Ground Water Operations until 1949. And in or december 13th, 2006, our commission declared the property surplus to our utility needs. And in attempting to sell the property, we worked again with City Real Estate which issued a request to proposal foz commercial real estate brokerrage, and City Real Estate selected caulers because it complied and it had the lower rate of 2. 75 percent, the budget Analyst Report had a little discrepancy. Beginning in on february 25, of 2016, we complied with the california Surplus Property statute and the ordinance by issuing notices to all public agencies and nonprofit housing groups that required notice. We received no letters of interest from any housing sponsors or public entities. This conveyance conforms with the citys general plan. On november 16th, the Planning Department found the sale of the property consistent with the eight priority policies of the planning code. Our bureau of Environmental Management determined that the sale of the property is not a project under sequa. In may of last year, an amazer valued the of 8. 9 million, another appraiser reviewed and confirmed that the original valuation was valid. And during our bidding process, we accepted the highest responsible bid of 4. 2 Million Dollars, that was from the city of pleasant on. Soliciting these bids, they marketed the property for 25 weeks. We due to the extensive marketing period and public noticing period, we felt confident that the two week call for offers was sufficient, because we knew who the bitteders bidders would likely bidders would be, they received, three bids, on november 7th, 2016, we notified the city that it was the highest bidder and selected that bid. The city council has already approved this purchase and Sale Agreement. The revenue again from this sale will be used to support our capitol programs. And not only in gaining revenue, we will save over 5,000 dollars a year in property taxes and maintenance costs. Do you have any questions that i may ask . Thank you. I dont see any questions just yet. Okay. So at this point i want to turn to the budget and legislative analyst, mr. Harvy rose, good to see you back in one piece. Thank you, madam chair, members of the committee. And on page 5 of our report, we note that the net proceeds to the sfpuc from the sale of the subject property are 4 million 95,000 and that is shown in table two on page 5. We also note that the sfpuc pays both property taxes and maintenance costs on the subject property resulting in the savings of the puc. Of approximately 5184 dollars per year after the sale of the property. We do recommend that you approved this legislation. Well, it you very much for the presentation. Colleagues do you have any questions for the bla . All right, thank you puc we are going to go to Public Comment at this time. Thank you. Ladies and gentlemen, as Public Comment you will have two minutes, you will hear a soft chime indicating 30 second remainder, anyone on item one . Please do so. Seeing none, Public Comment closed. I will make a motion to send fourth the positive recommendation to the full board. Thank you and that passes would ut objection, thank you. Next item, please . Item two,resolution approving and authorizing the execution of a purchase and Sale Agreement with Pradeep Gandhi and Gabriel Gonzalez together, buyer or buyers nominee, for the conveyance by the city and county of San Francisco, acting through the San FranciscoPublic Utilities commission sfpuc , to buyer of three parcels, consisting of approximately 15,341 square feet of Real Property located between helen drive and dexter place, millbrae, california for 2,340,000; adopting findings under the California Environmental quality act; adopting findings that the conveyance is consistent with the general plan, and the eight priority policies of planning code, section 101. 1; and authorizing the director of property and or the sfpucs general manager to execute documents, make certain modifications, and take certain actions in furtherance of this resoluti resolution. All right miss russell you are back . Thank you very much. So, these properties are three residential sized lots between helen drive and dexter place and they are each approximately, 5,000 per lot and zoned low density res denial and, we acquired it for a water enfra structure project but that project never happened. On december 13th, 2016, our commission declared the property surplus to our utility needs. Simply with the property, we worked with the City Real Estate to issue the Brokerage Services and City Real Estate selected culers due to the bid terms and the low Commission Rate of 2. 75 percent. The again, it is with the City Real Estate assistance, we complied with the Surplus Property and the statute for california and the property ordinance, we issued notices to all required entities and housing sponsors and received no letters of interest. This on november 6th, 201 shths our Planning Department found the sale of these lots consistent with the policies of the planning code. Simply, this determined that the sale of the property is not a project under sequa in june of last year, an mai appraiser valued the lots together at 2 million 40,000 on january, fifth, and another appraiser reviewed and confirmed the valuation, with he have two bidders, mr. Gandi and gon sal ez who submitted the highest bid at 2. 3 million for all three lots this is is over the appraised amount. Offered for weeks and we received they were the highest bidder bidders. This is a very clean sale, and after the payment of the commission and mr. Ganda and mr. Gon sal ez have already signed the purse and Sale Agreement. The funds from this sale will be used to offset our capitol projects. Do you have any questions . No. I will turn to the bla. Any comments . You . Yes, madam chair and members of the committee, on page 11 of our report, we show that the net proceeds to the sfpuc from the sale of the subject property are 2 million, 281,000 v,500, that is shown on table two on page eleven and again on this property, they pay both property tax and maintenance costs resulting in the savings of the puc of approximately, 2320, per year as a result of the property sale, again we recommend that we approve this resolution. Thank you very much with the recommendation. Colleagues, seeing that there is no other comments from you, lets go to Public Comment. Public comment on item two is open. Okay, pum public chent is closed. There a motion . Make a motion to pass this out of committee with a positive recommendation to the full board. Without objection. It passes thank you. Thank you very much, you are welcome. Item three, please . Item three,hearing on the controllers sixmonth budget status report for fy20162017; and requesting the Controllers Office, and the mayors Budget Office to report. Okay, colleagues i called for this hearing to provide the controller an opportunity to present our citys 6 month budget status report. A lot has happened in the last few months, and i am anxious to hear what is going on. I believe that it is important for this body and for our entire full board to have a full picture and understanding as to where we are as a city. Financially. And in particular, paying attention to our fiscal health. The report provides a picture of our Current Expenditure and revenue status as well as projections, for the publics edification, this information is he critical to this committees Decision Making process to help us make fiscally responsible choices. With that i would like to bring up controller mr. Ben rosenfield the floor is yours, thank you. Thank you, madam chair, and members of the committee, ben, city controller, as you indicated in your opening remarks, the 6 month status report is one of the quarterly status reports that we provide to the mayor and the board and the public regarding how the city is doing in the current fiscal year we are talking about 16, 17, budget and it has implications for next year that i will touch on briefly. Okay. At a high level in the general fund, we are projecting as of the 6 month mark just under a 300 Million Dollar ending balance in the current year. That is about a 72 million improvement from the assumptions contained in the five year financial forecast that our office, the mayors Budget Office and your legislative budget and analysts prepared in late november and published in early december. And about 54 million better than the assumptions that were contained in the mayors rebalancing plan which identified the additional revenues and so it is about 54 million better than suspected than in the current year. The citys typical budget practice has been to take ending balances in the current year and then use that good news to help close the budget deficits in the i couldnters ahead. And if that is the choice that the mayor and the board make, that 54 million will reduce the projected shortfall over the next two years from about 402 Million Dollars, which was our last forecast, to about 348 million. There is a lot of interesting news in the report this year. Generally speaking and i will touch on some of this, this improvement is really being driven by strength in our property related taxes. Property tax and transfer tax. And by net savings in our health and Human Service departments. Significantly, transfer tax returns in the current year are driving a stabilization reserve deputy in the current year and so our reserves are growing and we project to end the current year with the reserves that total about 8 percent of the general revenue, and so that is an improvement but still below the target which is ten percent. So i should say that i have copies of the report here to my right, which has a lot more detail and i will touch on here today and it is available on the website as well for the folks that are interested in it but at a high level this chart is showing you most of the Major General fund revenue and how they are performing verses the adopted budget and you can see unlike the last several years and really almost five years now, where we have seen pretty consistent improvement verses budget across all of our taxes here we have got some taxes performing better than budget and others performing worse, and like i indicated earlier, it is really the taxes that are driven by the Property Values and property activity here in the city are performing better than budget, generally speaking, those that are capturing consumption activity in the city, those are flattening and in some cases actually declining verses the prior year, and so we have the real strength in property tax and in particular, property transfer tax, and you can see on this chart in the current year verses the adopted budget, but we have weakness in sales tax, and that is driven by the failure of the sales tax that was assumed in the budget. But we also see weakness in a couple of other revenues, hotel tax, interestingly, rather than just plateauing in the current year is actually declining verses the prior year for the First Six Months and that is a trend that we are going to be watching parking taxes also lower than budget, and lower than the prior year and we have weakness in a couple of other major taxes as well. The net news here is good about 91 million better than budgeted. Thank you. To talk briefly about transfer tax we talked about before, they are easily the most volatile revenue in the general fund, it is the hardest for us to project, given that volatility. This is showing you a history back for about the last ten years. And you can see just how quickly it rises and falls. We lost 100 million in transfer tax in just an 18month period between 06, 07 in the trough of 08, 09, and realized 48 million in transfer tax, that entire year. And then we have seen a remarkable up swing and this is really driven by large volume transactions here in the city. Excuse me ben . We have got supervisor yee that has a question for you on the slide. Of course. I just have a question and in regards to the projection for the transfer tax. This is for the First Six Months. Correct. And i guess as you look into the future, are we taking into consideration the luxury transfer tax also . Yes. Go ahead. As you know and for members of the public the voters did approve an increase in the transfer tax for properties of more than 25 million. In value that went into effect on january first of this year. We have assumed an estimate that we consistent with what we have talked about before is 18 million in transfer tax, resulting from that in these projections. It certainly is something that we are going to be watching over the last six months of the year. The First Six Months of this year were tra order for transfer tax, in particular the month of december. In december alone, we generated about 72 Million Dollars in transfer tax in San Francisco. So that is more in a single month than we generated in the entire fiscal year of 08, 09, it was a High Movement some of that was likely transactions recording to beat the increase in the tax rate that was going into effect in january. But it is also just generally been an incredibly strong six months. We have assumed budget levels of transfer tax here for the remaining six months about you we will be watching this month to month. Okay, thank you. Thank you. You can continue. Sure. We had piqued at previous pique was at just under 320 million for transfer tax in 14, 15, and we saw the declines in 15, 16, when you can see on this chart. And the budget we had projected and the budget assumed a continual gradual decline in transfer tax revenues and instead we have had a reversal of that and as we talked about the First Six Months of the year were strong and we are ro jecting to be at a pique for San Francisco revenues. Like i said earlier, growth over the five year average ends up captured in the stabilization reserve, this was a mechanism adopted by the board of supervisors to smooth the volunteer tillty in this tax, and so the strong transfer tax is now fuelling a 70 million depu deposit to the reserve in the current year. In particular it is driving improvement and a lot of the base lines and set assigns that are for interest, but you can see on this slide just how those base lines and funds are improving verses budget. The mta sees an improvement for their share of these revenues. The library base lines are net growing, 2 million and we also see the improvement here in the Childrens Fund and the open space fund, both of which are driven as you know by property tax over all which is growing. Turning to department projections. And these are detailed in the report with obviously further explanation hthe net here is improvement. It is really being driven by improvement in the department of public health. Which is projected which has revenues out performing expectations in the budget. So their net position in this 6 month mark is now at 30 million of improvement verses the six month. As a reminder, that is on a two billion dollar, operating budget and while it is a significant number as a percentage of their whole, it is about at a percent and a half of improvement. But you can see that we also have savings in other departments and the Human Service agencies and others, that are detailed in the report. I should say that some of these savings and we have noted them with stars here. Are expenditures that were associated with the sales tax that failed. And so earlier we talked about weakness in sales tax, and some of these expenditures are now on reserve because of the failure of the sales tax to offset part of that loss. Consistent with the current year budget, the mayors rebalance lg plan and the release of reserve that this committee acted on earlier this year. We dont see any department over spending that will have to draw on the general reserve in the current year, but there are a number of cases where the departments are over spending the over time budget and they have savings in other parts of the budget that they will need the boards permission to reappropriate to cover. Which departments are those . We note them here. Had emergency management, the 911, department for the city, public health, police, fire, sheriff, and maybe the puc. Were all projecting at this moment will over spend their over time budgets in the current year. With savings offsetting that in other parts of their budget. But they will need your permission to reappropriate those savings within their department to cover these offerages. Are you able to estimate when they will come before the committee to ask for permission . It is typically we have done it in the spring in prior years. But it is entirely a choice for the committee actually. We push that forward if you like to see them sooner or have it later in the i couldnter if you like to see them later. We suggest the spring because at that time, the departments have a good handle on where they actually expect to end the year as well as what savings is available to offset it. Do the departments come altogether collectively or are they, you know, ju