mortgage fraud case brought by the attorney general's office, the district attorney's office, and my office, and we were about to provide the proceeds. that $1.1 million that we will be receiving is our portion of that settlement. supervisor chu: all right, why don't we go to the budget analyst report? >> madam chair and members of the committee, i recommended reductions to the proposed budget as detailed on pages 71 and 72, total $30,212, and of those reductions, that is 100% general fund ongoing reductions come still allow an increase of about $1.8 million or 2.8%, and dept.'s budget. we also recommend closing up $3,876 of prior year general fund incumbrances, and as stated on page 72 of our report, and that is what you were just inquiring about, there is -- actually it is $1,025,000 of revenues, which was based on the state attorney general, the city attorney, and the sand francisco district attorney, who have been litigating this case for several years. as $1,025,000 has not been included in the budget, and therefore, we recommend that you included in the budget. that would result as a general fund savings. i might also point out that you will see the same recommendation tomorrow in the district attorney's budget. it will be a total of $2,050,000 of direct general fund savings. i believe those are the highlights. together, our recommendation would result in $1,134,088 savings for the city general fund. supervisor chu: thank you very much. supervisor wiener: i just want to -- this is for the future -- i do not know if you want to give the city attorney more money because in the future, for better economic times, and of course, i did not have any personal experience of this, but i think that this is through the city attorney and even more so the d.a., that we do not have enough support staff. when i went from private sector to the city attorney's office, one of the biggest shocks for me was particularly the lack of paralegals. i know that the paralegals and support staff generally that i worked with in the city attorney's office -- they were superb, and they worked unbelievably hard because of the -- we just did not have enough, and is more extremely the nba -- the d a's office because there's so few support staff over there, and it does impact once worked as an attorney. and i know that times are tough, but at some point, i hope the office will make an evaluation of perhaps adding some support staff. >> supervisor, i agree with you wholeheartedly. you know better than anybody how hard the support staff in the city attorney's office works, and we would welcome the opportunity to add more people because it is a real drain on the work that attorneys have to do. especially when we are decreasing general fund support. the work that folks are called upon to do, they are called upon to do even more, and it does provide a strain. i welcome those comments, and we are going to do whatever we can in the future. supervisor chu: thank you. thank you, supervisor wiener. the recommendations currently total about $1,130,000. because part of the recommendations would actually be considered an increase in revenue, and that is only something that the mayor's office can do, correct? >> we have discussed this with mr. wagner. this is revenue that we have identified with the city attorney and the district attorney and the board of supervisors is absolutely authorized to place this in the budget. supervisor chu: technically, mr. controller, do you want to answer how we would do this? i think we would accept the $30,000 in recommendations and keep the $1 million to be added back in through an adjustment with the mayor's office? that as a technical matter, that is correct. because additional revenue is needed to grow the size of the budget and the charter only permits the board of supervisors to reallocate what is in the existing size of the proposed budget, mr. wagner would need to move this as a technical adjustment. >> let me just clarify -- we discussed this with mr. wagner. my recommendation to u.s. on this $1 million, this could be considered a savings that the board of supervisors has achieved. it was not identified by anyone until we reported it. and the mayor wants to make a technical adjustment, fine, but i believe that the board of supervisors should get credit for this $1 million. in other words, when you add up your part of total savings, which includes both revenues and expenditures, you should include this in your total amount of savings. supervisor chu: absolutely. and then a question to the mayor's budget office -- >> i could get credit for the end get the support staff that mr. wiener has just identified. supervisor chu: will you be submitting a technical adjustment that would include this increase? >> just to clarify for the budget and legislative analyst, i think the point here is not about credit and who uses it. it is a technical point that the controller raised regarding the ability of the board and the mayor to increase the total size of the budget. and because it is a new revenue, it requires the executive branch to increase the size of the budget. we will certainly be working with you on this and other questions of this nature. i know there are other questions that have come up about encumbrances and increasing the size of the fund balance, so we are here to work with you and the legislative analyst on this issue. supervisor chu: thank you. i want to thank mr. rose for identifying the source of revenue. and if we can do or take the recommendations without objection, and then reserve the $1 million to be added back through a technical adjustment, we can do that without objection? thank you. >> i would gather than that since the budget analyst at my office are in agreement on cuts, there's no need for me to come back for the second hearing, correct? supervisor chu: absolutely. thank you very much. >> thank you. i appreciate it. supervisor chu: ok, our next department is the city administrator. thank you, ms. brown. >> good afternoon. i am happened to be here today as your acting administrator for 2011 and to be presenting to you the ad and services portion of the general services agency budget. the general services agency is a broader array of departments, divisions, offices, and programs. you have heard previously about our capital budget, and you will hear later today separately from the department technology and the department of public works, also part of the gsa. gsa's primary mission is to promote efficient delivery of services, and the majority of services we provide are to support the operations of city government. examples of these functions include maintenance operations and management of city-owned buildings and infrastructure, per german and contract administration, fleet management and vehicle maintenance, real estate leasing and acquisition, city-wide mismanagement, and city-wide capital planning. while i am very proud of the achievements of everyone in the gsa, i did not have time to go through each division to highlight accomplishments in the last year, so i will just touch on a few. in october of 2010, 311 launched a dedicated website with local resources for our veterans, which today has received over 1700's. 311 also began taking after- hours calls for the victim services division in december 2010 so that when people call that number, they no longer have to leave a message. they can talk to a live person, no matter the time of day. in may 2010, 311 also launched the centralized appointments database including legislation sponsored by president chiu to increase access to information about up when it's an opportunity to serve within the city, which we hope will increase participation and diversity on those appointed bodies. in the next few months, 311 will begin taking and tracking calls for the mayor's office of neighborhood services and is currently discussing being able to collect and trap constituent requests to come into board members' offices. both fleet management and real estate launched new software programs. they should improve tracking of needs, planning for expenditures, and work schedules and overall improve the customer experience. and at mosconi center, our convention facilities department is under way with a $56 million capital improvement renovation project in partnership with the tourism improvement district. we expect to spend $15.5 million by the end of the calendar year and another $20 million in the first six months of 2012. i 2012-2013, the project will end and mosconi will resume a full schedule. our overall budget is proposed to increase by $12.4 million or 5.2% over the budget in fiscal year 2010-2011, and our fte headcount is increasing to 638.72 positions, which is about a 3.6% increase. the budget analyst report does a good job of summarizing the reasons for those increases, which are primarily due to two transfers of functions. first is the justice tracking information system, which was transferred by mayor newsom about five months of the appearance that moved into city hall, and the deputy city attorney has assumed oversight of day-to-day operations -- or rather management of that program. eight positions transferred as part of the justice program transferred along with the $2.5 million budget. coming up on july 1, reproduction of mail services will transfer back to gsa, and that will come with 13 additional positions and a budget of $5.5 million. there are additional changes that are highlighted that i am happy to discuss with you if you have questions about them, but those are the major changes to our budget. we are in agreement with one of the budget analyst recommendations and are still discussing the remainder of the recommendations and hope to be able to reach agreement in coming weeks. with that, you saw happen to answer questions. supervisor chu: thank you. a lot of the growth in your department's budget has to do with really the transfer of certain personnel and functions from the department of technology over to your department, correct? >> that is correct. supervisor chu: primarily, it would be repro graphics. and the others the justice program, right? >> that is correct. supervisor chu: just a question for the justice program -- who in administrative services is overseeing the project? >> the deputy city administrators overseeing the day-to-day operations. supervisor chu: i know many of us have questions about the implementation of justice. i know there will be a future hearing about that in a different committee. supervisor chiu: if i could just mentioned, we are requesting a hearing for the seventh of july, and we want to mature everyone is aware of that. supervisor chu: my first question was on the justice program, so i will wait until we hold a hearing on it. the question that i had, and i could not find us in the report, was there was a reduction in neighborhood beautification. that was the one thing that i was curious about. >> that was due to a decrease in the voluntary checkoff donations through payroll and is unfortunate. we were sad to see that as well because that is a program we were very proud of that really leverage as contributions from non-city entities to improve green space and beautify, but we have a as a result of a decrease in his contributions have to cut back a little bit this year. supervisor chu: -- supervisor kim: thank you. supervisor chiu: i want to thank your department for helping to put together the department's's database, and i want to thank you for that, allowing san franciscans to know how they can take part in our city government. one question around grant city arts. i understand there was a decision to not fund the api and queer cultural centers, and i wondered if you could talk about that. >> certainly. thank you. there were several reasons for that. similar to the community challenge grant program. some of the voluntary donations have been reduced. so they had a reduction in the overall amount of money they had to award this year, so they have to look for places where they could make cuts. in applying their funding criteria, which is several fold, they found that both api and queer cultural centers did not meet the criteria fully in a couple of ways. they are receiving funding that is dedicated to cultural centers that goes from grants to the arts to the arts commission and has been distributed to the cultural center, so that funding is still intact, and they are still receiving that. another way is that grants for the arts also tries to leverage the amount of funding that is available -- maybe that is not the right way to describe it. they try to insure that organizations that get funding through grants for the arts are not overly dependent on city funding and have other sources of funding revenue. and they do that, if you look at their website, by having standards of the bigger the organization, the smaller the percentage that they can rely on grants for the arts. i do not, unfortunately, have the percentages in front of me, but when they look at api and queer cultural center, the combined city funding would have put the well over the percentage for funding for grants for the arts, where they are so dependent upon city funding that they did not meet that criteria for grants for the arts. is there anything else to add to that? those were the primary reasons. supervisor chiu: thank you. i may want to have a conversation with you and your staff about this in the future. obviously, these are to be will cultural centers that not only have significant contributions to the city, but because of their history with regard to other centers, i think they can be -- i think they have been challenged in a way they can apply for funding. supervisor chu: thank you. why don't we go to the budget analyst report? >> madam chair and members of the committee, our recommended reductions are shown on pages 77-78. they totaled $380,569, and of that amount, 280,763rd dollars of general fund redemptions, all of which are ongoing. these are reductions that still allow an increase of $12.1 million or 5.1% of the department's 2011-2012 budget. we also recommend closing of prior year incumbrances, which would allow the return of $359,437 to the general fund. in total, these recommendations would result in savings of $740,006. as the department indicated, we are still working with them and will report back to you next week. supervisor chu: thank you very much. if there are no other questions, i can ask ms. brown to follow-up on the outstanding questions, and we look forward to seeing you next week. >> very good. thank you very much. supervisor chu: ok, we have mr. walton from the department of technology. >> good afternoon. john walton, department of technology. briefly, we have a for your slides to go over with you -- we have four slides to go over with you. i brought some hard copy is just in case folks wanted to follow along. briefly jumping into the slide, i wanted to revisit for a moment, we had a lot of conversations around technology in the city. just to remind everyone, to put our department in context, i was listening to the hearings this morning. i was glad to hear, frankly, many of the department's talking about how important technology is to them in delivering their services, how they are looking to improve their technology. our department is making sure -- in charge of making sure there are good data centers and a secure robust network they can run these applications over and police department initiatives together and working with them. right now, we are going through a multi-year process, as you are all aware. a decrease in the size of our apartment. but the good news is that even in the light of decreases in our budget, we still accomplished, i think, a number of incredible things in his last year, and i would like to thank my staff. hopefully, some of them are watching. but the interesting things we have done. we have talked about this before, so i will not revisit them all. this is a partial list, but i think it is good that there's so much energy in the city around technology. there's a lot of enthusiasm, and people are looking to embrace it and do the best they can and do some amazing things with technology in this past year, and i know there are a lot of plans and ideas that coit has endorsed. some of those we talked about at the last hearing we were at, and i appreciate your approval of the five-year plan. when i was here presenting that, we were really talking about what is the role of coit in the overall city i.t. family. even though we're in just one small department, the department of technology is either a leader or a key contributor to eight of the 10 initiatives we talked about in the last one, so we see it as a unique challenge for us. we have a lot of legacy systems we try to support, a lot of operational duties we have. everything from the radios the police officers use to the telephones you use on your desktop at the same time. we are trying to step up, show some leadership, show some initiative, and get some of these more strategic initiatives under way as well and start making progress on those as well appear finally to get what we are really here to talk about today is what we're looking at this year. ms. brown already spoke about the decrease in our budget related to the transfer function around the reproduction in mail services. we are seeing an overall decrease in our budget. that is primarily driven by decreases we have achieved related to project cost and contract costs. i am happy to say that this is the first hearing i can remember that we have gone through this process and move where we have had a multi years of reduction without any staff layoffs. i am glad we have found ways to achieve the savings and retain what i think is an important element in our department, which is the core nucleus of the staff to deliver on this project at the end of the day. having said that, that is all the slides i have, and i welcome any questions. supervisor chu: thank you very much for your presentation. we did just hear the five-year i.t. plan recently, last week. i want to thank you for that presentation. what we go to the budget analyst's recommendation? >> our recommended reductions detail on pages 89 to 92 total $1,416,868. of those reductions, $1,052,369 or 74% of general fund productions, and 1,301,304 are about 91.8% our ongoing reductions. we also recommend closing of prior year and expanded general fund incumbrances, which would allow the return of $2,662 to the general fund here together, these recommendations will result in $1,419,530 in savings to the city, including $1,055,031 to the general fund. we are still working with the department and will report back to you next week. supervisor chu: thank you very much. to be clear, the department is not in agreement with the recommendation? >> we are not in agreement. we are in conversations with the budget analyst. we appreciate their ideas and thoughts, but as i indicated in my presentation, we are keenly aware of having to support the old, which our budget is mainly constructed around, and still move forward with the new. we want to insure that we can make progress on the next initiatives and not put ourselves in a situation from a budget standpoint where we are unable to deliver. supervisor chu: there was a note in the budget analyst report about the seven limited duration positions. can you expand on that? >> we have positions identified in the budget. we have spoken to the budget analyst about it before. our goal would be to fill those positions as soon as possible. we have customers eager to take advantage of the fiber leasing program, and while we appreciate the viewpoint that perhaps money could be saved by delaying the higher those positions, our current positions, we would like to hire them as soon as possible so we can move the project forward. supervisor chu: not to be specific about the recommendation of the timing of hiring, but what would these individuals be doing? >> it would be installing, maintaining, and managing the services starting in july for those customers that would like to procure our -- dark fiber. supervisor chu: so we are -- has coit already approved that? >> they have. we have signed up the first customer, and we are in discussion with several other customers about getting them involved in the program as well. supervisor chu: to follow up on that, given that there is an idea to go forward with a repeat of the dark fiber, was there something anticipated in your budget? >> we had written a memo. first customer we signed up brought $50,000 worth of revenue, and we feel there is significantly more revenue to be had. we are happy to share a copy of the memo with you. supervisor chu: what is in the budget now? >> i did not believe we have put a finalize the number in the budget for the revenue projection for that program yet. i think it is rather a chicken and egg conversation of how fast we could staff at and how soon we get customers on board. supervisor chu: we have the expense in there, and we have not yet budgeted? >> i do not believe we have put a place holder in get -- in yet. >> you have a question about the interim recommendations, and we have recommended that they not be improved in the interim. this is across the board throughout the city unless there is some revenue-generating thing. we are not recommended disapproval of the positions. we're just stating that the position should start at a later time, not on july 1. that is our recommendation to you, and that applies to all departments throughout the city. supervisor chu: thank you. supervisor chiu: just to finish off the conversation on dark fiber, colleagues, you may remember that i had asked the part of technology to really look at this some months back, and i appreciate the work that has been done. i do think that hiring some headcount to bring in additional revenues that should exceed the cost of that is a reduction that makes sense for us, assuming that will be the case, and i assume from mr. walton that it would be. a global question i had, and this is really also to the mayor's office, is i certainly appreciate and support the fact that the department technology's budget has been decreasing for the last few years. i think that is appropriate, given overall city budget cuts. could either of you give me a sense, though, of what is happening to the information technology budgets of other departments? as dt's budget has been increasing, and has put more pressure on your department, particularly at a time when we are trying to centralize i.t. i think it is important that other departments around the city are sharing in that cause inherited. >> absolutely. there are a number of things going on in the budget to reflect on, discussions that we and you have had. a couple of kind of immediate issues related to the data center consolidation, we have, as approved in the plan that was adopted by coit, budgeted some savings in the budget to reflect the projected savings associated with the data center consolidation. the estimated savings were due to staffing efficiencies and