chair chu: it seems pretty level overall. >> right. chair chu: and then the hetch bar area, that is the area where we are most doubtful. >> right. this is the area we are hoping to grow by 10%. we should mention there are certain things that we pay right off of the top that we do not question. some of its is our ada work, and part of the reason we are doing well is critical. we know we cannot do it without doing a really good job. chair chu: and one last issue, the tax. into what area? >> it is inc. -- well, it would be part of the federal and state dollars. you are talking about the new fee that came from the cta, i can check on that for you. chair chu: it is very little. >> yes, it is only around $2.50 million per year, $2 million. but let me double check. so if we go to the next slide, we talk about some of the revenue constraints and the bond program. et we made a commitment when we first plaque -- passed the capital plan. chair chu: if we do not commit, where does our score fall by the year -- in 10 years? >> i believe it is indy

chair chu: i thought we would have a quick update on revenue numbers for the coming year and then to have lunch into the set- aside policies. >> at your request, madam chair, someone from our office will briefly walk through the presentation we have and provide hopefully some useful background as you begin working through this coming year's budget cycle. a bit of an overview of what revenues make up our budget, how those compared to others, and then get into some of the nuances about the baselines and how our various reserves function. we hope you find this helpful, and i know we are in the process of getting this on the overhead screen as we speak. chair chu: we do have copies, but maybe we can put them somewhere for the public to take, if they like. >> i would just get started. supervisors, i am from the controller's office and the city wide revenue manager, and as requested, we just wanted to give you an overview of some of the revenue sources that are contained in the city budget and then talk a little bit about the set-asides and other restrictions that we have on the use of thos

chair chu: thank you. next speaker. >> good afternoon. i am an executive director in the tenderloin. thank you for your service. i have year on behalf of my organization and the board of directors to fully get behind the effort to deliver a catalytic project for mid market. i do a lot of work. foundations, businesses, property owners, youth groups, and work with. a lot of organizations, i can tell you, have had an interest in setting up shop and locating in mid market, but they are kind of waiting for someone to make a new first move. something inspiring, something that will make people believe, and i think the action you are taking is a brave and bold one and will create a new way of thinking about mid market, and give people confidence in making the investment to come and join. i want to confess, i am not a tech person. i do not have a facebook page. but i do believe that twitter's name will have such a draw and will have a catalytic effect to draw a lot of other companies. i think the people they attract will support all of the mom and

chair chu: thank you. and we should probably have a follow-up conversation with you and the mayor's office about that. >> assessing the possibilities and so on would be great. chair chu: thank you. >> good afternoon, supervisors. my name is gail, and i am representing a collaboration of supportive housing providers here in san francisco and another group. we do not believe the situation this committee is in. we know this is a tough situation for all of us, and we ask you to look at other forms to close that budget gap, but i do think we have a difference of opinion with the director, who we know is not going to make these cuts, but we are here today to say that if the cuts on supportive housing go through, there will be loss of support of housing. supportive housing is more than four walls and a bed. what makes a cost-effective and what makes it a product that is $9,000 per year to house someone versus $18,000 per year when they are on the street is a service package. we have lost over $1 million in fundin

chair chu: ok. supervisor campos. supervisor campos: thank you. through the chair, i know it is tough to finalize the specifics, so i want to keep an open mind. what you're trying to do. i have to begin by questioning the city attorney where they get that definition of materiality, because the resolution that was passed by the board of supervisors does not say that the board delegate the authority to staff to finalize implementation based on o -- an on-balance -- if there is case law that supports the city attorney's position? what is consistent with what i heard from the city attorney's office, so if i can, through the chair, ask what the legal opinion is? >> through the chair, supervisor, the language in question is language that is customarily included in both development agreements and leases, and the traditional interpretation is that you would look at the changes in their totality and not in isolation. supervisor campos: it is very clear that the changes have to be in the best interests of the city and do not increase liabilities, are necessa

chair chu: thank you very much. i think we have gone through the changes that you had indicated pretty exhaustively, so we will skip that. thank you very much for the work on your report. we want to go into public, and so we can make sure we provide for that unit there may be some statements. just one last thing from me from it -- to the city attorney's office. i think people are differing about what is or is not a material change, board members, the city, the court. there are differing conclusions about that. just to clarify, the official conclusion and determination of the city attorney is that it is not a material change. is that correct? is that sort of generally where the city attorney's office is? >> supervisor chu, deputy city attorney. for the negotiators to conclude that there was no material increase in the obligations and liabilities. chair chu: that being said, and still appreciate the opposite of economic and work force development's comments about whether or not there is opportunity to correct some of

thank you. .chair chu: -- chair chu: thank you, supervisor mirkarimi.hink there are some comments that supervisor kim wants to make. i would like to clarify that this is about the buildings, saying that the buildings that we believe will be able to continue to receive tenants, we are going to exempt those buildings from being able to take a bandage of the tax exclusion, so the action would -- to take the advantage

chair chu: thank you. supervisor mirkarimi.ervisor mirkarimi. -- mirkarimi: advancing or perhaps not in bits in this legislation, which is why i hold your opinion with high regard -- or perhaps not advancing this legislation. i do not think this is much debatable in san francisco that enterprise zones do not work well, that they have been inflated in their ability to deliver certain results time after time, and, in fact, there have been some adverse effects. why not a recommendation to just strictly localize it on twitter itself? that is number one. and number two is, has there been a survey done note -- done, especially on buildings most pronounced in their vacancies, it in what they are charging? i'm interested to see what negotiable points where there, if any. i have not been able to get that data. >> supervisor, let me weigh in, if i may, on the first question. i think the first thing to remember, and it was my starting point for analyzing this legislation, is that the bill that is proposed is fairly heterogeneous. mostly l

chair chu: thank you. next speaker, please. >> good afternoon. i am a political action coordinator for a local. i want to tell you first a little bit about me so there is some understanding about hugh seiu is in having this discussion -- about who seiu is. i started a latino co-organizing project for families that has been recognized for its accomplishments multiple times before this board. i worked on affordable housing and for safety in the area. sti you can 21 workers are from mineworkers in the neighborhood. -- seiu 1021 workers are front- line workers in the neighborhood. many of my co-workers are folks also live in sro's and who also have families in the neighborhood, so the idea that there is something else motivating our involvement other than a belief in the public good is really unfair. i also do not appreciate that some of the proponents of this policy came up to me privately during the presentation and basically threatened if we do not back off this deal, they will organize the community to support the measure. i do not think this is

chair chu: there are a lot of facts put out there. the determination from the city attorney's office that the changes were not material or did not really change the obligations of the city -- i am just wanting to know from the port or from the city attorney, what was your process, generally, in terms of determining that? was it simply that the port butt out," here are the changes," and the city attorney said," ok, that looks fine -- that the port put out, "here are the changes," and the city attorney said, "ok, that looks fine." >> they were fantastic. they were all working during this period of time on this effort, and i would say that it was in real time, so as we are considering proposals that they were putting across the table to city staff to try to get us to that place where they would award the bid to san francisco, we tried to evaluate whether or not that change, it taken in the broader context of the changes that we were agreeing to -- whether or not that change, taken in the broader context -- liabilities and obligations. so

thank you. .chair chu: -- chair chu: thank you, supervisor mirkarimi.hink there are some comments that supervisor kim wants to make. i would like to clarify that this is about the buildings, saying that the buildings that we believe will be able to continue to receive tenants, we are going to exempt those buildings from being able to take a bandage of the tax exclusion, so the action would -- to take the advantage of the tax exclusion. correct? ok. supervisor kim? supervisor kim: my apologies. so at this time, i want to take and time -- take some time. i have been in conversations, so there is some time for the board to consider these amendments. i would like to and corporate the amendments that were submitted by our budget analyst that clarified language to ensured that we are giving a tax exemptions for net new jobs in san francisco -- to ensure the we are giving tax exemptions -- that we are giving tax exemptions. one is to take up the language, the 90% employees -- take out the language. and the second is to amend some of the language, to clarify

chair chu: why do we not open it up for public comment? i have only one speaker card, nancy. >> i am nancy -- and i am here to ask the committee to keep the original schedule for voting on the park bond in 2014 as planned. moving the bonds of to 2012 does not allow plans -- time for proper planning and for conducting appropriate outreach and the voting needed to achieve consensus to approve it. the recreation and parks department has not heard much less approved the proposed acceleration it for 2012. such an important policy decision needs much more before changing the timing. this can result in policy delays for some projects, such as requiring full environmental reviews, as in the case with the soccer field. also, recreation and parks has yet to repair the bad feelings they have about their bond renovated clubhouse, which they released out to private entities, or the repair and swimming pools being closed on sunday. why should it take 30 years to fix up places just to be shut out from enjoying the because of privatization? recreation and

chair chu: thank you, thank you, thank you. next speaker, please. the last card that i have is -- and other than that, i do not have any more cards. >> i am here both as a resident in san francisco and as a small- business owner. i am the project director for the company. i am here today on my ever- expanding lunch break, because i have been led to understand that one of the major considerations for the payroll tax break is the opportunity to have twitter in this area, in the central market area. living and working in this neighborhood, i know that there is a need for this board to consider possibilities for rejuvenating the central market area, but the immediate concern that i have is looking at twitter as an opportunity, twitter is a company, like us, capable of paying their payroll tax, and there is no reason i can see to use that as an incentive to move into that neighborhood. they are perfectly capable of being able to do that and being part of the community. chair chu: thank you. >> thank you, supervisors. my name is cooper clinton. there is n

chair chu: thank you, supervisor mirkarimi. supervisor wiener? supervisor wiener: i want to thank supervisor mirkarimi and everyone for coming. i am happy to be here. i do have to leave at 4:30, so i just wanted to make sure you know that. i have been in very close communication with supervisor campos, the department of public health, and lyon-martin, and i will be involved in trying to make sure this clinic survives. chair chu: supervisor mirkarimi, would you like to announce people? supervisor mirkarimi: yes, we have these people. >> i want to thank you all for having this hearing. i think that as supervisor mirkarimi indicated, this is part of our community. thank you. this hearing really provides an opportunity to do a number of things, not only provide the community and the supervisors with a sense of the financial situation that lyon-martin faces, but it is also a opportunity to see how this really has brought a much increased and concerted effort by the board of directors, by the executive administration, by the department, and by the cons

chair chu: thank you, president chiu? do we have a motion to continue this for one week? ok, next week. [gavel] ok, so we are going to take a 15-minute supervisor chu: welcome back to the budget and finance subcommittee. we left off at items four and five. please call items four and five -- actually, just four for now. >> hearing to review the final host city agreement negotiated by the city for consistency with the board's prior approval of said agreement, review of the court plans for tenant relocation and current status of available for properties from a briefing by office of economic and workforce development regarding the implementation plans, and review of stakeholder out beach plan and scoping of the eir required under ceqa. would you like me to read item 5? supervisor chu: just item four for now. this item has been brought to us by supervisor mirkarimi. would you like to make some opening comments? supervisor mirkarimi: sure, thank you. i had requested well over a month ago that the budget analyst follow-through in providing an analysis of any modifications and cha

chair chu: walk me through this. >> sure. chair chu: we withdrew 6.1 for the school district. that leaves us with 33.4. and we anticipate, in the current budget year, should the board approve the school district's request, that would be 8.4 potentially, and do we expect the city to withdraw also or to be in a position to withdraw? >> this is a preliminary number. our current revenue tracking, and we will be coming out with a more formal report in the joint report later this month, so we do not consider this to be the official projection, but based on our current projections, the city would be able to withdraw $16.70 million next year. again, if we increase some projections, say in the property tax or the payroll tax, that number could shrink, or it could increase,this is really a point. supervisor chu: how much did we have in the rainy day fund? >> 116? somewhere around there. supervisor chu: we have significantly drawn down on that reserve. >> we will get to the other reserve that was created last year by unanimous vote. because it allows for 75% to be withdrawn, it allows fo

chair chu: i would like to ask you to adjust the microphone. >> good afternoon. deputy director. just to address supervisor mirkarimi, through the chair, going back to the balancing, to answer that question of the december 14 formula, the agreement as it sort of stood then, the $55 million was sort of a threshold with the board of supervisors at that time, and at the time, both agreements were subject to an 11% of coral, attributed return on that $55 million -- subject to an 11% accrual. it looked like that was superior -- it looks like that was what we believed to be the value of piers 2 -- 30, 32, and this was about an equal balance in. that is what we testified on december 14 -- and that was about an equal balancing. i will go through those components. the basic deal, just to be clear, is $55 million essentially being directly attributable to transfer of the appraised value of one property and piers 30, 32, without something else in that calculation, so i think that is actually pretty favorab

chair chu: that is an excellent question. just to step back, part of what everyone is struggling with, the staff, for staff. this is really a road map and tries to go through many cases depending on level of spending. how much money do we expect to be expanding. it is that point that this is a successor agreement that can be drafted and we have the term sheets in the summer based on those numbers that would leave a great deal of uncertainty. >> but you are operating under a different standard as modified. that standard is the point and the concerns and raised eyebrows as to whether how substantial these changes are. starting from that bracket -- >> given where we are in the process, it is important to note that we have the signed agreement. we have had a number of hearings back through december and november where many of the public concerns have been voiced. some of these contingencies, some of these cases about whether they give back the property or whether certain properties would be in play or not is based upon the investm

i also want to support chair chu's comments. the west side and south side of the city have been terribly underserved in the modernized approach of getting people to really go green in of a way that allows them to find alternative modalities, car share, electric charging, whatever the case may be. i have to tell you, there are wholesale land use changes being considered. in parker said, when i look at that project, -- park merced, when i look at that project, while they are not building parking garages, i would like to see a stepped-up effort from the department of the environment and planning environment. they have diagrammed for us a percentage, when there are these small and large scale developments, that compensate for the fact that there are not garages in these particular areas. that is a level of upgrade that the department of ienvironment can answer. there are areas that are underserved. >> point well taken. certainly, we will increase the efforts and share with you those efforts we are taking to reach out to those areas.

. >> thank you, chair chu, members of the committee. i am the director of budget analysis.m pleased to give this update on the six month report. can we have a laptop on the screen? it is nice to bring a bit of good news in this budget environment. we will see how much more we will be able to get as we go through. our six month report in terms of the bottom line, showed an updated general fund balance of $89.2 million, which is $43 million in improvements from our three month report. if you look at the assumptions the mayor's office had been using in their last shortfall projections, there were already some of these improvements factored into those, so this represents a $14 million improvement from the assumptions in the mayor's office deficit projections, taking into account their midyear savings plans. i want to emphasize as always, with these figures, these are projections and their uncertainty includes basic assumptions about property tax appeals, and there are some of deals. we do our best to predict what is needed in order to have enough money to pay those appeals. we

chair chu: welcome to the reconvening meetings of the board of supervisors subcommittee. mr.

the second piece is what the chair chu asked, some of the revenues in question, in the controller's three month report and revenue letter earlier this year. the biggest one of those is hospital fees, which we had made some assumptions about the level at which we would receive revenue, and also how far back they would apply retroactively now that we have more information about those assumptions. some of the revenues we had budgeted had not come in. so the supplemental of public health will be a combination of those revenues not coming in and some overspending at the hospitals, which is covered by state and federal. supervisor mirkarimi: is health y san francisco part of the dynamic of extending those who can enlist or enroll in the costs that can be cover that may not have been anticipated? >> i do not think in the supplemental, help the sacramento -- help the san francisco -- healthy san francisco, their primary clinics are at the hospital. so of course, all the economics of the health-care system are tied together, but the spending issues at the hospitals are an issue, something that we

chair. supervisor chu: we have a motion, but let me go to supervisor mirkarimi.arimi: i will not be supporting the motion that was just made, but i appreciate the thought behind in the conversation -- behind it. in the conversation that we have just had, they have been very reserved about the candidates that are in play. i asked a question about the drawdown because i think there is a sort of under-assessment. it will apex pretty quickly where there will be a big draw on demands. we're already projecting the question of degrees. if anybody has been watching the budget cycle for the last three years, the mayor had pledged in the budget committee. i remember the famous letter that he signed that there will be a replenishment of the funds after the funds had been essentially pilfered. i wanted to make it clear that now we are at this critical year, that those funds be replenished. it did not equivocate that it was in the public record, they said it did not happen to the degree that it should have based on other capacity needs. with evidence that is not just anecdota