Transcripts For SFGTV BOS Budget And Finance Committee 3917 20170312

Bust in the 2000s and the recession in the 200810 period but the projection is the dotted line one of moderated and Slower Growth in the forecast. Thank you. I just want to underscore what the controller said and its my struggle to explain this to the public but having revenue not growing as fast in the past is a big problem for me and us because every year the budget has been balanced and revenue helped us do that and why i am feeling less confident than a month ago which i mentioned that and we will talk about with the five year plan so the plan we put out in the fall and high level overview and this plan shows revenue will grow by 560 million in the fiscal year and the expenditures will grow as listed here and this is the challenge. Its not that we have dont have revenue growing but our expenses are growing more quickly. When you say the expenses are projected to grow and can you highlight which expenses . There are assumptions i am making and health care. Youre total right. You can see the largest category is 700 million of salaries and benefits of the employees and the largest driver we make an assumption in the report we will increase Consumer Price index growth and 3 every year so what this says to me chair cohen not that we cant grow but not that quickly and about 440 of the 700 is just the cpi assumption and the next largest number is what you said Health Benefits and growing on the order of eight, 9 a year, much faster than inflation and after that is pension so all of the things combined are really driving this. The first thing was we assume that salaries and benefits will go up by the Consumer Price index, inflation. I want to summarize and Salary Benefits and health care and pension are the top three drives forces. Behind salaries and benefits and 50 of of the overall growth here. Thank you. Yeah. And within citywide operating i would say also inflation on our cbo contracts and non personal costs and departments and capital plan and other planses seven and 10 growth so some of the growth is much faster than the revenues are growing. So all of that and im going to go quickly through the next slides and go into more detail and theres a graphic representation of that and goes into detail on that growth. This slide, slide 12 i will spend a moment on because i think its useful. It basically shows that the black line is the Revenue Growth and says that the dark blue area and the area on top if we just took the employees salaries and benefits and pension and set asides and minimum wage that voter adopted and take up 84 of the projected Revenue Growth so that says we have growth and we made policy choices to spend all of that and its important and something i have been talking about with the mayor. So next slide 13 i will spend a moment on this and go quickly why its happening and at high level were seeing the project the deficits and going down for years and the first five year Financial Plan in may 2011 and the fifth year showed we had deficit of 800 plus million in the last year of the plan and by december 2014 we were actually showing almost half of that in the fifth year we made progress on the structural and the problem between the revenues and expenditures we made progress closing that gap and two years later its popped up again where the fifth year of the plan shows over 800 million and concerning to us when we realized this and we spent a lot of time thinking about why, and the biggest reasons are rising employee costs which is relate to the pension and this is a little different than what i was talking about and pension is the number one driver yet deficits have gone up over time and new bases and set asides and new ongoing obligations and add staff and Health Benefits and pension is growing faster than inflation and the obligations are growing faster than the revenue. A question on slide 14 new baseline and set asides. Yeah. We had a hearing on dignity fund and a set aside and one with rec and park the Previous Year if i am not mistaken we have the slide. If you look at slide 19 and show you all the ones adopted since 2011 so there are others that are off the page detailed in the five year plan these are the new ones and add 2d hundred mill 200 million in those and were doing this before having the revenue and what it says to me. Okay thank you. And the controller will talk about pension. Yes. Just very briefly and we talked about before and we will talk about it again. One of the most notable things in the forecast in november 2 years prior how different the pension and costs look the dark gray line are the projections what we thought would happen two years ago when the forecast was formally adopted by the board and pension and expected when the benefit changed voted by the voters and proposition c took shape and the loss from the last stock market crash took hold and would do that over time. We had setbacks over the years and the forecast has reversed and now talking about not insignificant increases looking ahead over the forecast. The space where we were and where we are today is 170 million in terms of the difference between the lines of the fourth year of the forecast and another way to conceptualize thats almost the equivalent of giving all city workers a 9 raise. Its a significant cast variance and really why . Almost in equal parts the drivers are these three and number one and good news for the retirees and employees. Theyre living longer as is the case everywhere in the nation which also means financially they earn pension benefits for longer and drives up the citys pensions cost. The pension fund is it fully funded . The pension fund is doing better than almost all but not fully funded so its approximately 80 funded which we want to be at 100 but frankly better than most in the country. As the president of the retirement board i am sure you understand that. Very good. You passed. The second is that the city one of the key provisions in proposition c that the voters adopted was a requirement that supplemental colas be paid to retirees when the pension fund was fully funded. The courts partially struck that change down and ruled it was not legal for the voters to take that benefit away from a group of retirees and they earn that benefit and costs more and lastly we had a couple of years that the rate of return which we count on to make the actual math is worth and less than when it said at 7 and in equal parts and the reversal of trend and now seeing rising costs. Thank you. Okay. Im going to go through some of the next slides. On slide 20 the only thing i would note its similar to baselines and set asides for me and details the staff we add over the last five years so over the 20 years you see a boom and bust cycle and add and cut and add and cut and it goes up and down and we have add 5,000 and not just for wonderful things and the largest chunk, the blue chunk is enterprise departments and the 10 increase at mta, the Public Utilities commission, the airport and Public Health and Affordable Care act roll out, opening a new hospital. The yellow is Public Protection and Police Officers and time response up at the Fire Department and act act and hhs and new Homeless Department adding social Services Culture and recreation and even other. There is street cleaning and more people in parks. There are many things we did and just like the baselines and set asides not bad to spend money on but we made the decisions and were at a moment to be thoughtful to add anything else and the worse case for the city and the residents and we add things and one year later we have to cut them and were mindful of that now and we had a lot of growth in the last few years, so the next thing is im going to actually go over quickly but the five year Financial Plan has the mayor propose fiscal strategies to balance the budget and equal share across categories and reduce salary and benefit costs and reduce citywide expenditures, ask target departments every year and try to continue our economy to see better than expected revenue and or go after new revenue on the ballot and those are combined how we could bring them in line. Slide 23 will show budget instructions to departments so i think youre familiar with this but as a reminder we ask departments to propose target of year one of 3 and six in year two and received submission on the 21st and many met the target and the instruction dont grow the fte account based what i mentioned and the growth in the last years and some departments complied and some did not and we sent an email and going to strip out the ftes and were working on that now. For the next months were going to review all of the submission what we got from people and what we propose things to you its a reflection of what the mayor wants in the budget and theres a lot of work that goes into is that and for the rest of the presentation i will turn it over to the controleer. Very briefly one of the things that the five year forecast contains is an estimate of what happened help if and when a recession comes. We have been doing this for the last couple of cycles to give a shout how it would look like and reflect the financial outlook. This chart shows the length of economic expansions in the u. S. Since 1900 and i believe there are 23 expansionos the chart and were the top one and the point is were well pass the period of between recessions in the u. S. And if we were actually to go through the five year forecast period without experiencing recession it would be the by far longest expansion in modern u. S. History and its worth planning for its not likely to occur and likely to see a recession in the country and the city. If we see one how does it change the forecast . Significantly. If we look at the next couple of recessions and how it affects our Revenue Streams here in the city, hotel, property sales, et cetera this is what it would look like. Revenues rather than growing consistently would dip before recovering back by several years later. Obviously every recession is different but this is really a blend of the last two and the difference in forecasted revenue between that five year forecast is bottom a billion dollars so a recession changes the outcome quickly and fundamentally. The city is in better place and the reserves are in a better place and one time programs that have been funded for one time purposes leave us in better position for this but its significant exposure and not sufficient to cover the gap. We provided as the chair mentioned we provided our six month update on the citys Financial Condition a couple of months ago. I wont go into that but the good news in the current here was over 50 million. If that 50 million in the current year applied to the deficit it brings it down to 340 million in the next twoyear period short fall and thats the most fundamental change since we issued the forecast in november. A lot of uncertainty still exists and the mayors budget director talked about this, but things we are watching in the current year heading into the next forecast in march the pace of Economic Growth in the city and particular Revenue Streams in particular. Property transfer tax and business and hotel tax are diverging at the moment. Can you elaborate on that because thats what i get questioned from the Business Community and they feel over taxed and theyre contributing. I believe the property transfer tax has been a significant bump because of the economy so good [inaudible] are bought and sold and the hotel tax and its decreasing and i understand it to be decreasing largely because moscone is under renovation when will it be done and renovated . Good questions. We have two Revenue Streams in the current year and one paced on Property Value in the city are continuing to perform well. Property tax continues to improve assessor is working through a backlog of the assessments and changes in ownership and construction in the receipt period so the property tax rolls are growing and the property theyre growing because were building more units on the market [inaudible] and commercial property is changing hands as well and under prop 13 thats when theyre assessed and the more they change hands the more theyre assessed and all of those things together youre right madam growth, all contribute to this. The one time tax and driven by high hand commercial property worn more than 25 million. The voters adopted another rate increase on that tier of transactions but absent that increase we would see high transfer tax in the current year. In the month of december we received more transfer tax than the entirety of the fiscal 910 to give you a sense how strong it has been in the current year. Supervisor peskin introduced legislation if i am not mistaken i believe excuse me, he introduced a resolution to do what exactly . Sure. We have limitations that the state imposes on what taxes we can have here in the city and county of San Francisco. Two of the taxes not allowed to adopt that only the state the state reserves that right is a personal income tax and a corporate next tax so theyre both taxes that the state assesses on everyone that lives and works in california and that revenue occurs to the state and the state has preempted locals and you cant have that tax structure so we have a property tax that gets to individuals and businesses and a business tax structure, not based on their income but rather on their receipts so not their bottom line but their top line, how much money goes in the door opposed to coma they make and with this tax structure. What the supervisor introduced is like l. A. And charge a personal income tax in San Francisco and would have to be approved by the voters and the discretion of the voters and the mayor and the board could be programmed for new service or new revenue or used to restructure our tax base and eliminate another tax that we currently have in our portfolio. Okay. Lastly you asked about hotel tax madam chair. I did. Yeah, we have seen an unbelievable ride on hotel tax in the last years. Last fiscal year was a new record high for hotel tax in the city and occupancy rates in the city well north of 80 and considered full occupancy for hotels and room rates rising to record levels and obviously our tax is assess said on the revenue theyre receiving so good news for us. In the current were we are seeing the rates high but room rates are declining a bit and a number of factor thats contribute to this but youre right the single most important the construction around the Moscone Center and fewer large convention bookings in the current year and has the effect of not having the short period where convention demand drive prices through the roof so we had softening on rates in the current here. Not a lot. Its down 2 versus the prior year but significant were growing at 7 10 for serf years to see that is shocking. One of the arguments the advocates against Short Term Rentals and have adverse impact on the hotel tax fee that the city would normally be collecting. You have seen any kind of a correlation . We have more short term rental hosts coming on line and getting a balance license . I know theyre paying a tax. Is it balancing or are we coming out short or too soon to make a conclusion . We havent looked at it in great detail so i wouldnt want to comment but its still a comparatively smart part of the picture. Hotel tax as a whole is 500 million in the city. Short term rental the hotel tax attributable to short term rental and 5 of the whole so i dont there is impacts on them and vice versa but at the moment its on the margin of things opposed to fundamentally changing our revenue picture. We are expecting that the Moscone Center is closed for a year and see a bounce back in a couple of years when it resumes and they have a heavily booked Convention Year a couple of years out. Were revising that now as we work on the latest projections but anyway what is going on with the economy is always a key driver of the outlook and its a particularly in flux at the moment. The other significant uncertainties that melissa mentioned earlier are state and federal revenues. About 1 dollar out of five that comes into the general fund originates from the state or the fuds so were dependent particularly as a county providing social services and Health Services what we receive from dc and sacramento. The governor on the state side release a budget that will be reviseed in may and includes a significant cost shift. You heard about this in your hearing this morning of ihsss cost back to county and if its ultimately adopted by the luther and cost 50 million to San Francisco annually and significant item in the budget. The january budget is a rough blueprint and revise in may and that may change and we will be watching that and we have risks from the state and of course the most significant is the federal government. The projected amount of federal cuts is 50 million . 500 million . What is it . We dont know yet and actually you will have a hearing in two weeks, a joint hearing of the Budget Committee and the federal select committee of the board of supervisors and we will provide you with the last est information but the biggest problem with the federal picture there is no certainty. We receive about our budget contains about 1. 2 billion that originate with the feds, the total city budget. We have a president that has indicated high intends to cut off all federal funds to sanctuary cities. If you take that on its face we would lose 1. 2 billion. Of course as the City Attorney a asserted we dont believe that is legal and the ultimate risk from a sanctuary city is much lower but we dont our hands around that. Thank you. I would like to pivot to the deputy City Attorney that the filings that were filed by the City Attorney. Deputy City Attorney john gibner. We filed a motion for preliminary injunchdz in that case. As you know we filed a complaint and amend the complaint and updated version of the complaint and maybe a week, two ago and yesterday i filed a motion for preliminary injunction basically asking the court to issue an order in joining the application of the executive order to the city. That motion is now pending. So which court are you pet igdzing . Is this the ninth Circuit Court . Its the District Court for the Northern District of california and the Trial Court Level in the federal system in our jurisdiction. The ninth circuit is the Appellate Court and any appeals from a federal Court Decision go to them. Thank you. I appreciate that update. We will be looking for more updates as news comes out. Of course the saimplg sanctuary city threat from the president isnt the only risk. The repeal of the Affordable Care act is incredibly important to the health department. About 15 of san franciscans picked up insurance or have it subsidized because of the 3r78 and has implications for the largest our departments and Public Health and improved the health of the health department. The repeal of the Affordable Care act will matter financially as well and we dont know what will come and when . We dont know when. Were sitting down and waiting. What if it doesnt come this year and get through the budget process and for the next two years and then comes next year . Is that a possibility . Its a possibility. You will hear an update on the Affordable Care act. The bill in congress and the majority would go into effect 20 between the. Okay. But there are shorter temp implications and i dont think fundally people believe its the bill that would be adopted and thirchls are changing and were keeping our eyes on it and seements like the risk is not right away but a couple years out. All right. I guess thats a little comforting. Yeah. And the other one is just the federal budget as a whole which funds grants and programs in the city, about 200 million whether cdbg funds or health grants or a vast array of other service and particular in health and human serviceses that originate with the feds. We will see details of the president s budget start to emerging increasing detailed form in the coming months. If i am not mistaken i had a meeting not too long ago the director of hsa and we could potentially looking at 500 million worth of can you tell us when you consider all the federal dollars and impact our programs so to you say 20,000 that sounds conservative. 200 million, sorry. I thought you said if i did i misspoke. Maybe i misheard. I think the point at the moment we really have at this point we have a lot of risks but not a lot of specific proposals and say thats would cost us and thats what it means and more threats and ominous clouds on the horizon. As we know more over the months we will report back to you here and hope to have more clarity regarding exactly the federal government is going to do. Its a significant portion of the City Attorney requests for injunction in this case relates to the fact of the uncertainty itself creates problems for us in terms how we approach our budget. Even before we get specific cuts. So a long winded way of saying we have a lot more uncertainty at this moment than the last budget cycles. Lastly just to catch you up what to come we will update the committee on revised forecast and the three financial offices and the Mayors Office and your budget analyst are working now on updated projection and hope to have done by the end of march but likely march 2225 what thal update the numbers with current information. Our office will review how the city is spending in the nine month report and issue that in early may and then that will all be in advance of course of the submission of a budget from the mayor to the board of supervisors as required by the ad min code on june 1 so much more to come but this is the lay of the land as we know it today. Thank you for your presentation, both of you. I appreciate it. Colleagues any questions for our experts . Supervisor sheehy. Yes. So i wanted to look at the pension assumptions at seven and a half percent so we havent been making that i am guessing so what are we been running on that . Im sorry i couldnt hear. One of the reasons for the short fall there is a rate of return for less than seven and a half percent for Pension Investments so what has been the rate of return in recent years . And have the recent rises in investments that we have seen since the beginning of the year how does it impact that . And to what degree is it impacted by underlying Interest Rates set by the fed . Yeah, great questions. If we look back over the last ten, 20, 30 and 40 years during those periods of time our investment returns for the pension fund beat that seven and a half percent and seems a reason assumption and some are turning down in the assumptions when looking ahead and with the state of california calpers have reduced rate Going Forward to seven and you have seen plans lower than that but were at the median if you look at Pension Plans of any size and 50 in terms of this assumption. The last couple of years meaning last year and the year before we saw as i recall we didnt have losses but we had very low gains in the pension funds. Growth of one half a percent, one, 2 and still growth but short of the assumption and thats the problem here. Its not that the pension fund didnt return growth but not at the level we were counting on. In the current year youre right. Pension returns in the current year are better than expecting expected and trend to beat the current year but with a lot of time left an interesting thing about the way this math works its really a snapshot on one day, june 30, on where the pension fund is on that day, and what happens in a week can really influence that number which unfortunately what we saw last year and brexit occurred the week before and the markets tanked for a week and they bounced back a week later but were trending better than the assumption in the current year. So how is inflation built into that and we had low inflation in the past years and is this seven and a half percent rate based on inflation and is it post inflation or flat return . And given where were going should we expect seems like were returning to normal rates of inflation and Interest Rates from the fed. Its a result of a Detailed Analysis performed by the retirement system by a number of factors looking ahead into the future and includes estimates of inflation but youre right. As inflation rises it will impact the returns in the fund both good and bad ways and part is real estate and equities and reach will behave different in the environment. Does that make sense . I am curious what role does the inflation rate play . And the seven and a half percent is that rate and not normal rate if we return to normal rates that would in itself have an impact . Correct. And relatively Safe Environments to meet the return. [inaudible] as inflation grows. So might have be due to [inaudible] yeah, period of relatively rare. Im not the expert here but i think youre right. All right. Any other colleagues to ask questions . No. Thank you very much for your presentation. We look forward to hearing more from you. Lets go ahead and take Public Comment. Seeing theres no Public Comment we will close Public Comment. [gavel] all right. Is there a motion . I will make a motion to continue the call to the chair. Okay. Take that without objection. Excuse me. Is there a second since its a five member body . Yes supervisor yee and supervisor tang. Madam clerk is there any further business before this body . No. All right. Ladies and gentlemen we are adjourned thank you very much. [gavel] i didnt o sound familiar do you keep on getting up theres an easier way. Of course theres easier way get rid of of mosquito they breed whatever this is water no water no i want to thank all of you for joining us on this web San Francisco date. We are thrilled to be here and howevereven though its wet outside the sun is definitely shining in this room. Our announcement today will lead to brighter futures for our students at city college. Todays announcement is the first in the nation and led by our great city. And most of the cases [inaudible] commitments to support tuition for students across their state we hope one day our entire state will do what we are doing here in San Francisco and the commitments were about to make today. As Vice President of the board of education i know the important value of city college attentively for the thousands of students that you want from our San Francisco Unified School District into city college and graduate and has the mayor Senior Advisor i know firsthand how passionate the mayor is about providing access and opportunities for all our youth. Particularly, as it relates to educational outcomes that will lead to a degree or a certificate and improve their future earning potential. I see daily his dedication to develop a strong workforce in my city coach is so important to him and to our city. So this time fees, join me in welcoming our mayor, mayor ed lee. The clapping [applause] thank you thank you hydra and i want to welcome each and every one of our supervisors that are here today are board of supervisors. I know the join me in the trustees of our Community College in this, i think lifechanging milestone for our city called but particularly, for california residents who live in San Francisco need [inaudible] these days. Let me first and foremost thanks supervisor jane kim. I know that [applause] she has been championing a way for whether it was though valid to looking at increased revenues. Worked with my staff and i think she said a few weeks ago that she really liked working with hydra so i told [inaudible] and quite frankly they did. I am delighted that supervisor kim has been working closely with hydra on this working group that represented aft, the federation of teachers as well as the chancellor, chancellor lamb and the board of trustees and of course as i mentioned earlier the supervisors [inaudible] who really wanted to see something happen in the city. Something bold, visionary, and we have done so with the collaboration that we have. Let me tell you, when [inaudible] works together we can accomplish great things. We are going to need that spirit as we face challenges on the regional front, certainly, on the national front. But this is one thing that we do well when we come together is we work for each other and we do bold things. Let me harking you back to a time when Community Colleges were established back in 1960s. It was told to us the promise to the state was that they will be part of the great Public Education system that we now enjoy, that we still enjoy, in San Francisco. Somehow decades after that we seem to have [inaudible] with one crisis after another. Welcome we have come back to accomplish what i was like to say, not making new promises, but accomplishing the old ones with people who understand the mission of our Community Colleges in our Public Education. I know that supervisor kim it understands that. She obviously has worked very well at the school board for many years and she has continued her commitment to her work as a supervisor and now that we have this we can say to california residents who are living in San Francisco, you are Community College is now free and quality. Yes. [applause] it is bold to say that because no other city in the great state of california can actually say that. Not only say it, but mean its because i want to make sure that this free tuition complements the accreditation overcome that the Community College has accomplished [inaudible] that was a wonderful thing for us as a city to come together as well. In addition, we never do things in one dimension. We also say who else do we need to help . And we have taken a look and this is where a lot of the internal discussion had to happen. This is where hydra and supervisor kim and others aft, had to also make sure that we do it economically sustainable approach particularly, for those students that are most in need. We were able to figure out to a grants program for those students that receive the board of governors waiver that they will get at least a 500 per year support for books, for fees, for transportation costs. Things that are really costing students and adding to their debt and we want our students to be debt free could we actually want him to get the best jobs this region can provide, and so that was helpful. Thats really focused on fulltime students but we also had in mind to help those that are struggling as parttime. That maybe they will have a path forward to be fulltime judge maybe they will be able to get their diplomas and certificates because as parttime students, may also have a need and we will Grant Program that will support them as well. The combined with the Grant Programs, combined with a free tuition, combined with accreditation we have a big old story to tell about what people can do when they come together here in San Francisco, and i want to thank not just hydra and supervisor kim and chancellor lim in the board of trustees, but they wouldnt be able to do it without the publics knowledge that we embrace our Public Education. Its not just education for education sake. Because the work ahead of us is not just reduced debt. Its to get people their hopes and dreams. Because when people go and educate themselves as most College Students do, here, they want a good job and a career. That may be sometimes of two teachers they should never work in a vacuum. Students, they shouldnt be studying in a vacuum. It should be about an entire community of people who support the goals of education. That is to get good careers. So we have our work cut out to get not just because weve done this foundational work of being a good bold vision for Public Education. We have work to do to expect people to do great jobs the jobs they can afford for their families on a whole families, to move forward together. I know a lot of people are dependent upon our city college. I know that combined this will really have great news for our city college for generations to come and i know that they will do really good because behind them will also be a lot of businesses and government want that talent to come through our city colleges. So congratulations everybody and again thank you supervisor kim for working so closely with us. [applause] thank you mr. Maher could i want to thank you for giving us the time to dive deeper into developing this plan and engaging the supervisors, your department, your Budget Office in these discussions could i just want to publicly acknowledge the great work in support of our budget director Melissa White house. And her budget lead chris will yell and ill sort of thing controller and rosenfield and his lead. For their collaboration. Those were really team members. To our conversation. [applause] for four years, served sidebyside with our next speaker could we Team Together as the president and Vice President of the board at one point before she took unresponsive though to of representing district 6. When it comes to education supervisor kim goes beyond her district good looks at the Bigger Picture and knows the role education plays in getting many of our students often first in their family, and low income, to rise. These, join me in welcoming supervisor jane kim. [applause] thank you hydra commissioner mendoza also our board of education. It is so exciting to be here today. Almost a year after we initially began this process. We hardly said before and ill say it again there used to be a time whenthat many good paying jobs only required a High School Diploma. That this diploma was enough to get most americans an opportunity to my a chance, to enter into our middle class. That is why government in the 20th century made this incredibly expensive investment in our Human Capital by [inaudible] in a universal and free k12 Education System. [applause] that is something to applaud. But we know that times are changing and Research Shows that by 20 2070 of all jobs created here in the United States will require some type of post secondary degree, training, or certificate. 70 . Politicians are taking note throughout the country. In 2015 president obama made an announcement proposing a plan to make Community College free for all americans for two years. We have seen that states like oregon on minnesota tennessee kentucky, have implemented some type of program encouraging more individuals and High School Students to sign up for Community College. But what i am most excited that we are announcing here today in San Francisco the city of many first, is that we will be the first city in the nation to make Community College free again for all of our residents. [applause] we know that the elephant and the policy realm of cities across the country is our plumbing income and wealth gap. Here in San Francisco, according to the brookings institute, we have the Fastest Growing income gap of any city across the nation. Over four years ago, it used to be that americans and the middle class outnumbered those that were in the upper income and lower income brackets of our country. Today that is no longer true. We as politicians, as policymakers, are responsible for these trying to reverse the trends and one of the best ways that we can do that is by investing in our citizens and investing in their education, and raising their likelihood of succeeding in the bay area region. So this making City College Free, is going to provide greater opportunities for more san franciscans to enter into the middle class and more san franciscans to stay in the middle class if they currently are. In fact the data shows if you have an Associates Degree from city college you are an average likely to make 11,000 more than the same individual with just a High School Diploma. That is almost 1000 more a month. It is great and important to build affordable and middle Income Housing but lets also put more money in the pockets of everyday san franciscans. We can do that by partnering with the great institutions at city college of San Francisco and i want to acknowledge chancellor lamb and her staff for working with us these last april on helping to form late to plan. I want to give a big big big shout out to the San Francisco Labor Council, connie for the Vice President is here today along with kim paulsen the president and of course, this would not have happened without aft 2121 a president [applause] and our political director alisa messer. [applause] they were important components of this program because when our office began rain storming and drafting an increase in the real estate transfer tax here in San Francisco acknowledging that the luxury market was really impacting everyday san franciscans get we actually did not know how to best spend down those and what was the best way to invest [inaudible] coming from the luxury building and housing market. [inaudible] the Labor Council and aft 2121 came to us and said lets make City College Free again. And when they first approach me i thought, wow this is really ambitious but i dont know if we are going to make this happen. If not for all the data and work that had been collected over the last year to Labor Council aft 2121 and the city College Administration there is no way that we would be here today announcing this Amazing Program and we are absolutely making City College Free for all san franciscans residence. [applause] this initiative will assist roughly 30,000 students that we know are san franciscans enrolled in city college today taking a critical is at minimum and we are also anticipating and thanks to the Mayors Office to their proposalanticipating growth as well. So i want to thank the mayor personally and hydra mendoza. From working with us to get the right numbers and also making sure that we put in a cushion to both encourage more residents to take a credit course at city college but also to ensure that we can welcome them all in as the city College Enrollment grows. So thank you so much for committing not just picking city college freight but also to committing to the growth. Thank you very much. [applause] so finally, i just want to recognize the City College Board of trustees for us here to fit in with us since the very beginning of last year president rafael minimum and current president the slb trustees i can do as a candidate campaigned on proposition w pussy out randolph Owner Community coach residence im sorry students who campaigned on the trail thank you all so much. We could not have done that without your leadership and trustee john rizzo was in the back row so i could not see you [laughing] he spoke at many of our press conferences. Icr board of supervisors here when my cosponsors on the supplemental and proposition w erin peskin, thank you. Two supervisors ronen safai and in december after they gotafter their elections were not sworn in butofficial, immediately committed you are vote to making City College Free. Thank you all so much for working so closely with our office and im sorry, supervisor sheehy. They do also much that theres a lot of think used to be had but i think the biggest thing is that in august follow 2017 hopefully, by this thursday we will be able to announce all students will be able to attend city college for free again. I am just going in a time when theres so much darkness and disappointment and fear and anxiety throughout the country, as we see leadership in the white house that is promoting exclusivity, that is not promoting inclusive society, that is in fact trying to divest from the citizens of the United States, we here in San Francisco can be a beacon for the rest of the country and say, in despite of that we can be the light and we can provide a greater investment to our residents and the we are absolutely committed to growing our middle class here in San Francisco. Thank you very much. [applause] i miss working on policy projects with you, jane but dont get any ideas mr. Mayor. I like this particular project. I want to thank supervisor kim. I also want to appreciate your openness and working closely with the mayor to arrive at this well crafted program that accomplishes both of your goals. Both the goals you both had and the commitment made to the stakeholders in the community. I also want to thank ivy league at your office. [applause] for all of her engagement and her hard work and the role she played in getting us on the same page. Over the last year and a half, interim chancellor steve and susan lamb has stepped up and focused all her energy to ensure that city college is open and accredited and she has accomplished that. [applause] on january 13 we also rated the news that their accreditation is reaffirmed and we can now focus on building up enrollment and supporting her to run a great Community College. We didnt give susan much time to revel in the news before engaging her more deeply in this plan. So, please join me in welcoming our interim chancellor, susan lamb. [applause] i hate to say but i think the previous speaker said at all. I almost want to just say, did oh but i would be the correct though if i didnt say i want to say thank you as a singer thanks to the mayor for putting this city forward in a place where it does have a promise of Free Education for the citizens of this city. And the work of supervisor kim, who has worked tirelessly over the last year of moving this forward engaging in the conversations and making this a reality. And the conversations with the board of trustees, of making this a citywide commitment to truly educate every citizen of San Francisco. This will be going to the Community College board of trustees. This thursday. We are very excited about this opportunity. I know people have mentioned this as an opportunity for us to grow and in some ways, it is. But i dont think that is the primary reason for this. The primary reason is so that every person in the city has an opportunity. There arent just in Educational Opportunity but an opportunity for their families, for their work, for improvement so that social economically they can get to a better place, so that that impacts them and their families in a positive way. , when we look at thewhen we look at our next generation coming up today, the students that are in San Francisco unified, the most likely indicator of whether they will go on to college is whether one of their parents went to college. So when we look at not just the people that are enrolled today but the people that are enrolled tomorrow this is probably one of the biggest factors that will determine not just the educational future of the city, but also the Economic Future of this city. So i want to get profound thanks once again to the mayor them onto the supervisor, the board of trustees, aft 2121 that continued to drive this forward with their leadership and look to it to a positive thing for our city, for our students, and for all of us. So just want to say thank you on behalf of the college. City college, i am so proud and so honored just to be a part of it. Thank you. [applause] thank you so much chancellor lamb. I want to welcome pres. Breed who is just joint thank you so much for being here for supporting these efforts as well. Supervisor breed. I want to thank you chancellor lamb. I know we often times but you between a rock and a hard place but you we argued we fussed, we have not shared pleasant thoughts andbut overall, it wasno, it was all great. We got exactly what wanted to get accomplished and i know you are [laughing] i know this. You bring was just for the students and i really really appreciate that. I also think your cfo ron gearhart who [applause] there was a point where susan were not allowed to talk to him because he been said that you want to protect him and so she said you can call me and i will talk to ron and we were able to work all that out but he worked tirelessly to ensure the numbers and the forms that we used to develop the program are accurate. So thank you so much for that. You know, being a resident in San Francisco who went to city college as well and to be one of the leaders at San Francisco unified, i know the value and importance of our Community College and the leaders that are heading up our Community College are i can have a huge task in front of them, but each step of the way we want to remind you that we are with you side by side. And that we are going to continue to support the efforts of our Community College good as supervisor tim was saying when theres so many things that we as a city are doing to protect our residents, that no one else in the country are able to do, we just made an announcement last week mr. Mayor, of what we are doing with our Public Housing and how we are Building Communities to ensure our lowest income residents know and feel that they are part of San Francisco and i think this is a step in the right direction that reminds all of us how incredibly valuable it is for us to be residents of San Francisco to be able to work in San Francisco and to be able to pull out of this bubble every once in a while and give praise and recognition for the great work we are doing here in this city. So at this time i want to be able to open up for a few questions that maybe some of you may have. Hi annette. Width [inaudible off mic] width [inaudible off mic] [inaudible off mic] item of the chancellor has actual numbers. Students at city college. We do know that over the last two years that the number of san franciscans residents enrolled in any number of credit courses, one, two, however money was roughly 20,800 over the last two years that these are San Francisco residents enrolled in at least one credit courses one credit course. Last year when we campaigned to make City College Free, it was very important to us that we talked about a program that was free and universal to everyone. And i spoke about this a little bit in the beginning of my remarks but americanamerican government locally and throughout the state decided to invest in a universal and free k12 Education System because they believed at that time in the 20th century that was what was necessary to provide citizens a foundation in order to the tools they needed to succeed into the middle class. We are learning today that in the 21st century that a High School Diploma is no longer enough to compete in todays market. That close to 70 of all jobs here in america will require some type of post secondary degree training or certificate by 2020 so its very important to us that similarly to how we may k12 universal and free, even to to the children of the founders of [inaudible] that Community College should also be free to all residents that live here in San Francisco. But that is a Government Investment in all of our citizens. [applause] in fact we are asking those who are making the most in San Francisco to contribute to making City College Free. So why shouldnt city college be free to them as well . Thats my response that i dont know, chancellor, if you want to talk about the numbers at all or if you have them . So the formula component of this was really challenging because theres multiple ways for us to calculate how many fulltime and parttime students that we have. So when we are going to be approaching this is paying for credits. When we think about the number of students who are indo not currently have a waiver were going to take all the rest of those credits because that really lands us on a more accurate amount that the city can invest without counting that headcount. But we are really clear on how many parttime and fulltime students will be able to receive the grant component of it which is close to 10,000 students, because they allthey both go through a process that think over the next two years while we are in thiswith the formula that we are using, we will also be able to collect more data. So we currently,if youre eligible for bob you have to make 70,000 or less as an individual work 37,000, or less, as a family of four. So that is not a lot of money. So you are right. We would love to be able to understand what the threshold would be should we be givingyou know brands to those that are within the 37125 like gov. Cuomo has been quoted as saying in his program. We dontcity college doesnt collect that information theyve no reason to collect what peoples income is as we dont have that. But we do hope that over the course of the next two years as we implement the program we will be able to identify some Additional Data that will help to support making the program even stronger. But that idea that 37,000 is the current threshold to get Financial Aid in San Francisco is daunting. Yes . [inaudible off mic] what constitutes a San Francisco resident . It is one year and a date them into a california resident. If youre not a california resident you pay a higher fee at city college. So you pay 234 per credits versus the 46 per credit if your a california resident. [inaudible off mic] width so its a california resident of lives in San Francisco. So we will be [inaudible off mic] correct. So this will be the details and the mou were going to be identified because thats the kind of information that will be built within the system that we want to develop at city college. So, in addition to the funding we are providing for the tuition and for the grants we are also giving city college a half Million Dollars to build the infrastructure and the capacity to ensure the program can get implemented. [inaudible off mic] we do knowwhat we been working with is this idea that 80 of those that go to city college are San Francisco residents. So we have data on theon the zip codes. So we will be running through what the proof of residency requirement will be. But if you can prove you are a San Francisco residents then that is what we will bethat is credit will be taken care of. [inaudible off mic] the method of proof has not been confirmed. Correct. But we have methods within Community College already that identifies San Francisco residents. [inaudible off mic] so we are notright. In a Public Schools we dont allow that to happen is we investigate those to be quite frank. We will determine white that will look like. [inaudible off mic] leeann . [inaudible off mic] i will answer the first part of that. So the total budget per year will be 5,000,003 and 66,952. So the way that breaks up is we are going to be covering the creditor classes to the tune of 2,000,092. 632. We will be covering fulltime bob recipients for 100 excuse me four year. Thats 250 for the fall and for the spring. That total is not to exceed 1,578,000. Then we will cover 200 for our parttime students could that will be 100 for fall and 104 spring. That number is not to exceed 8400 im sorry 1,696,003 under 20. [inaudible off mic] the money from the tax, i dont see melissa who would [inaudible off mic] yes. Prop w was worded such that all the tax and general fund. Of course we have needs and this is where a lot of the conversation, the more delicate conversation, happened was that we needed a sustainable approach to this that had everybody including the city family engaged with this because also property taxes quite friendly transfer taxes, our little bit of volatility in them so we did not want to have promises built solely on that promise but on the fact that we will commit to this. This is two years they forever commitment and so what i have always preached is thatthat we keep our city economically strong while we do this because a strong city can then afford to do these things for our residents that bring old promises back to reality. [inaudible off mic] we will continue this average. We do it to your budget we do fiveyear Financial Planning and im glad now that we have city college and all of its folks to actually be part of the city budget process. Under the board appreciates that. Everybody does. Its a much more responsible approach because as we have learned School District cannot act alone. Now the city college cannot act alone could know we all act together for the benefit of our residents, and i think this is a good start. I think this is a part why we have to be together with all of the different agencies that were working in San Francisco. Not just siloing off with each other. [inaudible off mic] so this money except for 500,000 number which we are using for programming and seven, all this money goes directly to the students. It is basically a passthrough to the students in terms ofit goes straight to their fees. Basically, we put all those fees we provide the documentation and then provide that to the city and we still have to work out the details of that on the mou. So that this isnt actually new income coming to the college. It is basically a grant that goes straight to our students. So that said, it willwe are anticipatingit is a piece of helping to grow our enrollments. Were doing active engagement with San Francisco unified mode with the city Business Community, and then also with our partners with the fire and Police Department to bring back some enrollment to city college. That said, we do about 35 nine dollar step down in our budget and so what were trying to do is be fiscally responsible and slowly step down our courses while at the same time growing our enrollments. We do have a lot of empty seats. We have a schedule thats basically built for about 85,000 students. So we want students to fill those seats. So we are welcoming people hate, come back take of course take a language course, expand your mind take a music course or come back for some retraining. Get a plan on a different job. We have internships in stem cell research, in it security, and so come back to give us a try. [applause] the so once again thank you. Congratulations. We have Free City College in San Francisco good we should celebrate that we want to thank all of you for attending. Thank you. [applause] b was as a society weve basically failed big portion of our population if you think about the basics of food, shelter safety a lot of people dont have any of those im mr. Cookie cant speak for all the things but i know say, i have ideas how we can address the food issue. Open the door and walk through that dont just stand looking out. As they grew up in in a how would that had access to good food and our parent cooked this is how you feed yours this is not happening in our country this is a huge pleasure im david one of the cofounder so about four year ago we worked with the serviced and got to know the kid one of the things we figured out was that they didnt know how to cook. I heard about the Cooking School through the Larkin Academy a. Their noting no way to feed themselves so theyre eating a lot of fast food and i usually eat whatever safeway is near my home a lot of hot food i was excited that i was eating lunch enough instead of what and eat. As i was inviting them over teaching them basic ways to fix good food they were so existed. Particle learning the skills and the food they were really go it it turned into the is Charity Foundation i ran into my friend we were talking about this this do you want to run this Charity Foundations and she said, yes. Im a cofound and executive director for the cooking project our best classes participation for 10 students are monday theyre really fun their chief driven classes we have a different guest around the city theyre our stand alone colas we had a series or series still city of Attorneys Office style of classes our final are night life diners. Santa barbara shall comes in and helps us show us things and this is one the owners they help us to socialize and ive been here about a year. We want to be sure to serve as many as we can. The San Francisco Cooking School is an amazing amazing partner. It is doing that in that space really elevates the space for the kids special for the chief that make it easy for them to come and it really makes the experience pretty special. Im sutro sue set im a chief 2, 3, 4 San Francisco. Thats what those classes afford me the opportunity it breakdown the barriers and is this is not scary this is our choice about you many times this is a feel good what it is that you give them is an opportunity you have to make it seem like its there for them for the taking show them it is their and they can do that. Hi, im antonio the chief in San Francisco. The majority of kids at that age in order to get them into food they need to see something simple and the evidence will show and easy to produce i want to make sure that people can do it with a bowl and spoon and burner and one pan. I like is the receipts that are simple and not feel like its a burden to make foods the cohesives show something eased. I go for vera toilet so someone cant do it or its way out of their range we only use 6 ingredients i can afford 6 ingredient what good is showing you them something they cant use but the sovereignties what are you going to do more me youre not successful. We made a vegetable stirfry indicators hed ginger and onion that is really affordable how to balance it was easy to make the food we present i loved it if i having had access to a kitchen id cook more. Some of us have never had a kitchen not taught how to cookie wasnt taught how to cook. I have a great appreciation for programs that teach kids food and cooking it is one of the healthiest positive things you can communicate to people that are very young. The more programs like the cooking project in general that can have a positive impact how our kids eat is really, really important i believe that everybody should venting to utilize the kitchen and meet other kids their age to identify theyre not alone and their ways in which to pick yours up and move forward that. It is really important to me the opportunity exists and so i do everything in my power to keep it that. Well have our new headquarters in the heart of the tenderloin at taylor and kushlg at the end of this summer 2014 were really excited. A lot of the of the conditions in San Francisco they have in the rest of the country so our goal to 257bd or expand out of the San Francisco in los angeles and then after that who know. Wed never want to tell people want to do or eat only provide the skills and the tools in case thats something people are 2rrd in doing. You cant buy a box of psyche you have to put them in the right vein and direction with the right kids with a right place address time those kids dont have this you have to instill they can do it theyre good enough now to finding out figure out and find the future for good afternoon. I now call to order the regular meeting of the Health Service board of the city and county of San Francisco. Would you please, stand and repeat the pledge of allegiance . [pledge of allegiance] secretariat 10 call the roll call roll call president scott present, lamb present, breslin here, farrell excused ferrigno expected, follansbee present, sass, here. We have a quorum thank you we are now ready to take up action item number one, item number one action item approval with possible modifications of the minutes of the meeting set forth below. Regular meeting of february 9, 2017. Are there any additions edits or changes to the minutes . If not, im ready to entertain a motion. So moved. Second. Is improperly moved and seconded that the minutes be approved as distributed. Any further comments from the board . Any Public Comment . Hearing none, and seeing none, no other comments. We are ready to vote. All those in favor say, aye. [chorus of ayes. ] opposed, say nay. [gavel] they are passed unanimously. Discussion item to the item number two discussion item general public on on matters within the boards jurisdiction not appearing on todays agenda. Other any Public Comment on matters that are not appearing on todays agenda . I repeat. Are there any Public Comments on matters within the boards jurisdiction that are not appearing on todays agenda . I put it within the short boards jurisdiction because i know given to the National Political activity on the accountable Affordable Care act, that there might be. But thats not in our jurisdiction today. So anything else would be more than happy to take. Hearing none, and seeing none, we are now going to move into the rates and benefits committee. We act as a board as a committee as a whole on matters pertaining to the rates and benefits process. So at this time we will take of action item number three. The item number three action item is additional 10 county survey amount of 2018 plan your. Mr. Hewitt. Good afternoon the tree with actuary. I haveyou have before you and he will be projected onto the screen today the 10 county survey. As a matter of introduction to what the 10 county survey is, per the charter its a requirement of the hss board and Health Service board and hss to have an independent entity collect the single contribution for the 10 most populous counties in the state of california. And how we do that is we take every plan that opportunity or employees, take the employee contribution and average all those amounts and say, this is what this particular county is going to pay for their employees forgiven your. Then once we get that the charter says once you have the averages for the array of benefits offered by a respected county, average those numbers. Then as part of section, i think its a20 812 apps that do whatever you would deem as necessary to adjust that number so it represents what you would anticipate to be the average contribution afforded publicsector employees in the state for these 10 counties. With that being said, we have done the work and i want to do a strong appreciation to the work done by [inaudible] at hss and other parties because they did the majority of the collection of the data i got to be actuated to review the data and copulating and say what is the answer. Is he in the room . Okay, thank you. Thank you. Yes thank you very much and he did an excellent job. I reviewed the data. Oh i like to take us to what is up there. I dont know if you can see this no. I would tell you it can be seen by anybody with 2020 vision. [laughing] thats why we are going to make it very clear statement that the details of this presentation and all related Board Members we are discussing today can be found on the hss us website. We do a printed copies in the room for those who like myself need an enlarged understanding and prints of this data. So i happen to have it on an ipad but there are some printed copies available. Please, procedure okay. Without being said the answer is and this is not far right column for 2008 and, once we did the math, we get our projections and the answers 649. 17. Before you injured into the present collective bargaining that was applied to active employees and was applied for each individual here. Your single, twoparty and family. So the first thing that was paid by the county to these employees whether they have kaiser or blue shield, the city plan, was the 10 county amount. I was postponed or i think you could say deferred or not being utilized under this present collective bargaining arrangements. It may or may not be used in the future. So this number used to have incredible pertinence to how the final employee contribution was determined. But it is still used for early retirees and for post65 retirees to its apartment number. The strength of this number is more from a well its going up 7 and how are we going to end up in 2018 is yet to be seen so we have approximate what they are paying now and we will be able to prepare this as we go for especially in the may meeting and say, okay you presented the 10 county. As an action item you have to accept the 10 county will be at the end of this explanation of what we are doing and you can say, okay at 649, all of our numbers are less so we are doing excellent like kaiser right now i just pulled a premium of the website is 540 approximate. So this 10 county is more than what is being required by us to pay the full premium. So we are doing rather well if we compare it to our brothers and sister counties appeared with that being said, you have this information. You can compare it. Went up 7. 33 . One last comments. As we have done this, we have noticed that several of the counties have in order to get some the previous 2 and 4 increases period over period and change the benefit. We have never change the benefits. Maybe slightly under the 10 tenure of dr. Dodd we really hel held fast and tight to the fast to get it if we do our job properly into the aco in the aco works are benefit and kaiser does what they do so well that we wont have to change the benefits. So as you see some of these numbers, if you do a comparison to go back and say how did hss is due compared to the somerset at the 10 county which is the bottom percentile there, i want to make it clear that these increases for these summaries, italys average of averages, also are impacted by the fact they were reduced benefits and if you go back and read all the devils in the details you will see that. Thereve a lot of ages eight to have a lot of high deductible, the programs change. So i will stop that explanation. I just want to let you know. So before my recommendation is you approve the number which technically is what we have to do. All right. Recommendation from the action could any questions . Im curious about the Santa Clara County keeps going up a lot of the time. I used to know some details about their benefits but i dont know