>> we're going to start quickly so that people can speak out on the budget issues and protecting services to our neighborhood and city. i am eric mar, supervisor for the richmond district. this is the eighth of nine budget hearings that the mayor and department heads have been too. we will do our best to have maximum participation from the audience. the mayor will be giving some remarks. the department heads are here to respond to questions as well. the important part of it is you speaking out and talking about the needs of our community. we have translation services in spanish and cantonese and maybe

other languages. i want to ask the translators to make an announcement in case people need the translation services. [speaking foreign language] [speaking spanish] a wanted to thank them for being here. i want to quickly announce who is up here and who we are expecting later. besides mayor lee, we have greg wagner, the director of the mayor's budget office will give us a short presentation. we also have the head of the department of public works and ann from the department of aging services.

we also have someone from the wrecked apartment. we also have the director of small business in the city. -- we also have someone from the recreation department. we also have the director of small business in the city. very soon, we are expecting ed harrington from the public utilities commission. we have carla johnson from the mayor's office of disability and maria from the department of children youth and families who will be coming shortly. i will hand this over to mayor lee who has been to eight other budget meetings. there will be one more after this. >> thank you, actually there ruby two more. one supervisor decided not to. been hurt everyone was going to do it and decided to added on. -- 1 supervisor was not

planning to do it but then heard everyone was doing it and decided to add it on. i am enjoying these town halls. -- there are two more of these meetings. i am enjoying these town halls as a resident. i know is important to people here, raising families. i have had the privilege of this great city. i want other people to enjoy the benefits of the city. i am working really hard this year as mayor. hopefully, we will set a different standard and tone for you to feel you can trust and work with your government. i have been very enthusiastic working with each of our supervisors. i never want to have a government where the mayor does not talk to the supervisors and vice versa. this city once a working government. i know that. that is what my 21 years has been all about. it has been about getting things

done. tonight, we'll listen to you. we listen and take it back. when we make decisions, we will make it with that input. when it comes to the budget, our departments are working closely with me. no major decision has been made yet. we are making sure that the input from every corner of the city gets heard so that we can have the information when we make the big decisions. there are clearly directions being decided and pushed. i want to let you know some of the basic principles i have shared with the department's, commissions, and board of supervisors as we started the process several months ago. before i do that, i want to give a shout out to all of the departments that are here. i want to thank our civic engagement staff.

that is something i got to start as a city administrator with the support of the board of supervisors. we want to make sure everyone is heard whether english is your natural language or not. everybody's opinion is important. i want to make sure i understand those who speak spanish, chinese, cambodian, vietnamese. that is why we are out here. that includes russian as well. i want to let you know that i have been a resident of richmond when i was a law student and taking the bar exam. i have fond memories. i only have to take the bar exam once. that is because when you live in richmond, you can think. you can do your exercise. you can feel safe. you can get some things done. there are not a lot of things that bother you. you can do what you need to do and be a good president. i only took the bar exam once.

i always felt like it was because of the richmond neighborhood. i got the bar exam done -- is one of the hardest part exams in the country, by the way. i gave some simple instructions to the city department heads when we started looking at the $306 million gap that our city is faced with. the three principles are shared is that i want the city to be safe. i wanted to be safe in the sense of public safety. we want safe neighborhoods. we want our kids to grow up without fear, be able to go out at night and come back in one piece, be able to feel safe for the seniors -- safe in that respect. i also want the city to be safe with the core level of services that we have traditionally provided to our seniors, youth, vulnerable communities.

that naturally means that having a safe city is one of my number one priorities. i shared that with the departments. i also want the city to be solvent. we have to have programs that we can pay for and afford to have. in the discussion about having a solvent city, one of the reasons why we have a $306 million deficit is because more than 1/3 of that is increased costs in our pension contributions and health care costs for city employees. that is unfair to all of you to have a pension system that cannot pay for itself. it is unfair to the retirees. they want a dignified pension. they put in their years. with that imbalance, i have

committed that as your interim mayor this year, we will have something on the ballot that makes sure we take care of this for the long term the increase in the costs will be paid attention to and we will have a system that is solvent. we have to balance the budget. we want to make sure we have programs that are efficient and represent the best that we can provide. then i want a city to be successful. that is the last principle of shared. what brought you here? what made you live in san francisco and the richmond district? the weather? that might be something we cannot take care of but maybe we can influence. what also brought me to the city was being a part of great, diverse neighborhoods. you can do to richmond, sunset, the mission, chinatown.

you have so much diversity here that makes you feel welcome from all different parts of the world here in san francisco. you also have a keen nightlife. you have the greatest restaurants. you have an international city that welcomes terrorism. it has conventions of people that come here and they love the city. they love the restrooms, entertainment, the venues we have created. they also love going to the small neighborhood corridors with wonderful businesses. i was just at the bazaar cafe. it has great food. you feel comfortable. people like that. that is why they move to the

city. we have had investments in education that made our city successful. i never want a city that abandons its education system again. we submit millions of dollars to our school district. we have seen other cities fail in that mission. they thought the school district was a state system and had nothing to do it. this city does it differently. that makes our city successful in different ways. i want our son to be safe, solvent, and successful -- ouone -- i want our city to be safe, solvent, and successful. i suggest to you that we have a new level of conversation at city hall. it is welcoming of a good business climate. weak balance that with the services we need to have. we will make sure -- we will balance that with the services we need.

we will balance that with the services we need and the challenges we have. having said that, the three ended $6 million deficit is hard to fill when we do not have all of the economic solutions. -- the $306 million deficit is hard to fill when we do not have all of the economic solutions. we still have nervousness about the state and federal governments will do that might make it worse. we have all of that. i depend a lot on the city staff to help me figure this out to build in some reserves that we can use in case things get out of hand so that our own budget and reading can be presented in an honest way. i know what brought you here tonight. i am willing to listen to every one of your opinions tonight and make sure that we have been reflected in a way to balance the budget. thank you for your precious time coming out here. it is great to be in richmond. [applause]

>> before i welcome greg wagner, i also wanted to knowledge that there are quite a few community-based organizations here. a number of our nonprofit community-based organizations met with mayor lee and myself to talk about the needs of the richmond district. but has beethere is also the plg association for the richmond organizing project, keep our neighborhoods clean, transit rider reps, and people from different ethnic origins stations organizations. we will have cards and a del.

if you do not want to speak at the microphone to make a point or ask a question, you can fill it out and give it to my staff. les will take the cards. we will do the best to read the questions for you. without further delay, greg wagner is the director of the mayor's budget office. >> thank you very much, supervisor mar. i think we have power point on here. sorry about that. i will be brief. i want to take you through a bit of what the financial outlook is for the city and the challenges we are facing as many decisions to balance the budget. -- as we make the decisions to

balance the budget. where we are right now is san francisco has a projected $306 million deficit. in our city charter, we have requirements that we have a balanced budget every year. unlike the federal government, we cannot run a deficit. we can not print money. we have a requirement that the sources coming and matched the uses going out. next year, we are projecting a little growth in our revenues, about $37 million. we're also projecting about $344 million growth in our expenses. when you add those up, the differences are $306 million in projected deficit. as you are probably all aware,

we're starting to see glimmers of hope in the economy. the city tax revenues that we used to provide the services of the departments to provide are dependent upon the economy. when the economy is down, our city revenues are down. when it recovers, our revenues recover. we're starting to see some signs of hope in the economy. over the last couple of years, we have seen large declines that led to large budget deficits. it looks like things are stabilizing. we are projecting over the next several years we will have a slow, stable recovery in our economy. that is the good news. the bad news is that it is just the beginning. relative to where we have been the last couple of years, it is good. we have a long way to go before the economy is really humming

again. on the expenditure side driving our deficit, we have some real long term issues we need to address. the biggest is the growth in our employee pension and benefit costs. that is driving the deficit and will continue to grow for the foreseeable future unless we take some action to correct that. to put that into perspective, we have a $6.5 billion budget. people may ask why a $300 million deficit is a big deal. within our $6.5 billion budget, we have a lot of distinctions about where money comes from and

what it can be used for. the biggest distinction is what is in our city's general fund versus the non-general fund. the general fund is where most of the tax revenues go. it is what we used to pay for police, fire services, cleaning the streets, many of the health and human services programs, programs that do not generate their own revenues. within our $6.5 billion budget, only about 45% of that or $3 billion is within the general fund. to further complicate things, we have a large number of spending requirements. we have the pension and benefit obligations. we have made a commitment to our employees to provide a benefits package. we are obligated to pay for that. we have federally mandated programs we need to pay for. we have voters approved spending

requirements where we allocate a certain amount of the general fund to the libraryies or other worthy services. those chip away at the flexibility we have to balance our budget. at the end of the day with another $6.5 billion budget, only about $1.3 billion of that is flexible, discretionary general fund money we have available not committed to some purpose that we have available to make big policy decisions about on how to balance the budget. that is approaching 1/4 of our flexible discretionary fund money with the $306 million. it is a significant challenge. it will require hard decisions over the next couple of months.

the biggest recipients of the general fund and why you hear them discussed frequently in our deliberations are on the screen up here. the core public safety programs, police and fire departments, the sheriff, the cork county programs that are basic social safety net programs of the health department and human services agency. all of the department's here are affected in some way by the pressure on the city's finances even if they are not part of the general fund departments. we've bounced departments to propose ideas -- we have asked the departments to propose ideas about how we can reduce things. we announced them to add 10%

reductions. we are in the process of looking at the ideas they put on the table to make decisions about which of those we can and cannot live with as we balance the budget. that is the process happening now. the long-term outlook for the city -- the economy is beginning to recover. when we look at the longer-term horizon, we see a familiar picture. even as the economy recovers and the revenues get better, costs will continue to grow at a faster rate. a lot of that is attributable to the growth in employee costs. the numbers of the bottom of the screen are the deficit projections for the next three years. they are projected to grow. it is not just that we have

continuing problems ahead of us. the message is that we need to take some actions to correct that. if we do take some actions and make some decisions now, we can bring those numbers down in the future. it will require a lot of difficult decisions that we need to make to start correcting our structural budget issues. i will leave it at that. i am happy to answer any questions. >> thank you. if you have cards, you can hand them over to les. i want to thank kirsen and her staff for making this town hall successful.

we have the general manager from the public utilities commission and greg from the department of public health. we have the police chief. we have the mayor. we have the general manager from the parks and recreation department. we have the director of the department of aging and adult services. we have the public works director and the mayor's budget chief and director. please come up to the microphone or fill out the cards. we are asking people to keep your comments short and no more than two minutes so that we can have as many people speak as we can. >> [unintelligible]

i live what i call outside. i have a couple of comments about consolidation. there was a report about the police consolidating some stations. i heard that at the police commission. i have never heard that out of the mayor's office or the board of supervisors. i have heard about consolidating fire stations. it is a hot topic. i think you should bring it up again. the mta wrote a report about consolidating different public transportation systems and i have never heard that talk about. mr. mayor, maybe you can consider that. [unintelligible]

[laughter] >> what did i do to you? >> you will find out. [laughter] i grew up here in the 1950's. i came back and it is still just as bad as it was out here. i am a retired city worker. i wanted to talk to you about the pension proposal. i think he should have a town hall meeting with the retirees. i think some of them would be willing to talk. i think you should listen to them and understand how your proposals will impact the retirees. your proposal will affect the low-paid workers and those who retired in the 1990's. they will be the lhardest hit.

you go to the meetings. right now, there are two retirees and two active. it is not worth the effort to change it. the day i retired -- >> those are a number of questions. thank you. >> that was quite a few. let me begin with the consolidation. they are ideas that have been expressed by those departments. they are being fed to greg and his team. some will work out and some will not. we're taking a hard look at the ideas about consolidation as well as other ideas to save money. i will take the opportunity to let you know that police and fire are going to share in the

cuts we have to balance the budget. they are coming up with ideas. they're coming up with ideas to preserve for services and make sure the city is safe from the fire and police perspective. the ideas are not presented in detail because they're just presenting concepts. they will choose which ones will continue with a high level of service and safety we need. that is why you have not heard more detail about that. when it comes to muni, i will let the head of muni speak to that. i will bring back any questions to them and make sure that they get answered. they are consolidating some of the bus stops so that they will not be on every block in order to save time and money. there will be other consolidation ideas coming from

them. i just talked to nat ford this afternoon. they believe the deficit will be covered with the things they are negotiating for the first time with the labor unions as well as the efficiencies they have been implementing. we should have a muni that is not imbalanced as far as the budget is concerned. we have been in meetings with retirees. we keep them informed. we know our legal obligation to them. we have known that from the start. we have to start to design solutions that will continue our legal obligations for those already retired and also make sure they are not going to be the people that we resolve everything on the backs of.

they deserve better. it is our commitment to do so. >> the general manager for rec and park reminded me we should thank the great staff from the richmond center. >> my name is herbert weiner. i am a retired city employee. if you are not on the bus, you are under the wheel and every writer -- rider left behind. i want to voice my opinion about pensions. i am concerned about eliminating what affects profit sharing. this will seriously impact city retirees. it will also impactth