>> all right, you guys. can everyone hear me ok? everyone? thank you for being here and welcome to the district got town hall meeting to talk about our budget this upcoming year. i want to thank everyone for being here. oh! ok. is that better? [laughter] thank you. >> that is our supervisor. supervisor farrell: that is right. i wanted to introduce the people on stage. the mayor has -- needs no

introduction. i'm going to quickly run through our agenda here. [applause] as many of you know, captain ann mannix the captain of our police station, phil ginsburg, and another round of applause for our mayor, ed lee, greg sass is here, the cfo of our department of public health, and greg, the mayor's budget director. so, just to give you a quick rundown, we are going to start with the mayor talking about opening remarks about our budget and principles coming up this season. the budget director will spend 10 minutes giving you an overview of the budget process

in city hall and telling you what we're doing in this stage of the game as we're getting prepared. then we will have an hour of questions from new. this is your chance to ask your questions to mayor li and the other members of staff who will be here tonight. you can talk to me at any point. i want to make sure we take advantage of having a dialogue with the mayor tonight and the of the department's staff went might not be able to talk with on a daily basis. with that, i will say thank you for being here and turn it over to the mayor. >> thank you, supervisor. the evening, everyone. i will be very short. i am here to listen to make sure you all have quality input into decision making. i do want to say this.

the last three months, it has been a joy working with supervisor mark farrell. fresh ideas, a lot of energy. i am looking forward to working with him on business. it is all about jobs. we have got to change the city's culture, make sure we are talking the same talk. and to get people quality jobs, we have to have a good business climate. i am very fortunate to have district 2 represented by mark farrell. [applause] very simply, we've not had any confirmed decisions on the budget, but i have bought $3.6 million gap that i have helped plug with the great budget team and the department heads and your input. this is the fourth of 10 town halls on the budget i promised to hold. i have one tomorrow and combined

two on saturday and several more next week and then we start making hard decisions, because it is not easy. part of the reason it is not easy -- as we will find out -- it is not just the services. we are killing ourselves with an -- with the runaway pension system. so, i am cooking very hard to plug that -- working very hard to plug up. every week, i need with our labor unions, with our comptroller. we will get to the point in a few weeks that the labor unions and the board of supervisors will a great what we have to do to correct this long term so it does not give us the way it has this year, to the tune of 125 additional -- $125 million.

there would not be a reason to hold these town meetings. i have got to fix that problem and listen to our neighbors telling us what the priorities are. and that is what we are going to do tonight. i have given principled instructions to the departments. i want the city to be safe, safe in terms of the public safety sense, and safe in terms of the agreed upon core level services, the social network safety services we provide. i want our city to be safe and solvent. and then i want the city to be successful. that means doing the things that brought you all here to make the investments in your homes here. you came here for a reason. you love quiet when it should be quiet and noise when it is going

to be noisy. >> detracts -- within this, there are a lot of decisions to be made. we will be meeting with many groups in the city, from community-based agencies, neighbors like yourself. i sought to make some hard decisions. well we had a $520 million gap a few years ago, we got to the bone of where our government is and is that good enough? no. we still have a gap. we have to make more cuts. can everybody hear me?

all right. i am here to listen to you. maybe i will give you some answers. it is great working with a board of supervisors that is civil, that is not -- that is less about political stances, because they know they cannot get anything political out of me. i am not running for office. i want to have the best city we can possibly have and make sure we can trust you. for many years, people have not trusted government to do anything well, and i have got to support -- i got to improve that. i will continue to do that. when this is over, i will get to live with all the decisions i have made.

a lot of you living out here. i want you to enjoy that, because it is a once-in-a- lifetime to have the mayor here. will be great beneficiaries of it. and then local hires -- one of my big principles of support as well. i need san franciscans hired. i need them to have jobs. you want your kids to have good jobs. they can do those jobs. that is why mark and i tteamed up. we just signed midmarket legislation to keep twitter in town, and they are going to hire san franciscans. 65% of their work is done by sentences and. did you know that? i want them to continue doing that so you can have that

environment to choose from, and many more companies will come forward and be here and growth here as mark and i and others work together on making this town much more business friendly. thank you very much. [applause] first tee thank you -- supervisor farrell: thank you, mayor lee. before i turn it over to greg, let me just say -- i am going to call up one at -- call up three at a time people who submitted speaker cards. mark, bill bowen. if you want to come up here -- maybe you left to stand for a few minutes. but that, i will turn it over to the budget director.

>> thank you. thank you for your time. can you hear me? do i have an upside down? there we go. ok. as supervisor farrell said, i will talk a little bit about our budget situation and what we will see over the next couple of months and years. i will try not to bore you with the details, but please feel free to ask questions if there is something i do not cover. the position we're in right now is we have a $306 million predicted general fund deficit for the next fiscal year. that is actually a little bit better than in december when we made our initial projection. we projected a deficit of $380

million. it is still a substantial challenge for us to make the decisions about how we're going to balance the budget. just to put that in context, as we often hear people say -- well san francisco has a $6.5 billion budget, billion with a "b." there are several pots of money in our budget. there is the general fund, which is where general taxes ago. that pays for general services like the police department, the rec and park department. of our $6.5 billion budget, a little more than half is in other pots of money -- the airport, public utilities, muni. they generate revenues by and

large to pay for themselves. they are balancing their own budgets and they are not factored into the deficit. so we have a $3 billion general fund and a $300 million deficit on the general fund. furthermore, within the general fund, we have various requirements we need to pay for before we start balancing our budget. those are within the general fund that are locked in. one of the critical ones mayor lee mentioned our pension and benefits costs. we have the obligation to our employees to pay those costs. those expenses are locked in. we also have various voter- approved spending requirements, many of which are for services we all value. we have minimum staffing requirements at our police department. we have funds locked in for our

libraries, our children's programs. once you factor that all in, are $6.5 billion budget, only $1.3 billion is money that is flexible. it is not locked in by one of those requirements. it is a small, relatively small part of our budget we have to work to balance. our deficit makes almost a quarter of are flexible discretionary fund. it is a significant challenge for us. the way i would characterize where we are right now with the highest level is, as you well know, just from reading the paper, a lot of respect things are looking up. we are seeing signs of life in the economy. things of started to stabilize. that is what we projected. we are starting to see the economy rebounds. it drives our tax revenues.

we're seeing a little bit of a stabilization compared to the last few years when our tax revenues dropped. so we're leveling out in that respect. the other thing that is happening is on the expenditure side. we have significant growth in our city expenditures. again, one of the biggest factors in that is the cost of our employees contributing to our pension fund and paying for health benefits. that is growing at a very quick rates. as we look out at the next several years, what we see is even as the economy recovers and our revenues trend upwards, our expenditures are going to trend upward faster. so even as the economy recovers, we project unless we take action, we will continue to have deficits. that is just a big picture on

where we are. in terms of what is coming next , our next three months, we will be balancing the fiscal year 2011-2012 budget. by june 1, the mayor has to make the decisions about how he is going to balance his budget. then he will send the budget to the board of supervisors. and they can make amendments to the mayor's budget and make changes, and then they send it on to the full board of supervisors for a vote. there's going to be a lot of decisions to be made and a lot of discussions about how the budget ultimately turns out at the end of that process. the other thing we're in the middle of i think is important to point out -- in a lot of discussions with supervisor farrell.

we talked about some of our long-term financial planning experts. he instantly asked some really thoughtful questions and we have had good discussion. i am looking forward to working with him on that. but we are doing several things to try to take a longer-term look at our cities financial picture. we budget right now one year at a time, so we tend to make not necessarily short sighted decisions, but our frame for a horizon is one year out. starting this year, we will issue five-year financial plans for the city. our office is working on developing that now. so, that is the board of supervisors in the beginning of may. that will be one thing to help us longer-term. and then starting next year, we

will have two-year budgets instead of one-year budget. we're starting to try to think longer-term. that will be one of the things mayor lee has been pushing us to do, not just think about this year, but think about what our city's financial condition is going to look like in five years when he is back in the city administrators chair. there are a lot of discussions to come, a lot of decision making. any thoughts you have, we appreciate your time and look forward to hearing your thoughts. thank you. [applause] supervisor farrell: thank you. we appreciate that. so, we're going to have people come up and ask your questions. you can ask it specifically or generically. i am going to hand out the microphone. i want to thank the folks at

sfgtv. behavior cells. you are streaming live on the internet right now. and you will be replayed on channel 26. please step up to the microphone. >> my name is serena bardell. i have lived in golden gate valley for -- i won't say how long. i am on the board of the golden gate valley neighborhood association. it is the historic name of the area. so, it is the eastern side. this is not directly budget- related, so i do not know if it is a fair question or not. it is a painful question because i do not like being called --

for the last year, our meetings have been taken up with the conflict between the places on union street that are extremely noisy, starting early saturday mornings and going late into the evening, and people who lived nearby for anywhere from 20 to 40 years, and that includes a founding member of our group who lives in apartment with double pane windows about half a block away from union street. so, how does one deal with this when it is a neighborhood commercial district, not a commercial district? how does one deal with the desire of young people to raise hell and get drunk? and people just being able to live in their places or work at home or something like that. and what can the administration

do to encourage the commission and the planning department to be a little more sympathetic to people's lives. these are not just new areas where people may choose to move. how do you deal with this conflict without ending up being hated by everybody else for being an old fogey. sorry to take so long. supervisor farrell: one of the great parts about mayor lee is he has a better grasp than almost anyone about our different departments and our role here. as you probably know, mayor lee, district divide is concentrated in four commercial corridors and there is a balance we have to strike. maybe this is not budget

directed. everything is fair game, but we want an opportunity to talk to the budget tonight. we encourage those questions. mayor lee, do you want to comment here? mayor lee: thank you. the answer is a combination of our entertainment commission and our police department. the role of the entertainment commission is that any venue license to have any kind of music, entertainment of any sort, if they exceed the decibels letter permitted, then a complaint may be filed with our police department, who enforces that noise ordinance. if there is a consistent venue in your neighborhood that is because of a continued level of unacceptable noise, you must appear before the entertainment commission and talk through what the venue is doing or not doing

properly. we will look at whether or not they are exceeding those noises. we have inspectors under the entertainment commission who can go out during the times of entertainment, even if it is the middle of the night. we have to do that on broadway, south of market, others. we have beefed up the staff and the procedures of the entertainment commission. so, we can in force and pull the licenses of those entertainment venues. we would be exceeding those limits. but the police commission is working very closely, the police department looks very rigid works very closely with the police commission. i do not know if the captain would care to comment, but she can tell you what happens there if you would like. those two agencies -- and then i will take a careful look with the entertainment commissioners to make sure they are doing their job, making sure they are

enforcing the current laws and the current maximum decibels that can be a limited for those venues. >> first of all, let me just say -- can you hear me? please call if you're being disturbed. we will investigate. in a situation like that, if we see it is a problematic situation, we will call the entertainment commission. we do not have the tools the entertainment commission does to actually find where the bar is operating. it is kind of a complex term. we can facilitate -- it is a little more complex. it is definitely something we can all work together on to make these businesses fit into the community better. for instance, we had a karaoke

club operating on fillmore street that was a problem. i was surveying what was going on. they did not have any permanence. they applied for those permits. it is cooperation, and and we do have corridors in the area like that. again, we need to all work together and make it more hospitable for you. mayor lee: call 311 and asked for the entertainment commission director. you can call her directly. she is very responsive. or you can call the police department here if it is something happening right away and you have to get some sleep because you have to get early -- you have to get up early in the morning. supervisor farrell: thank you.

if you want to ask questions, please feel free. there are cards in the back. i will sift through these at random. art, if you are up next. >> it is a privilege and an honor to be able to talk to your government, as you have provided this opportunity here today. i have asked this question of mayor lee before in another forum, so maybe the health department person or the budget department person can talk more about this. we often hear about -- there is this a huge gap between rich and poor in this country. and there is more and more calls for taxes of the wealthy, at the state and the federal level. this is a generous city. it is a compassionate city. and yet, we have a lot of people suffering. as a parent, i feel privileged

to live in this district. i think some energy and intelligence and creativity needs to be applied to the problem of how do we ask those of us who have more, especially those who are in the forbes 400 list, billionaires'. and when i mainly here is about tax cuts for entities. when it is appropriate, sure, give a tax break. it is also inappropriate time to ask those who have the means to -- it is also an appropriate time to ask those who have the means to share. we want the city to look good. we wanted to be a fun city to live then. it takes money for us, and it takes money for everybody who lives in the city. not just those of us in district two.