit to this reserve when our growth exceeds 5%, that's a lot of money in any given year and 5% of the growth over this value would go into the economic stabilization reserve and a quarter of it, 25% would go into a one-time spending, the remainder could go into the city's general fund. so, it is a very difficult threshold because generally because property taxes are single largest revenue source even in the worst years in this past recession, our property tax, the worst it was, it was a little bit over flat, just a little bit of an increase, less than 1%, but because property taxes is our largest revenue, it's infrequent that our revenues in one year would be less than the actual amount received in the prior year. the budget may drop to 50% of what's left in the rainy day reserve but no more than the shortfall of general day revenue and additional withdrawal allowance to up to 25% of the reserve is -- can be done by the san francisco unified school district and it's based on an inflation adjusted per pupil revenue, so as ms. howard said ear

reserves, the litigation reserve and the -- benefits reserve and we continue to stay to the board of supervisors that there is the potential of reallocation of 3-10 minute dollars in those two reserves based on prior experiences and projections to the best that we know them today. >> thank you. >> supervisor breed? >> supervisor breed: just two quick questions for clarification. i know that there are a lot of different funds and in this particular case is this where reserves are kept for potential litigation? >> to the controller. >> supervisor breed, the two reserves that mr. rose mentioned, one, the litigation reserve to handle comparatively small dollar value settlements. it is historically budgeted around 9 million dollars. we are doing a review of our spending of the 11 1/2 month mark and we do expect to see savings this year in the litigation reserve, and we will provide that to the board on an update to the board later today. the second reserve, the salary and benefits reserve is also reserve budgeted annually by the mayor and the board to account for mou related expenses that

now, moving on to the reserves, contingency reserves, we have the rainy day reserve, which was approved back in november 2003, and in this, deposits were made in years when the general fund growth exceeded 5%. it is nice to think back to that time. it actually rose to be over $100 million before the latest downturn. we project that the general fund revenues will be less than the previous year, and, by the way, this looks at total general fund revenues, not just the discretionary that we looked at in the past, so there is an impact here in terms of what we are able to withdraw, with federal and state, and they also have an impact elsewhere. it triggers a deposit. so under the terms of that reserve, the budget may appropriate up to 50% of the balance but no more than the shortfall compared to the prior year to the general fund of the city and up to 25% to the school district, which is discretionary on the part of the board. the school district does not automatically have the right to withdraw that. that is a decision by the board. the school district actually started to be able to withdra

is a reserve that covers losses that occur in a single fiscal year, stabilization reserves are intended to really help the city through the economic cycles and we have two of these, and former supervisor tom amiano proposed and adopted a rainy day reserve for the city in 2004. and that gets fed with extraordinary revenue growth during the good times and gets drawn on when the revenues decline, and then five years ago we established a secondary stabilization reserve that compliments that which we called, very cleverry the budget stabilization reserve. those two reserves together, get fed during good times and get drawn down by the city to mitigate the cuts in bad times, our current balance between the two reserves, given our audited financial close for the last physical year comes to 192 million dollars, or about 4.8 percent of revenues. and so here are the few of a challenges that we see five years into the new policy, we have two of them. and as it relates to the reserve we think that it is too flexible, once we reach the two percent cap you are required to maintain that two percent ca

how much do we pay the reserves? >> we do not pay the reserves anything. this is strictly a volunteer program giving back to the city. >> commissioner, turman? >> wow. it's an incredible program. i want to thank you first of all for the tremendous service you do for the city and county of san francisco and on a volunteer basis. you are a fabulous human being. thank you for your work. >> thank you for your terrific presentation and informing us on this on this important component of the department and then i would like to also echo commissioner turman's thanks and to put a face behind the presentation. thank you very much. [ applause ] >> so, welcome lieutenant o'connor to the department. it's nice to see the other officer, i don't want to mispronounce your name back there. it's good to see you from coming from this program into full time position with the department. so, welcome to you as well, officer. so, captain, how many people are like officer smothering who transition from the reserves into full time paid positions? is that somewhat of an objective f

the average reserve officer has 7 years, as a reserve our most experienced reserve officer has 21 years and our least has one year.1 year. they speak many languages. the four females are broken down to two chinese, one hispanic, one white. our 22 males are 9 white, 6 asian, 2 middle east earn and japanese. very small cadre of reserves. so who are these people and what do they do? well, i'm proud to announce they are sales managers, security officer, a sheriff, real estate banker, a public outreach coordinator and institution police officer, biotech researcher, oral surgeon, airline pilot, san francisco firefighter, investment banker, electrical supervisor, janitor, and an attorney. we have a wide variety that make-up our reserve officer program. where do they reside? they reside in the greater bay area anywhere from stockton to san mateo to san francisco. there is an organization called the cal reserve peace officer association. in california it had 184 members and down to 5486. many of our reserves are associated with the peace officers association. in terms of deployment, the reserve

that would be my thought on the reserves. so, committee members, we have the release of reserves. is there a motion for anything here? supervisor mirkarimi: yes, i very much agree with much of what she said. i would like to offer a slightly different consideration. i would certainly be amenable to releasing the reserves, but i am not sure that i would want to do all of it. by understand the hectic pace we are confronted by. yet we want the trains to keep rolling forward. if i am not mistaken, there is a report due back in two months or so. and i correct on this? >> per the recommendation of the budget analyst, we would be able to provide the report to you. supervisor mirkarimi: i would be open to releasing half of the reserves today, relatives in condition to that report, let's see the progress of the report. we would then release the remainder on balance. what would that achieve? who knows. we are hoping the desired effect. i think that that might make us feel a little bit better, just about the trajectory we are on right now. and the fact that this is only about obviously until

, and stabilization reserve policies. you may recall the voters adopted initiative about five years ago, whereby the city and the city can adopt the financial policies and the controller proposes policies to the mayor and board of supervisors and the board with the two-thirds adoption and concur ant of the mayor and the policy can go into effect and can only be suspended by the 2 thirds vote for a year at a time. so five years ago, we proposed policies that will be put in place for the reserve structure in the city and we are back for the first time to suggest a modification to them. >> and just as reminder, we really have two types of reserves, in our existing structure. we have contingency reserves and this is intended to cover, unanticipated costs and causes it to increase from what is formally about 25 million up to 2 percent of revenue and at the moment on a schedule. and at the moment we are at 1 and a half percent of revenues, and for the schedule, and pretty existing policy to increase by an additional 2.5 percent

plus the stabilization reserve is no more than 10% of reserves. if or when we are able to reach that level. we do it just for changes in the rates. the results of the rate change are not considered part of the average. there are also a couple of smaller reserves that are written into the charter. there is the budget incentive reserve created some time ago that allows for 25% to be carried forward and used. this is also allowed to be suspended when the controller determines the city's financial condition. it was suspended given the major budget shortfalls, so this has not been a major factor. there is also the recreation and park savings that was written into the charter that says the recreation and parks department gets to keep any savings. it will be dedicated to capital. there was $1.2 million carried forward that was appropriated. from the prior year. as a reminder, we are going to be reviewing them. by the end of march, the five- year financial plan in early may. i would be happy to answer any further questions. supervisor chu: thank you very

with those minimum reserve, so since they are seems to always be a reserve, that exists within the lafco budget. >> there is always been a reserve, probably because the first few years of lafco we got a money from the city and county of san francisco and it sat there being unspent and when i started working for lafco i believe that the reserve was somewhere up to 1 million dollars and we are now down to or we will be at the end of the fiscal here, $300,000, and we are doing it as a way to help the city and county, and many of those years were difficult budget years and we are not going to take any money we will spend ourselves down and every given year, even though we have the fund that will be going away as well, and unless we get an extension of the mou and we are going to get to a point where we don't have any money left in the reserve and so setting up the policy now, will establish and we continue to spend down which is what my goal will be to take the least amount that we need from the city and county until we get the reserve to a respectable level and by setting a policy, we will

or other reserves. what are the risks involved? >> we can provide more information on this. the city does like everyone else, goes through economic cycles, revenue cycles up and cycles down. proposition a and the policy that followed were meant to insulate the city; when times were better more money could be saved.

we do need some funding from the state hospital reserve, from the state budget cut reserve to fund a portion of the supplement. you had a report from the budget analyst. there were recommendations that we agree with. i am certainly available to answer questions you might have. supervisor chu: i understand you are in agreement to reduce the supplemental? >> yes. >> as indicated, we analyze projections and our recommendation is to reduce by $1,560,187. our recommendation is displayed on page 8 of the report, where we recommend that any proposed more -- ordinance, that that be the reduction and because this appropriation does contain general funding reserve monies to fund the this appropriation, we of course have a corresponding recommendation to reduce the amount from the general fund reserve and we recommend that you approved the ordinance as recommended. supervisor chu: thank you for your report. supervisor kim: seeing as we already have $20 million in the reserve, by am curious to rescue what the thinking is in terms of the amount that we like to maintain in the reserve. a reduction

or other reserves. what are the risks involved? >> we can provide more information on this. the city does like everyone else, goes through economic cycles, revenue cycles up and cycles down. proposition a and the policy that followed were meant to insulate the city; when times were better more money could be saved. the city adopted a rainy day reserve in 2004 which provided helpful relief during this period but our analysis at that time indicated that we needed more to avoid really significant service cuts streaming down the economy. we can never predict when that downturn will occur which is part of the challenge frankly a budget revenue projections but we do know that when it does occur, having adequate reserves help

so this document evidences our reserve levels that are over and above the 2 percent required reserve in the budget year of 2015-2016 as well as in the out years 2016-2017 and 2017 and 5 to 6 and following this calculations of the reserve there are explanations as to why and subtion why the district requires having those reserves and we will i'm sure have public comment on this but now go on to the next steps so the states adopted budget all indications that will be signed before the july 1st deadline and staff will analyze the budget when it is signed and determine the impact on the districts own budget and we'll recommend the chances as appropriate we know of one the gap closing percentage that is that revenue will have to be reincluded and another change come is the one time amount that districts will have received as a repayment of the prior years of mandated reimbursements which at the may rice was $681 it is roughly 4 hundred and 31 for 88 so we'll be recalculating those amounts and rearising our budget and the revised final budget in september and due back in other we're closin

reservation. the number of vacancies reported in changes on march 11 was 64 and the number of clients unable to get a reservation was 84. 48% of individuals were able to get a reservation, and 48% were not. six of the seven people surveyed did not answer the question about receiving a reservation. 15 individuals with less than six hours to obtain a reservation. 12 individuals waited more than six hours for their reservation. two of the three locations provided tokens. of the 36 individuals surveyed self-identified as disabled, 38% were unable to get a reservation. the recommendations here are two o do two turn away accounts in a year and compare the data and doing needs assessment. that is so we can get a better idea of how to address the needs. supervisor kim: thank you. just a clarification, when you said on march 11 that there were -- so that night, there were 64 vacant beds and you counted 84 clients that were unable to get a bed reservation. is that what that states? >> yes, that is correct.

reserve would be $7.7 million. supervisor chu: supervisor avalos made a motion to put on to the budget and finance committee reserve, $7.7 million that the preparation for the clean said park bond. we can to grow call on that. >> on that motion, supervisor avalos? >> aye. >> aye. kim? >> aye. >> chu? >> no. >> the motion passes. supervisor chu: on items number three in four is amended, do we have a motion to send this forward as amended? we have a motion to send items three and four ford as amended last week, without objection. thank you. item number seven, please -- item number 8. >> item number 8, resolution authorizing the san francisco unified school district to issue and sale on behalf of its general obligation bond, approved by ed least 55% of the voters that the november 8, 2011 election. are there any other officer of the city and county of san francisco? supervisor chu: thank you very much. supervisor kim: it is my pleasure to sponsor this resolution to authorize sfusd to issue and sell on its behalf. it i

reserve would be $7.7 million. supervisor chu: supervisor avalos made a motion to put on to the budget and finance committee reserve, $7.7 million that the preparation for the clean said park bond. we can to grow call on that. >> on that motion, supervisor avalos? >> aye. >> aye. kim? >> aye. >> chu? >> no. >> the motion passes. supervisor chu: on items number three in fouis

a reserve reserved by the full board of supervisors, a budget and finance reserve. if you released that, your decision would not go to full board. regarding the reallocation for six projects that also would not go to the full board. you are authorized to only the budget and finance committee to release those funds that would be reallocated to six projects. does that respond, supervisor? >> yes, but the reserve was for specific purpose for specific projects. now the reallocations for different project and original purpose -- >> when the board of supervisors previously approved specifically 144 million, it was called a project reserve. in that legislation it stated that that was funded with surplus funds in the water system. in the legislation you approved it stated if other projects have a deficiency in their project budgets, then the p.u.c. can come back and request you reallocate those funds. that is what they are doing they have identified six projects reallocated from surplus funds. as i stated we have reviewed those six projects and believe the documentation tha

the first of the presentations on reserving will talk about the incurred but not reported reserve that each plan that is self-funded or flex-funded has within the system's programs. so incurred but not reported ibnr reserve, estimate of unpaid claim liability for claims where services are incurred on or before a certain date, but not yet paid until after that date. and for the plans we do our calculations on a fiscal year basis, that date is june 30th, the last date of the fiscal year. what i'll be presenting on today are calculations involving claims where services are incurred on or before june 30, 2017, but not paid until and or after july 1, 2017. so if we turn the page you will see the table of our calculations for the recommended ibnr reserve for 2017, june, self-funded or flex-funded. u.h.c. city plan, delta dental of california p.p.o. dental plan for active employee participants and the blue shield of california health plan. in particular, you will see overall a reduction in the projected ibnr reserve of about $1.6 million. and most of that being attributable to the change in t