Okay, great. Supervisor fewer good afternoon, everyone. This is the march 11, 2020 meeting of the budget and appropriations committee. I am sandra fewer. Our clerk is ms. Linda wong. I would like to thank sfgovtv for broadcasting this tv. Any announcements . Please make sure to silence all cell phones and electronic devices, complete speaker cards should be submitted to the clerk. Supervisor fewer item number 1. Hearing to review the report on the Controllers Office on the current years expenditure and revenue information and projections as of december 31, 2019, sixmonth budget status report and the mayors budget instructions for 2021 and 2122. Supervisor fewer we have a presentation from city controller on the sixmonth budget status report for the city and county of San Francisco, which was released last month. Ive asked mr. Rosenfield to share early assessment of the impacts of covid19 in the city, although we may not have yet definitive numbers, this committee should be informed in realtime about the financial picture of the city. Thank you for sharing what you can today. Finally, ive asked mr. Rosenfield to give us a brief overview of the new city website that is created since the passage of the budget transparency. Thanks again for all the colleagues that signed on. Im so proud our access during the budget process is being realized. Since our legislation was passed in december, we have seen city departments, not just check off a box, but truly take on the challenge of Holding Public meetings to gain meaningful input. Thanks to departments like the office of economic and workforce development, recreation and parks, and Child Support services for implementing new practices, inviting me to participate in your community presentations. These steps toward the goal of Greater Transparency for allocation of tax dollars are building on years of best Budget Practices from departments Like Public Health and will make the budget process stronger. This website is a powerful tool to help San Francisco residents navigate the complex process, so i appreciate the effort from the contr Controllers Office to finalize it. With that, Ben Rosenfield from the Controllers Office. Thank you. Good morning, thank you for having us here today. This is certainly timely and so we look forward to not only talking through briefly some of the highlights from the sixmonth report which we published almost exactly a month ago. Ill talk through some of those updates and well provide you with updates were seeing regarding events in the local economy here today and we can Start Talking here and elsewhere about what the financial implications are to the city. Weve got a couple of updates coming just to let folks know what is coming after this. Our office is working on tax revenue ranging and updates related to covid in the current fiscal year. We hope to have that complete next week. At least for initial range. And then all three financial offices, our office, the boards budget and legislative office and the mayors Budget Office are updating our projections of the next four years. That will be complete tend of the month. Flu on the sixmonth report we publicish each year, we do see good news in the sixmonth report. I know we briefed many of you individually on this, about 98. 1 million improvement in ending fund balance. Ill talk about how that applies to next years fall forecast. The majority of this good news is really being driven by two departments. So we have significant good news over 60 million in the department of Public Health as of sixmonth. And our Human Service agency 20 million. Ill talk about each of the departments in a membership and what is going on in a minute and what is going on there. Ill talk about taxes overall, but the big news is the continued strength we saw in the first half of the fiscal year related to transfer tax. We saw a number of Large Properties trade hands in the year, with payments in excess of 20 million for a single transaction, so we had a lot of strength there. Under the way the citys reserves work, that volatile revenue, a significant portion, ends up deposited into a onetime reserve. And like i talked about most ill talk about in a second, most other taxes are trending toward budget. At least as of sixmonth. And there is some weakness in hotel and some in admissions tax as of the sixmonth mark. This is showing a picture of all the major tax revenues that we feel in the general fund. And you can kind of see on the far right chart column, how the 6month projection various from varies from the 3month projection. Theyre trending toward budget. You see that for property, for sales, for utility user tax, parking tax. And also how significant the real transfer tax news is. That is 71 million. But were we werent seeing a lot of change versus our other previous projections of major taxes. In terms of department, this gives you a summarized view of everything going on with all of the departments and the report itself contains much more information, but overall, departments net improvement of approximately 90 million. You can see where that is falling across the departments, but Public Health and Human Services are the vast majority. Ill talk in a second about them and juvenile probation which i know is of interest to the committee and we do see issues halfway through the fiscal year. So, briefly, for the department of Public Health, this is summarizing that good news in health. Halfway through the year. Its almost entirely on the revenue side and the majority of the good news at Public Health is driven at zuckerberg General Hospital. So patient revenue continues to outpace expectations. And we did have some settlements of prior year claims resulted in onetime revenue at the General Hospital. Another thing for us to keep an eye on here, as you may know, the waiver that the state has with the federal government for many different kinds of Health Services expires at the end of this calendar year. There is a lot of work going on in Public Health departments throughout the country to organize for the renegotiation of that waiver next year. But one important fact is that the state is in the process of completing many years of audits of prior year claims. We have money set aside to guard against adverse findings in the audits and weve been waiting years for the audits to be completed. Were hopeful that with the speedup of the state completing the audit processes, will not only have certainty on these sometime before the waiver expires, but were hoping to have good news. So we dont have certainty on that, but its one were keeping our eyes on, health is tracking and well continue to update as we get news on that. Within the Human Service agency, 20 million net surplus. You can see here that the single biggest change here relates to the way the i. H. S. S. Works, that requirement with the state and there were final changes at the end of the state budget process that are favorable to us for about 13 million and 7 million of other savings largely related under spending in a few programs. In terms of juvenile probation, the big issue we see here stems at the end of last fiscal year and its largely, i think, an administrative capacity issue. I think we have remedied now as a city, but as of 6month mark, the department was operating without a number of key positions in their finance shop. And as a result, the department wasnt claiming federal and state revenue in the way they should have been. Since that time, there is a new finance director appointed at juvenile probation. Weve assigned accountness and there is a budget manager on loan to them. So were feeling more hopeful about the stabilization of the function in juvenile and i would hope to see the number come down by the time we get to the 9month mark. As always, we note in the report where departments are projected to live within their budget, but within that budget overspend their overtime line item. As you know to the extent the department wants to do that, they have to come back to the board of supervisors for reappropriations. These are the departments at the 6month mark we expect will need to come back to the board for approximate for permission or change behavior in the coming months. A quick summary as of the 6month mark, how does this fit in with the story regarding the budget deficit . As you know, the three offices publish projections in the early winter of 419 million projected shortfall over two years. The citys general practice for many years has been to take savings that occur in one year and apply it to the shortfall for next year. If that is the choice that is made i would expect it would be you would have to take the 98 million from the 6month report, apply to the previous projection and that brings us down to 321 million. Obviously, well continue to update a lot of this as we go. This is changed obviously given just this week. But the official next update to the projection itself is the joint report which our three offices will publish at the end of march. So im happy to take questions on 6month mark, or i can move into covid. Supervisor fewer i see supervisor ronen, but do we need a report from the b. L. A. , anything to report at all . No. Thank you very much. Supervisor ronen. Supervisor ronen yes, thank you. Thank you for this. For the department of Public Health higher than anticipated budget, does any of that have to do with salary savings . I believe actually no i believe were projecting that the department is spending at the general to budgeted levels. So, at the 6month mark and well update this at nine months but at the 6month mark laguna was spending we were expecting them to spend to the budget. The General Hospital is actually because they have a higher census than assumed, theyre actually overspending their Salary Budget by 5. 8 million which is more than offset by 50 million in revenue improvement. Then they do have expenditures savings in the other parts of the department. So not the general, not laguna, but population health, mental health, et cetera. Supervisor ronen do we know how much salary savings . Its about 5 million in total uses savings. I dont have at my finger tips how much of that is salary, but we could follow up and get that to you. Supervisor ronen okay. And then in for h. S. A. , why are we underspending in cal works and medical. This is savings. Supervisor ronen do we have a sense of why that is happening, because we clearly have the need . I dont, but could follow up with. Generally speaking, these different aid programs have defined criteria as to who is eligible to participate. And to the extent that you project how much participation theyll see, to the extent that participation is higher or lower than that, you see that in our reports. Supervisor ronen id like to know why, because it could be that everyone who is eligible signed up for it could be that we have a problem recruiting and making people feel safe to sign up for the benefits. So it would be great we would be happy to follow up and get more information for you. Supervisor ronen okay. Then do we know why juvenile probation was operating without two key finance positions that were delayed 6 million in federal and state funding . Was that an h. R. Problem . Was that a departmentwide problem . Or the delays from central h. R. Which is happening in practically every department. My impression is this almost entirely driven by issues internal the department. It was kind of an extraordinary moment. Its kind of what has led us to take actions with the new chief to assign temporary help there to help with these things. I personally attribute it to management personnel and operational issues within the department this last summer. Supervisor ronen what was the time period these positions were open and we were failing to fill federal and state bill federal and State Government . The period were seeing the delayed claims was the very end of last fiscal year through this fall. This is not lost money to the city. Its just we will now have a endeavor to reach back and claim for those prior periods and we have with the new chief and with our team and other assistants, we have a group that is working this issue as we speak. Does that help . If there arent other questions, ill move into what were seeing this week. This is an extremely dynamic situation and evolving both from a Public Health perspective and then our monitoring of what the implications might mean for the local economy, revenues and the rest. In our work, we rely on a host of official data points that are often lagged from when the event occurs. Unemployment claims, actual tax filings, reporting from the fed. We wont see some of that data for weeks and months. So in moments like this, we really look to a number of different proxies quickly to get a feel for what is going on. Weve been doing an extraordinary amount of that last weekend and through this week. So im sharing with you, the early data points. We can talk about the things were looking at and working on and ill have more information regarding the tax revenue implications of a lot of this again within the next week. A few issues of great concern. So, prior to the emergency in San Francisco, we had already begun to see declines in landings at the airport, predominantly impacted by china and asia. Youd already seen notable dropoff in landings last winter and into the spring. We commented on these in the 6month report, but you started to see a slowing of tourism into San Francisco and the u. S. From china, but that has changed dramatically in the last week. Landings at the general at s. F. O. This week are down 20 . Thus far this week for international flights. And were seeing it in Domestic Travel as well. So domestic landings at the airport are down 12 this week. That is landings. Thats the number of planes landing. Were endeavoring to get better information from the airlines and we expect to have it soon to the number of people on those planes, but its being reported that those planes arriving are arriving with fewer people as well than a week ago. The actual number of visitors coming to San Francisco or others coming to San Francisco is likely higher than this. The most Immediate Impact of this here within the borders of San Francisco and i think we felt this profoundly already this week, relates to Convention Business. And then spilling over from there into other parts of the hospitality sector. At this point Event Sponsors have cancelled all conventions at the moscone through the middle of may. The cancelled conventions account for 235,000 room nights which is a very large number. We have been spending time this week talking to Hotels Downtown to understand what is going on with their businesses this week. Theyve seen spikes in cancellations, monday, tuesday and even this morning this week. The rate of those cancellations is accelerating. And it is reported information to us, but many Hotels Downtown, if not most hotels are reporting this week theyre now operating at occupancy rates of 2030 . Thats versus the standard that weve grown used to for many years in the city of 8085 . So even this quickly our hotels are emptying out quickly. This kind of level of occupancy is actually worse than what we felt immediately after september 11 to put it into context. Weve been talking to other industries that support hotels and wraparound hotels, catering, other services, special events and the rest. And they have almost uniformly thus far reported to us a mass cancellation of almost all of their business. This is obviously a large part of our local economy. Hotels, hospitality and supporting services and employs a large number of people. Hotels directly employ 25,000 people in San Francisco. And these associated industries that wraparound, depending on how you count them, are tens of thousands of employees beyond that. So very significant and very Immediate Impacts. And the lack of any Convention Business for several months means that we should expect that these kinds of impacts maybe not at these levels but significant, will linger for sometime. Weve also seen this week things beginning to spill over beyond hospitality into other parts of the economy. A couple of indicators we look to for kind of people coming to San Francisco and shopping, not from airports, not from the airport but within the region, bart ridership was down 9 last week. Exits at downtown bart stations over the weekend, which is where were comparing last weekend versus the weekend before, were down more than 9 . So in the low double digits. And then this week, on monday, bart exits downtown were down 24 , versus the monday. Very significant slowdowns. Happening again quickly. This is somewhat related to very large decisions being made by some of our employers in the San Francisco consistent with Public Health advice to encourage telecommuting. So you see large offices downtown and large employers encouraging their employees to work remotely and that means less traffic into downtown and the city from the rest of the region. Over the weekend, you know, one thing we can look at realtime information about what is going on in some of the districts in terms of activity is sampling parking garage