you have all whole district of representation, my dear. we want you to listen clearly. [unintelligible] obviously, a lot of folks are not here today. we want to make this clear to year, -- to you, that as a representative of the people, you do not say that about who supported you. because you do not know the supported you. that is what it is all about. it is about hanging around with people. you do, with your energy and your intelligence and durability -- your ability, you

have an opportunity. this specific location and most homeowners, if you have the ability to change things. 4 x 4 with concrete grass to places with families and development. i look forward to working with you. that is what brings you here. that is what takes you out. i love you. supervisor cohen: thank you. let's work together. thank you, everyone, for coming out tonight.

[applause] supervisor wiener: we will bring our city family of on to the stage. everyone, thank you for being here tonight. in your district 8 supervisor. [applause] thank you. we are -- first of all, i want to thank mayor lee, who has been doing a series of the town hall meetings in different districts because it is so important, especially in this extremely difficult budget year, to make sure that as a city, we are communicating and interfacing with the community as much as possible. i appreciate mayor lee being here, and i appreciate all of you coming out tonight. i want to thank mission high school for hosting us tonight in this beautiful building in this great location.

susan from the mayor's office disability, for helping us out, as well as the mayor's office of neighborhood services. i will also want to of knowledge the mission high school wrestling team, which was here earlier, which is doing really well this year. was not able to -- the team partnered with the eureka valley recreation center and golden gate wrestling club and went from doing really poorly to be invoiced to when the city championship. so we are really proud of the wrestling team. [applause] this is going to be a really simple format tonight. i'm going to turn it over to the mayor, and he is going to speak. as well as greg wagner, the mayor's budget director, to talk about the mayor's budget to talk about the budget situation.

you will hear briefly from a number of department heads, and after that, we will have questions from members of the audience and whoever is the appropriate person to answer the question. that said, why don't we grabbed the microphone here. turn it over to mayor lee. mayor lee: thank you. good evening, everybody. i am not too prone to give long speeches, so that is probably good for you and me. anyway, i want to thank supervisor wiener for hosting this tonight. and for all the department heads that are here. i know there is probably commissioners here as well and other friends. by the way, i am a resident of district 8. supervisor wiener is my supervisor, and i always look up to him. anyway, you know, this city has

had a few years of pretty hard economic times. you know that. i have known it. there is no magic in the way we balance our budget. we have to do it with both a combination of efficiencies and cuts, and we are trying to identify as much rational revenues as we can, but ultimately, we will have to make some decisions that will affect programs that you might feel very dear about, and we are trying to approach those questions in the most open and transparent fashion as we can, so i do not mind hosting with the supervisors a number of these town hall meetings so we can get out to hear what you believe would be the core level of services that the city ought to be providing. i do not mind that. this is the fourth of 10 that i have committed to. i think it is important that the

mayor be out at every single district as possible, working as closely as we can with our supervisors to make sure that our ears are open and ultimately our hearts are open to all the things that you need to help this city to make it run as well as we can. i gave out very simple instructions to the departments and commissions. i want the city to be safe. not only in a public safety since, but also in the core level of services. i want the city to be solvent. that is, that we pay for programs that we can afford. that also means that we work really hard on making sure that we reform our pension system. right now, as we face our budget deficit of $6 million, a good third of that is the increased cost in our employee benefits. so we have to mean that in. i do not think we would be here tonight if we had a pension

system that was solvent. finally, by what our budget to be reflective of a city that is successful, that is all the things that we enjoy, that attracted all of us to buy our homes here, raised our kids here. a successful city means we can continue attracting people to be year, to have strong neighborhoods, resilient neighborhoods like district 8, make sure we are doing everything we can to make our neighborhoods successful, along with all the other attractions that we can afford to have. a safe city, a solvent city, and a successful city are the themes i have given our departments to work with. and as we go through the balancing our budget, i said at the outset, there is no magic to it. we have to make some tough decisions coming up. after we make those tough decisions, is like going to be any easier? nope. the governor has plans to realign things that going to

hurt us. i do not believe for one second that realignment means it comes with any funding to realigning burdens that will come to us. then the federal government is going to get there. we have already seen the community block grant funds that were going to be heard in many different ways, so we are bracing for that, trying to come up with ideas to make sure our cities survives and survive as well. with that, no more speeches. i am all ears to your concerns, making sure the you know we are working closely with you and your supervisor to make our process transparent and sensitive to all the ideas that you have. thank you very much. [applause] supervisor wiener: thank you. now, why don't we hear from the mayor's budget director? >> thank you very much, supervisor. i want to quickly go through a

quick summary of where we are in our budget and give you a sense of what the problem is that we are facing, which ultimately is the reason that we are here tonight and is the cause behind the challenges that we are facing. so if you could just jump in, melissa. unlike the federal government, we do not have the luxury of operating in a deficit. we have a requirement in our city charter that is ironclad that we balance our budget every year. that means that our sources, which is the money coming into our budget, half to equal the uses, which are the expenditures in our budget. right now, when we look ahead to next year, what we see -- and it is a little bit hard to see on this screen because the sources is blending into the background, but we had a little bit of good news on our revenue. these numbers are when we compare the current year to what we're going to see next year.

about $37 million of improvement in our revenues, and i will talk a little bit about why that is, but on the expenditure side, we see $344 million of increased expenditures if we just continue our current level of operation. the impact of those numbers is that we are facing a $306 million general fund deficit for the coming year. next slide. the big picture for us -- it has been a tough couple of years for the city, as you all know. it has been a tough couple of years for all of us individually in the city, struggling with the economy. we are starting to see some signs of hope and good news out there in the economy, but we are in the very early stages. the city government is, of course, depended on tax revenues, which are driven by economic activity. when we look out into the economy, we are starting to see things stabilize. we are not seeing the big losses that we have over the past couple of years, but it is the

beginning of a slow recovery, so there is some good news out there, but it looks like it is going to be a slow recovery that is going to happen over the next couple of years. also, while our local tax revenues are recovering and while our economy is recovering, we also are taking a loss from the state and federal governments, as the mayor said. they are cutting revenue to local governments as they try to balance their own budget and deal with their issues in washington and sacramento, so that is taking away some of the good news that we are seeing locally. on the expenditure side, as the mayor pointed out, one of the big issues we face in the coming year and that we will continue to face over the foreseeable future is that we have growth in our city expenditures that is outpacing our revenues, so we will see continued deficits if we do not change things. the biggest single contributing

factor is the growth in the cost of employee benefits. pension costs are chief among the spirit as the mayor said, the issue of pension reform is going to be front and center for bringing our budget back into balance over the long term so that we do not have to do this year after year where we're going back to our departments and asking them to make reductions. just to put that in perspective, a $300 million budget deficit -- what does that mean for the city? next slide. within our budget, we have a $6.5 million budget, but within that budget, there are different categories of spending. a little less than half of our budget, or about $3 billion, is in the city's general fund, and that is where we pay for a lot of the services from the departments that are here tonight. our public safety departments, our human services agency and health departments. that is where our tax dollars go, and that is where we have

the spending for those services. but within that $3 billion, we have a lot of restrictions. we have, as i said, our requirement to pay for pension costs, for other employee benefit costs. we have a voter-approved spending requirements. we have a number of restrictions, and when you add them up at the end of the day, we have $1.2 billion or $1.3 billion of truly flexible money left in our general fund budget, so our $300 million deficit, when you compare it to that 14 $3 billion, is a very significant issue for the city. is about a quarter of our discretionary general fund spending. that is a real challenge for the city, and that is why we are here tonight. as i said, the biggest departments in our general fund and, therefore, those that are facing some very serious challenges, our core public safety and social safety departments, the police apartment, sheriff's department, and fire department.

health department and human services agency are our core county functions. those five departments together are about 3/4 of our discretionary general fund city in the city. we have asked the departments to make expenditure reductions or increase revenues totaling 10% and another 10% contingency. none of us or none of the department heads here on the stage are enjoying this process, but those are the instructions that we have had to issue to meet this challenge. we are trying to do it in every way possible to minimize the impact on services to residents as we do that, but it is a big challenge, so we are really hoping to hear your thoughts and feedback on how we can do that and on the proposals that are out there tonight. just one last point, to emphasize again, even though the economy is recovering, we do have some longer-term financial

challenges for the city, and we're working very hard to try to address these as the mayor said, so that we are not back here every year, doing the same thing, going through budget deficit after budget deficit, and that will mean we will have to look at some long-term approaches to our budget. pension reform, as i said, is key among those, but also, we are starting to look under the mayor's direction at a five-year financial plan and trying to take a little bit longer of a view of our financial horizon. with that, i will just close up, and i look forward to your thoughts, and, you very much, supervisor, for the opportunity. [applause] them and thank you. now, we are going to hear from several department heads who are going to speak very briefly, just two or three minutes, to give you some information so we can get quickly to your questions.

we will start with phil ginsburg, the general manager of rec and park, and we are right next to one of our most amazing parks. >> thank you, supervisor. it is a pleasure to be here. you will hear from all of us tonight about a lot of challenges with respect to our budget. rec adn park's -- rec and park's budget has been in the news a lot lately. it is a great joy to have the pleasure to stored our system, but our budget challenges are really profound. over the last seven years, we have been asked to find solutions for over $43 million in general fund support for our department. we have had a couple of simple principles that we have worked with the community and our commission on, and one is that we prioritize revenue over cuts. we recognize how much our community need our services.

they need healthy, safe, structure places to play. we all need that. it is critical to life in a dense, urban city, so we prioritize revenue over cuts. we do not want to cut staff or our programs. we what our pool and recreation centers open. then, we want to make sure that our parks remain clean, safe, and fun and that we have healthy, active, recreational opportunities for all of sentences go, regardless of ability to pay. that is how we prioritize and make our budget decisions. we have made some tough decisions in the last couple of years, and they are starting to bear fruit. our efforts at prioritizing revenue. i am pleased to say that i think this year, even though we have budget challenges, we are going to be able to solve them without laying off our staff and without further reductions in our program. quite the contrary, we are headed very much in the other direction, expanding summer camps and recreational program

offerings. specifically for district 8, and i will stop in a second, there is so much good news. there is so much good news for this district, particularly on the capital side here yesterday, we would just awarded $5.5 million to rebuild and revitalize the nature center at the randall museum here it is an incredible project that we are very excited about. [applause] i believe this week, we break baird had mission playground, where we are going to have a beautiful new soccer field. we will make improvements to mission pool and create a new children's play area. [applause] next week, the rec and park commission is expected to award a contract to the lowest bidder to get the delors park playground project off the ground, which will break ground in may and be concluded in december. soon thereafter, we will invest another $11 million to revitalize and rebuild dolores park, and we have another $6 million or $7 million in glen

canyon. on the capital side, there is so much good that is happening. on the recreational program side, we have special programming going on. we have some great stuff happening. tomorrow night at harvey milk, we have a great exhibit, and saturday is dov best in both parks, so there is a lot happening. thank you. >> next, we are going to -- supervisor wiener: next, we will hear from the director of public works. >> thank you, supervisor wiener, mayor lee. i am not a district a resident, but i lived across the street. regardless, i do look up to scott wiener. the parts i go to, the libraries that i go to are largely in district 8.

the department of public works has two main areas of responsibility. one is the design, construction, and repair of police and fire stations, hospitals. that work is largely -- the work we do is largely capital-funded, thanks to the generosity of the voters and past elections in supporting general obligation bonds. we actually have a lot of good work going on. we are opening several libraries this year. we have a week -- we got the second parts bond past eight years ago. we finished laguna honda hospital. we are now building a new police quarters in mission bay and renovating more than a dozen fire stations around the city. good news on the capital front. the other area of responsibility for the department of public works is the design, construction, repair,

maintenance regulation of the public rights of way, namely the streets and sidewalks of the city. the picture is not as good. in terms of the capital side street resurfacing, the mayor and board in the last few years have made significant investments, but we do not have a sustainable source of revenue to continue improving the conditions of our streets. the capital planning committee approved in the proposed capital plan that went to the board and was approved a general obligation bond for this november, november 2011, to provide funding for us to reduce the backlog of street repairs. if that gets on to the ballot, look for that in november as a way that would help us address the street repair backlog, which the capital plan then recommends, following up with an additional ongoing revenue measures, so that we can start maintaining the streets at the level we should. on the maintenance side, i came to this job three years ago.

in that time, we have lost 100 people off of the streets, due to budget cuts over the last few years. these are the people picking up garbage, keeping the streets clean, abating griffey, trimming trees -- a bidding -- abating graffiti. those are the areas we have worked really hard to preserve services where we can. we only cut front line services after we have cut materials, supplies, managers, admen support, vehicles, workers' comp costs, which we do everything we can to preserve those for online services, but we are down to a point where it is getting more difficult to preserve those. a final note -- one of those services at risk are the maintenance of street trees. we're getting to the point where all we will really be able to do is respond to emergencies. one of the things we are contemplating is