other reforms -- the two-year budget we are very proud of. then rosenfield had his vision of creating a framework in which he came up with a recommendation. i thank david chiu for helping to process five. -- process that. we have included financial plans for the first time, that we move to adopt a different framework in terms of some medium-range strategic planning. we put together the framework. good thank you to the board for supporting this. let's not put something on the ballot that takes this away, because it was such a great idea, build on our rainy day reserve that is more robust and more able to deal with economic

conditions. we finally have that framework for the budget. now we have to have the framework. do not forget, it is a pay-as- you-go, which means you are going to spend money, which means of offsetting cuts are finding revenue. these are important reforms that are taking shape in our city that i think deserve some attention. the budget has a framework of priorities. we wanted to do our best to protect our core services, our social safety net worth. we wanted to do our best. look at ways. liggett in efficiency. we can do more on inefficiency. -- look at inefficiency. we can do more about inefficiency.

we need to invest in our infrastructure, create jobs, and we wanted to make sure we were going ofafter all the federal funding we could as well as state resources, private sector resources. we began the process early. we did not wait until the end of the fiscal year, and we manage more effectively in a way that has substantially enhance our ability to balance a budget without draconian cuts. that is a very subjective statement, because if you were cut, it is a draconian cut, and if it is only $10 cut, you would complain it was draconian, though most would claim otherwise. we are trying to avoid the cataclysmic expectations that

some had believed and some have argued was inevitable in this budget, and we will get to how and why and a moment. how did we get there? first, we engage our public employees. i have said this publicly and privately. i must say this more than i s ay anything else, how lucky we are in san francisco to have enlightened employee unions. i am not saying that because we always agree. i am not saying that because they love the opportunity to spend time in the mayor's office working throughways, but at the end of the day common they set up yet again, -- end of today, they stepped up again, and if they had not done it, it would have been different. we would have given it on a

friday and hope no one would pay attention. now i can say on a tuesday after the holiday is done, so it gives people the chance to look at it. this was their agreement to confession. there was nothing reported for the was not reported that will come back to haunt us in a few years. this was an honest assessment of the challenge and an honest commitment to step up to the plate and try to protect vital services and to do our best to reduce the need to increase layoffs. we were able to significantly not only get support from labor representatives, but from the rank and file, and i am proud of this because the concessions are two-year confessions.

i does give you the general fund concessions, but over two years , public employees gained back over a quarter of a billion dollars, and i think that deserves a round of applause, because they need to be you recognize. -- to be recognized. it is an extraordinary thing. contrast that to any big city in the united states of america. it was not easy, but it was because of the leadership that we are where we are today. that was the most important thing we could have done and the most important thing we did. i mentioned we made some tough choices that helped a reduction in the overall budget deficit. i talked about managing more aggressively. we took last year's budget, and some people thought that was great, but we manage the budget

over the last number of months -- 11 months, and over $64 million we were able to carry ford from last year's budget to help us offset -- forward from last year's budget to help us offset that. that was $34 million more. $64 million in carryover funds. how did we do that? we reduced by $17.7 million. we had a strong hiring fees, where we actually had a team and my budget director -- to actually find out on every request the position. it did not make a lot of folks have been. i get it, but we needed to do that so we could nail the

problem and save jobs. we did the math on that. have we not have a hiring freeze, we would have had an additional 193 layoffs. it is critical. it is essential. the budget should not be managed once a year. it needs to be managed once a day. we asked departments to make a media and budget cuts, not just some it budget cuts, but how many of those -- not just submit a budget cuts, but how many of those meetings did we have? they were not easy, but we got a lot of the work done, and because we made an immediate decisions, we were able to address the shortfall. we leveraged state and federal dollars. i will talk about that in a moment. $88 million we leverage from the

state. of the san francisco, $26.7 million we were able to leverage. -- healthy san francisco, 26 for $7 million we were able to leverage. the money is always out there if you are creative and willing to try new things. we have remarkable reforms. i have got to tell you one of the guys we are most proud of, we have taken some heat unfairly. that is my former chief of staff' who has seen a lot of strong support from labor and work with labor to come up with a remarkable and create a framework to complete the revitalize our recreation system. it is always focus a little more

on the park and not enough on the rec system. it is going to increase the number of programming by 20,000 hours, which is amazing. you save money. there are creative ways of doing things differently. it is not all easy, and folks will pick and choose what they want to focus on, but at the end of today, real people are going to want opportunities to get service, more than even last year when we have more money to spend than this year. i did not find it that offensive that he is doing bike rentals. i think it is a good thing. i do not find it offensive that he wants to do an antique market. that is a healthy thing, and we thank you for your support. that is going to generate

hundreds of thousands into the system. i think you understand this. you got a sense that we can raise more revenue and put out a culture. we focus on contract savings. this was important to labor. that is just being more aggressive in terms of our material supplies, cellphone usage, etc. we continue to do our best. we still have too many cars under management, and we are going to dramatically decrease the number of vehicles in the system. we are going to decrease by $1.6 million, the number of cellphones the city.

software licensing, we have new enterprise agreements. we have all new reform framework through the committee on information technology, nine new projects consolidating i.t. project 3 and one of these plans will save $5 million -- project. one of these plans will save $5 million in 18 months. our travel budget was cut, for some significantly. for some it was difficult to convince them they should not be travelling. office supplies, we reduced our purchases by $3.1 million.

we also made some staff reductions, and this was not easy, but it was a lot better than we expected. one of the agreements we made is that we would have the number of positions that would be eliminated -- we would cap the number of positions that would be eliminated. with this budget, we are looking at about 350, and we think we can get that down. we came in under the cap. we addressed the issue of managers, because we agreed that we needed to do more with managers commo. we made some choices that are reflected in this.

993 positions that are reduced in this budget, a number that gets more attention than it deserves. that puts our total number of positions at the lowest level they have been since 1998. we still have a lot of city employees. that number changes every day, and it gives you a sense that whatever we have done we are back to where we were in 1998. the chief of staff gave up wage concession. i did the same on top of not taking that wage. we reduced the size of all employees by 15.8%. since i have become mayor, we have reduced it by 25%.

overall, the number of positions redos to provide a framework of -- positions reduced provided a framework of savings. i am trying to give you a sense of how we got there. there are some controversial proposals here. many said you have seen, many that i know are difficult to embrace, but are important to have a debate about -- particularly when you consider what else we might have to do, but i want you to know those you are familiar with have been placed in this budget. there are no new surprises. we look for creative new revenue, and here is the

controversy. when i am looking at some of the cuts that were offered to me in the department of human services that i did not want to make, and i want to go through this for months, and i have worked on this more than anything i have ever done in public life. i have been working on this every single day for almost a year, and i went back and forth because i know the supervisors cannot stand this, but i cannot stand the alternative. this is a debate i want to have, because i think this is right. i believe we can generate $8 million of revenue that would go to our general fund contribution, to affordable

housing, and not have to make the equivalent cuts in discretionary programs that disproportionately affect poor people. i have been doing this 16 years. i still do not get the argument completely, except the ideological discussion. it is so ideological, i think it gets in the way of having a real discussion about what this is going to mean in terms of increasing revenue, not just this year, but in subsequent years, that can be used to help programs for poor people and working families. i know it is not going to be popular, but i believe it is an important debate. there is a loophole. if you both purchase these online travel companies, it is a good deal.

they go out and buy a bunch of hotel rooms for about $100, and a market it to you for $150. they pay the hotel costs on $100, and a pocket the difference -- they pocket the difference. that is a pretty good deal, and we think it is wrong. we think it is illegal, and it is called the online a hotel tax loophole. i do not believe this -- this is not a new tax. people already paying this tax were not collecting it. i want to thank him for his outstanding work on this. he has been an outstanding partner organizing this. thank you. he deserves credit.

beyond that, there are no new taxes. there are no new taxes in this budget. we were able to draw down $227,000 in revenue without tax increases. i know some folks prefer tax increases. i do not. i think they should be on the table in the absence of an alternative. i think it is sometimes dangerous to support tax increases that will reduce revenue in the meantime and not resolve problems we fundamentally need to resolve. by being creative and focusing on leveraging and looking differently at the revenue sources.

$345 million in capital is invested in this budget. we are investing close to a historic amount in repaving our streets. this is a big deal. supervisor mar and supervisor maxwell, $50 million. francia's for your hard work. we support this budget, and 150 will be maintained. we invest in new balboa park saw improvement. we invest in the veterans building and the work that needs to be done, and we are going to build on 10 key public spaces.

the water system improvement program is happening. transkei terminal is taking shape, and we're about to tear down the ugly of facility and begin the grand central station. the new terminal at the airport will finally be done. we have improvements at the waterfront. we have an opportunity to step up to the plate and right the wrongs of a generation. this presents itself this month. the hospital, real progress has been made, and if we are lucky and supportive to be able to improve our police stations and water system, we hope the folks

take a good look get that on the june ballot, so those are just 10 highlighted projects. thousands and thousands of jobs in this fiscal year with projects that will be supported by our capital plan with general fund contributions. work-force development is another big part. you cannot have economic development strategy without work force development strategy. we put in five new district we want to find. that will bring us to 15 at the end of the fiscal year. we have investments for three new marketplace initiatives. we have a new health care accounted for. supervisor maxwell has been working on it, and the academy

should provide additional work- force training. year is the news. summer employment for kids. we are going to increase the number of placements by 50% in this year's budget. this is a big deal i think. we got creative from 1100 to now over 1700 slots. we tripled the number of summer camps. this is not supposed to happen, yet we are getting creative. thank you for all the support she has provided, and you guys have been on this. everybody is asking what is going on with the summer programs, so thank you for keeping us in gauge. the summer youth employment

program will be -- keeping us engaged. the summer youth employment program will be enhanced. 3005 human beings have the dignity of work. thank you for his leadership. this is amazing. here is the good news. we just got the appropriation of of the house for enhancements. if the senate agrees, this is a staggering number -- if the senate agrees, we will draw down from $154 million into our local economy for. that is how this program is. over half of those are african americans.

i am so proud of that. this is a big deal to get started, so this extends to the entire board for the hard work on this. thank you, speaker policy, and thank you for highlighting this. after school for all will be a reality in this year's budget. that is of a deal as well. we will be 97% there with this budget carmen something that got -- with this budget, something i think we should be proud of. they create a new office of child care and early learning. thank you for their guidance and support. phase one will be the

consolidation of staff, and then we are going to get to phase two by the end of the calendar year, but it is an exciting reorganization. i know some have been particularly concerned about this. i know the president of the board has been worried about the cuts to children and youth programs. i watched a big portion of the hearing and got a good sense of the concern. it was not close to 30% cuts. hopefully we will work on getting this down. here is the good news. we went through a process. 200 independent people analyze the programs. this is an independent process, and i want to thank the integrity of the process and all

the community leaders, and we set a tear of priorities. -- tier of priorities. this proves if you show up, that is not all of these cuts, and i get it, but we substantially added back. i had about 40 kids who came to visit maine for the soccer league. -- visit me for the soccer league, and it is a great program, and we do not want to have to cut it. she was very aggressive about that.

we substantially put dollars back. these are just some of the programs. it is by no means an exclusive list. there are still cut off. -- cuts. we are looking forward to working with supervisor dufty on one of them. the problem is he calls about so many of those programs is so difficult, and he makes compelling arguments, so thank you. well-done. arts and culture, there are no cats. -- cuts.

i am proud of that. one of the first places we cut, the board will go through with some of these, but we cut some of these programs completely. there are some changes to the museum. they are not surprising. new york is proposing to cut 25% of its budget for libraries, which is amazing, and here we are, and the commitment that went down, but we are still able to do this. we're halfway there. this year's budget will have a

friend new branch libraries completed. two are brand new region will have eight brand-new libraries completed. -- this year's budget will have 8 brand new libraries completed. i want to thank you for are rarengaging -- for engaging the children's department. the work he did at literacy programs, summer reading enhancements. the director of libraries as an issue with some of the challenges in our libraries, and