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tv   [untitled]    December 4, 2014 9:30pm-10:01pm PST

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many of our largest parking lots in the city, came to us and said, you know, we really like to upgrade the systems for parking control and allow the people to pay electronically and could you help us out and that is the legislation that you could have today. if this ordinance is passed it will enable the mta and other parking operators to procure technology and to go into the garage, and you can check in with your smart phone and you would be able to slide in your credit card or use your fast track and exit the same way without these little tickets. and what is important here is that it will allow our office, the treasurer's office to maintain a high quality of control over the parking fees paid and actually enhance that by moving to electronic payment. and in addition the office trenthens the requirement for unattended parking station and
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valet parking stations to insure the consumer protection and maximize tax receipts, any questions? >> i want to say thank you for bringing this forward and like forward for more of this stuff to come. >> thank you. >> we will open it for public comment. anybody wish to comment on item five? >> you wish to comment? >> you can come to the podium? >> (inaudible) >> okay, thank you very much, any other member of the public wish to comment on this item? >> okay, public comment is
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closed, motion to send this item forward? >> great presentation and i move this item forward. >> without objection? >> okay. >> madam clerk, could you call item number six? >>ordinance amending the administrative code to revise the binding financial policy under charter, section 9.120, regarding a general reserve and required funding levels, and to update provisions regarding the rainy day reserve fund. >> okay, thank you, we have rosa field our controller to speak on this item and we want to thank him and his entire staff for all of their hard work on this. >> and up until a few minutes ago. >>
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>> good afternoon, supervisors ben rosenfield controller, thank you for having us here today to present our proposed modifications to the city's general reserve, and stabilization reserve policies. you may recall the voters adopted initiative about five years ago, whereby the city and the city can adopt the financial policies and the controller proposes policies to the mayor and board of supervisors and the board with the two-thirds adoption and concur ant of the mayor and the policy can go into effect and can only be suspended by the 2 thirds vote for a year at a time. so five years ago, we proposed policies that will be put in place for the reserve structure in the city and we are back for the first time to suggest a modification to them. >> and just as reminder, we really have two types of
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reserves, in our existing structure. we have contingency reserves and this is intended to cover, unanticipated costs and causes it to increase from what is formally about 25 million up to 2 percent of revenue and at the moment on a schedule. and at the moment we are at 1 and a half percent of revenues, and for the schedule, and pretty existing policy to increase by an additional 2.5 percent over the next fiscal years and reaching a cap of two percent of fiscal year, 16-17, while the general reserve is a reserve that covers losses that occur in a single fiscal year, stabilization reserves are intended to really help the city through the economic cycles and we have two of these, and former supervisor tom amiano proposed and adopted a rainy day reserve for the
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city in 2004. and that gets fed with extraordinary revenue growth during the good times and gets drawn on when the revenues decline, and then five years ago we established a secondary stabilization reserve that compliments that which we called, very cleverry the budget stabilization reserve. those two reserves together, get fed during good times and get drawn down by the city to mitigate the cuts in bad times, our current balance between the two reserves, given our audited financial close for the last physical year comes to 192 million dollars, or about 4.8 percent of revenues. and so here are the few of a challenges that we see five years into the new policy, we have two of them. and as it relates to the reserve we think that it is too flexible, once we reach the two percent cap you are required to
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maintain that two percent cap even if the city is experiencing some significant revenue losses that it might in a recession. and replenishment of the reserves continues to be mandated at the two percent level and so it could really, it is locked in even during bad times, on the other side, we have the stabilization reserves and while the balance, is growing out of the prerecession levels, we are about at the same percentage of revenues as we were in 2007 and 2000, and it still remains, well below the target level that is established in each of these reserves at ten percent. and the current balances, as i mentioned is about half of that and we are at five percent of revenues verses the target of ten. and really, in a recession, you are going to suffer, revenue losses in a likely scenario, between 600 and 900 million dollars over the first three years of a down turn but we would like to have more of the reserves in place that could help to mitigate the losses at a bad time. >> this is just in a lesser
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chart of really what it looked like as an example, here on city revenues that you see the black line is our, actual revenue, receipts in every physical year, and the dotted line is our trend line, and kind of what would, and what might the world have looked like if the world had not collapsed in the early 2000s, and a space between those lines is refly the revenue that we expected to get but we didn't because of the recession in 2,000 that came to 700,000 in revenue losses that the mayor needed to address and really significant gap. this is in dollars from 15 years ago, if we bring that forward to today's dollars that is more in the 800 to 900 million range and we will have a 5 year plan that we will be bringing back to the committee soon and we will talk about what the recessions might look like. so here, the gist of the changes that we are proposing
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and there is a handful here and we are trying to plan for further growth of the general reserve, and in times of extended economic recovery. while at the same time creating greater flexibility in the reserve for times of recession or down turn. the current cap as a said earlier has received, 2 percent is received in 16-17 and we are proposing to phase in the proposed growth to 3 percent over the subsequent years and i have some amendments to that that i will suggest to change some of this a little bit but we are opposing to phase in one percent into the general reserve over time and if the economic recovery continues, and then we are also layering in this allowance that the city can reduce the reserve to one and a half percent in years where we are in a recession. where we are eligible work or withdraw from the rainy day reserve. and then, in that subsequent period you would then phase in the growth again from that lower 1 and a half percent level up to the three percent
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level if the economic recovery persisted. >> to just to give you an illustration of this graphic, this is what the current policy looks like. and we have layered in a recession here just for illustration sake, and in 2021, 21, 22, just in more predicting that one will occur then and just for illustration, you can see that we rise to the two percent level for the general reserve and then we are required to maintain it at 2 percent even during bad times. what we are proposing here is something that looks more like this the reserve if recovery continues, the reserve continues to grow up to a new cap of 3 percent, and but then if a recession occurs it resets you get the budgetary savings because you are liquidating to a lower level and you are growing it again when you are out of the recession and that the fundamental construct that we are proposing. this will speaking of current dollars, this will grow
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modestly the amount of money that will be available to offset those revenue losses in the next recession, we are at about 193 million dollars today or 4.8 revenue and the target that we have established in the two reserve ss about ten percent and the reduction in the general reserve that will be permissible will generate about 58 million dollars in additional savings and so it is progress towards having enough money on hand to help better weather a down turn. >> so mr. chair, as you know we worked with you for a number of months crafting this proposed policy and i have been working and we have been working with the other members of the committee most notably supervisor avalos and we do have a set of given conversations that we have had with supervisor avalos and we do have a set of recommended amendments today that we would like to suggest are reasonable and it would ask the committee to consider them. they really do three things. first, the amendments that you have before you, and i have
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copies here for the members of the public if they are interested, and it is modestly slows down the proposed phase and of the policy adjustment. and the general reserve would grow from 2 to 3 percent, and in four years and not three. and secondly, the restoration of the reserve from one and a half to three percent following the recession would occur in 6 years, not five. secondly, it creates an overflow account and it is the ten percent stabilization reserve target is met at some future point and we hope to get there at some point and this is come parable to what we have in the rainy day reserve, if it hits the ten percent cap money that would have flowed to the rainy day is deposited to a one time spending account and so we are establishing a similar account here and stating things that could be spent on. and as examples. they include infrastructure, affordable housing and retiring debts and one time uses. and then lately, the amendments that you have before you,
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clarify the permissible uses of the budget stabilization reserve should the board have suspended by the two-thirds vote and there is language there that obviously allows that to occur, with the two-thirds vote of the board and this has the language that could be used for infrastructure and affordable housing or retiring debts or legal purposes. so that was a very quick run through of the policy, i would be happy to take any questions from the committee. >> seeing no questions, mr. rose it has been a while. >> i am sorry i didn't hear you. >> never mind. >> mr. chairman and supervisor campos, on page 19 of our report, we state that as shown in table three, and that so page 20, stable three, based on information provided by the controller's office in the fiscal year 2003, 4, when the
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rainy day reserve was established the city has deposited $118 million and withdraw, 34.14 million and that was only in one fiscal year, fiscal year, 9, 10 and the purpose was to offset the revenue losses from the 2008 financial crisis and in addition over the last eleven years, the city has transferred 78.93 million, to the san francisco unified school district from this rainy day reserve to offset the client for the revenues and the current unaudited balance in the rainy day stabilization reserve is 60.30 million as shown in table three. on page 10 of our report we also note that the general fund reserve is currently 58 million or 1.5 of the city's 3.89 billion, 13-14, general budget and as shown on the page the general reserve is proposed to increase to the two percent of
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the budget by the fiscal year, 16-17, under the existing and proposed provisions regarding the general reserve, our recommendations supervisors are on page 21, and we recommend that au mend page 4, line 13 and this is just a technical amendment and instead of the words general fund, it should say and it should specify the general reserve, and so the reserve instead of fund and the second recommendation is that we state that given that the san francisco voters approved proposition c, and on november fourth, 2014, do recommend the proposed regarding the rainy day reserves all of those are consistent with the language in proposition c and finally we consider the approval of it to increase the city's general reserve from two to three percent and this provision is not in proposition c. so that is why we called this provision out. and in periods of sustained economic growth and allow the
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reduction to the general fund reserve and the general reserve to 1.5 percent during the economic down turns and we consider that to be a policy decision for the board of supervisor and happy to respond to any questions. >> thank you, just to are clear a number three, you are saying that the policy matter. >> only because we don't disagree with it at all and it is a new policy and not contained in proposition c and so we wanted to call that out for the supervisors. >> okay. >> mr. rose, if you will, and suggested number one and two from the budget analyst is that you are con sur ant with those. >> and they are good catch and we can submit the revisions to the clerk that accommodate those. >> okay, great thanks. >> no other questions right now, we will move on to public comment, anyone wishing to comment on item six? >> come on up. >> (inaudible)
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>> anybody else wish to comment on item six? >> seeing none, public comment
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is closed. so we have a few items to approve, if we could first of all adopt and approve the amendment as of the whole. >> so moved. >> okay. >> why don't we do that. and then if we could approve mr. rose's and our budget analyst recommendations, on items 1 and 2 skt underlying item. >> so moved. >> i am sure that they will get you the legislation by 9:00 tomorrow. >> and all right, why don't we, we will save the two airport items for last and go to item 8
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right now. >>resolution retroactively authorizing the mayor's office of housing and community development, on behalf of the city and county of san francisco, to accept and expend an innovation fund research contract in the amount of $442,996 from the u.s. department of the treasury, internal revenue service, for the period of september 30, 2014, through december 21, 2016. >> chair and supervisor campos, thank you so much, office of the tax collector here on behalf of my friends of mayor's office of community develop sxment they have been wonderful in stepping up and doing the processing for the grant that we received, and actually that the contract from the u.s. department of treasury and it is a 443,000 dollars over two years to provide, financial counseling to the residents at the four sf sites and we are going to be testing whether allowing enabling electronic payment of rent, reduces the likelihood of eviction at these four sites and i think that this is a very exciting initiative to bring the high quality, financial service and products to the housing authority residents and to particularly target the residents who are working and therefore unable to use the rent, pay services available to
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the clients on general assistance or social security and i want to thank you again for my colleagues at mel for their help here. >> thank you. >> any questions? >> okay, we will move on to public comment. >> anyone wishing to comment? >> seeing none, public comment is closed. >> so we have move this item with rec disingsing daysing. >> that i can that without objection. >> could you call item 3 and 7, and we will take them in that order. >> item three,resolution approving modification no. 1 to professional services agreement, airport contract 8841r, to design, develop, install, and maintain an integrated ground transportation and taxi management system between transcore, lp, and the city and county of san francisco, acting by and through its airport commission, in an amount not to exceed $10,892,674 pursuant to charter, section 9.118(b), and extending the term for one year through june
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30, 2016. >> item 7,resolution approving amendment no. 1 to domestic terminal food and beverage lease no. 03-0184 with bay area restaurant group, jv ("max's eatz" and "max's the greek") for a term of ten years, plus one two-year option and a minimum annual guarantee of $36,103.00; no. 03-0183 with bayport concessions, llc ("willow creek grill") for a term of ten years, plus one two-year option and a minimum annual guarantee of $34,237.00; no. 03-0200 with ssp america, inc. ("anchor steam") for a term of ten years, plus one two-year option and a minimum annual guarantee of $150,329.00; and amendment no. 2 to no. 03-0193 with gotham enterprises, llc ("peet's coffee & tea") for a term of ten years, plus one two-year option and a minimum annual guarantee of $36,487.00; and no. 03-0180 with sankaku, inc. ("sankaku") for a term of ten years, plus one two-year option and a minimum annual guarantee of $37,125.00; and the city and county of san francisco, acting by and through its airport commission, to commence following board approval. >> okay, thanks. and here from sfo to speak on these and why don't we take three and the budget analyst and then we will knock that out and go to seven. >> understood, good morning, cathy widner with the san francisco airport, the item before you seeks the approval for the first modification to an existing contract, with transcorp lp to implement a new ground transportation and taxi management system the proposed amendment will increase the current contract amount not-to-exceed amount by 2.6 million and extend the contract term by one year through june, 30, 2016. the updated ground transportation management system will provide real time tracking of our taxi and ground transportation operators on the airport property, as well as replace existing end of life automated vehicle, identification system and it
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will provide for an inner face than we currently have with the other agencies regulating these businesses, and the gtms project is critical at the airport as we have over 10,000 permitted ground transportation vehicles. and those vehicles generate 13.5 million dollars, in annual revenue. currently, the revenue lost from failures in the existing system are estimated at about 1.5 million dollars annually. and the original contract with transcar was the result of the competitive request for proposal process and the proposed amendments are necessary to update our current system. the budget analyst recommends approval with a few amendments to the resolution that the airport agreed with and if approved, i will get the revised resolution to the clerk's office this afternoon. i would be happy to answer questions. >> thank you. >> supervisor campos. >> thank you, and i usually agree with the budget analyst recommendations, but i am not
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sure i feel comfortable with this amendment i want to find out more information from you. i mean we are talking about a 31 percent increase in the original contract. which you know, was not actually for a long period of time and it is only a 3 year contract. and yet, in a very short period of time we are talking about you know, our most 31 percent increase. and so, what happened here, there were 26 different adjustments and modifications to the contract, and i just trying to understand how something like this could happen so quickly where the amount is increased exponentially and in a very short period of time. >> the contract itself is very infrastructure and technology driven that accounts for some of the costs but i am going to ask the land site director to come up and answer specifically to the 30 percent increase.
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>> good morning supervisor campos, i am the director of operations at sfo, and as cathy widener mentioned it is infrastructure driven and a contract for the ground transportation with the software and the hardware pieces were added to catch the roadway signs that were not covered in the original scope of agreement and additional scope was added to address the new modes of transportation of tnc that are coming on and the license plate recognition system and those kinds of systems will also be procured through this and so therefore, once this process has been ongoing for about three years, and the development of the rfp has been ongoing for quite some time and we saw the areas that we may want to capture more revenue from and that is what
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was added. >> looking at table four you have the very sort of a detail of the different amendments that are included in 2.6 million, and so could you explain to me, taking with an example, the integrated management system and the irm s, to replace the pmbs enter face, why was that not included in the original 8.2 million dollars? >> so the irm s, system was added as after the scope of developed for the original rfp. and the way that the original, and the way that the current system works is that we do the billing after the fact after all of the trips are generated and the system will put it more into the mode of where the fast track operates where every single trip will be deducted from a threshold attack. and currently we have a lot of operators that run trips through the airport and they go out of business or their solar business and they failed to pay
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the airport the revenue that they get, >> was that in the original contract? >> in the original contract when we met with the airport staff, the logic between the controllers office and the airport staff is that we continue to use pbms and do the billing and as we developed the system we decided that it is best to have the threshold accounts instead of doing the system we have been doing for years. >> and your role and, your airport staff? >> yes, sir. >> and okay, could i ask you, there is another example there, i guess, 17 different chains, or different change orders that come close to 400,000, could you explain what those are? >> for the enhanced vehicle tracking and updated cct camera systems. >> the camera systems were added to monitor the curb side
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operation and the customer service move where currently in our current system when the vehicles go through and if someone loses a lap top for example, they basically come back to us and say i took a blue van from the airport during this time. and then we have to sort through all of the records and it takes a long process to identify the particular vehicle, with the cameras were added to certain areas to basically see that footage in real time, where we can go and narrow it down. the current coverage for those particular areas are where the cameras are far away and you have to zoom in and you may be able to see the vehicle or you may not. >> the problem that i have with these amendments if you look at the original rfp, you know you have got, i think three responses to the rfp. and at that point, this actually did not come before the board. because it was under $10 million. had it had the scope actually included the added new scope that is included here, it clearly would have come before
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the board of supervisors for approval because it would have, you know, gone past the ten million dollar threshold, the problem that i have is when you change the scope to this magnitude, it is never really clear if you are actually getting the best deal for the tax payer, because if the rfp had done with the proper scope to begin with, it may be that maybe somebody else could have given you a better deal, and so that is the problem that i have and when you have 26 different amendments, in a three year, or in a contract for a three year term, i mean that is pretty significant and so, i dent know, i definitely have questions, and i know that there is another item but i want to make sure that if there is any other questions about this my colleagues get to ask them. >> why don't we, please take a vote and could we go to your report and take this going. >> members of the committee.
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first of all i think that supervisor campos raises excellent questions. i would comment two things, one, some of these amendments were included, that is the scope, or the basic scope was included in the original contract, these are some of these are increases to that scope. not just brand new. that would be one comment, and for example. if you look at the interim solution, and the $132,000 that was included in the original scope but you are correct that some of it is brand new. and the other thing is that as i understand it, on this kind of contract, once and maybe the airport did or should have included some of this scope in the original contract, but once the contract was awarded and the contractors there, it is almost, it would be very difficult, i think, in my professional judgment to change this contract. that would be my other comment. >> on the report, i would point
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out that the, as we have just been discussing this is going and they requested additional authorized contract amount of the 2.6 million is detailed in table four and ha is what we are just discussing on page seven of our report and we also note that the requesting a continuing amount should be 7.5 percent of the remaining contract funds of 6.6 million dollars or 4935.6, which is 266, 474 less than the amount, and of 760,000, or therefore, we recommend that you amend the proposed resolution to reduce, not-to-exceed by 266474, from 10 million, to 10.... and we do recommend that you approve as amended. >> thank you. >> and colleagues, no further questions, we can open this up for public comment? anybody wish to comment on this item? >> number three? >> okay, seeing none, public comment is closed.
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>> so, we have one recommendation by the budget analyst, for the airport and is that something that you are in concur ans with? >> yes, the airport agrees with the budget analyst recommendations. >> okay. no further comments or questions? >> supervisor campos? >> i guess that maybe this is sort of a broader, question and i know that there is another contract that we are going to deal with, and i think that it is really important to step back and look at the big picture of how the agency is being managed. and mr. rose, in terms of the airport contracting, and over all, operations, when was the last time that there was a management audit of the airport to your knowledge. >> mr. chairman, members, or supervisor mar, and supervisor campos. the last comprehensive management audit of the

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