question. but we are past the end time. >> i am a victim of foreclosure where a company forged a loner that i paid off and has successfully gone to the foreclosure process. a question is, how are you going to stop this? what are you doing to prevent this from happening enforcing it? the other question is for the police chief. they have proceeded either steal or sell my belongings. the police say they are doing [inaudible]

>> in the restructuring of the office, we're looking at a mortgage fraud and inappropriate conduct by lenders. before we leave today, i will talk to you and take a look your case at. for the larger audience, if you are where they want as being foreclosed and you believe there are inappropriate lending practices, we have created a unit to deal with mortgage fraud and want to get those cases so we can look at them. i would like to get your information before we leave today. >> give me your name and number and we will look into it. before you leave, and give me your name and number.

>> everyone, i want to thank you for coming tonight. i wanted to thank all of the city officials for being here tonight as well. thank you. [applause]

>> welcome to the district 4 budget hall, today we have a number of people that are here. the purpose of today's event is to talk about the budget. the city will be entering into this decision in the coming months and coming years because of what we're projecting in the future. the intention is to really hear

the conversation around the public's perception of the budget, what it is you would like to see in the budget and what you would like us to consider as we move forward. heaven number of people here to speak. we have mayor lee. [applause] will have supervisor elsbernd. [applause] we have the district attorney. [applause] the police chief. and in the office of small business. [applause] school board member mendoza. [applause] be miscible transportation agency director. [applause]

and we are going to ask everybody to please be very respectful as we move on with this process. i know there are a lot of questions that might come up about particular organizations, but we really want to focus the meeting on the budget. we have a desk from the public utilities commission. from the department of public works, from the department of public health, from the department of children youth and their families, and of course the mayor's budget director.

for anybody that might need translation services, we have translation available in chinese as well as in russian. please go towards the back. can i have the language folks raise their hands so they can see. the general format, we tend to get everybody out of here by a 11:30. we will have the mayor give opening remarks. will have the budget director run through what the budget scenario will look like for the coming year, and the department heads will each say a few brief remarks. we will open up questions and answers at the very latest to you will have ample time to ask questions. if you don't have these cards to put down your questions, will do our very best to collect questions yet to respond back to you after the meeting.

if i could ask the mayor to say a few words. >> thank you for being out here to join the supervisors and of the department heads. we also want to a knowledge a number of commissioners out here. i can't name every body, but they are out here. some of them live out here and are interested. the translation is being offered by the civic engagement of the city district office. % in we created with the board of supervisors to make sure everybody is heard to make sure that they are inviting everyone's voices to be heard as well. they're doing a great job. i also wonder let you know there are a lot of opinions that will be expressed today. we're hopeful that everybody respects each other's opinions.

if we have somebody that gets out of hand, the officers are privileged to escort you to some special exhibits at the zoo. i am happy to be out here, too. anytime i have a chance to talk with people, it has been my pleasure to engage all of the neighborhoods in san francisco to hear what is going on. i have been working very hard the last three and a half months to bring more unity to the city family. i know all of these colleagues here, and i have worked with them for many years. they do break once in awhile because we have a $306 million deficit but i am trying to make the best decision of how to fill that gap. i need your input and i need to avoid mistakes. i need to also embrace what we believe the city really reflects. i have given some very simple

instructions to the departments as we began this year with respect to the budget. three very simple principles i have repeated at all of the town hall meetings, i have expressed that to you. i want the city to be safe. safe in a couple of really important aspect. in what you would ordinarily think is a public safety cents, that is why the police chief is here. they're all here to help me forge a public safety plan that you also have tremendous confidence in. we tell our police officers, and they want to make sure they are doing their best. it is about the communications and the dialogue and having systems in place that really are not only responding well, but can participate were --

anticipate where criminal activity might be. i also want a city that is safe with respect to the whole course social network of services that we want. guess what? not so much about police, it is about what is going to happen to them relative to their own safety whether it is nutritional meals, whether it is being across the street safely. those are also part of my definition of safe. i want you to understand that what i say safe, it is public services as safe as well as public safety. you need a in enemy to be solvent. we have got to add more. with a gap, we have a challenge. they will explain how that has occurred and what limitations we have with filling that gap and

why we need to look at all of the programs that we have to make sure that we have the best performing programs, and have we done everything we can to make it most efficient? having said that, height will let you know that a great part of that gap has to do with a runaway pension system. a system that we have not really pay a lot of attention to. a system that every other city in california if not the united states has said we have to fix our own pension systems. our employees are wonderful. i have worked a wonderful 22 years with city employees. we have a very dignified pension system. because of the way the stock markets have acted, in particular the crash in 2008, you're not prepared for the costs have risen as high as they are.

of the $306 million deficit, $100 million of that has been the result of an increase in cost to our attention. that is why i am working very hard to do pension reform. i think we're getting closer and closer to negotiating a with our labor union leaders and our city family to have something before you that will really take a long-term solution to the pension costs. and make sure in the future that it doesn't eat into the general fund the way it has and the way it will. if we don't take care of it this year, in three years, the extra areas of our city will be rising to over $600 million. that will be eating into all the services that you want, the ability to have levels that we

have today. a solvent city is the most important thing i can contribute. we need to make sure that we balance the budget and we have had to reform for you in a most serious way. we will try not to confuse you by having other ballot measures. we're striving to have one. that is what i get to do. not going to another office. i am not trying to win votes or anything. after having a safe and solvent, i want a city that is successful. what made you come and buy a house? it is because you felt the diversity of san francisco.

we have the ability to attract -- we have of events in our parks that just attract so many people, but are affordable to our residents to have a world- class city that can win the america's cup. we have to have those programs and those traditions. that is what brought us. i want a city that is successful. i will stand for a city that is growing old and not paying attention. we need to do all kinds of things to make sure that we have transportation systems, our

communications are modern, and i want a city that is safe, solvent, successful. a lot of things we have worked on for many years, we have to work better at them. we can't afford to do the things that we have done. a lot of them are here. i am happy to be here with combined districts to tell us what you think is important to the city. those are the instructions i have given and i think you for spending your time here this morning. if anybody says they're getting charged $10 for parking, that is false. that is false. and nobody gets charge for parking here today. >> thank you for coming out. you're all about to get an introduction in the fairly daunting numbers that the city is about to face.

that the city is facing right now. the way the process works, the mayor introduces his budget. it gets handed off to the border of supervisors. as daunting as these numbers are, i am fairly optimistic that the west side district for and district 7 are going to be represented. the needs of our districts will be addressed. those things i believe will be addressed. you have heard it from the mayor. the mayor appreciates that which is important to us. for the first time since the board of supervisors has gone back to district elections, the search for an 7 has never had the chairmanship. that is for the first time in over 10 years.

we have a budget chair person. and while it is a committee of five, that chairmanship means a little bit. i am excited that she is in that position. i know she absolutely appreciates what is important in district 7 as well. with the mayor in charge, i am pretty optimistic that the daunting numbers can be addressed and will be addressed. . >> i appreciate the opportunity to share with you a little bit about what the financial picture looks like and what the challenges are for us over the next few months as we go through that process of balancing the city budget.

as you know, i think they are in the process of setting up some slides. we have an ironclad requirement that we have a balanced budget every year. we can't print money or borrow money. we have to have our revenues coming in matching our expenses going out. for the coming fiscal year that begins on july 1, we have a general fund budget deficit. you have heard $306 million. we have to make decisions and will either reduce our expenditures are increasing our revenues in the general fund by that amount. and in the big picture, when you look at city finances, things are starting to look of a little bit out there in the economy. we are aware of that. we're not out of the woods, but

there are glimmers of hope on the horizon compared to where we were over the last two or three years. we are in slightly better shape and starting to see some of our revenues as the economy begins to pick back up. it is stabilizing, not dropping as they have been. we're starting to see a little glimmer of hope at the end of the tunnel. at the same time, while the revenues are stabilizing, we have other things that are going on that have financial challenges for this year and for the foreseeable future unless we take some actions to correct our structural budget challenges. we're losing money from the state and federal governments as they tackle their own budget deficits. we have used a significant amount of federal money to balance the budget for the last couple of years, including money

from the federal stimulus package that has gone away. we are on our own, and as i am sure you are aware, the state budget has some real financial challenges. we're waiting to see what that is going to mean for local governments. the bigger issue as we look at what the projections are for the coming year, in the coming five years, referring to the long- term financial planning. even when they begin to recover and the revenues are coming back in and starting to show some growth, where projecting that they will slowly recover over the next several years. we have an expenditure problem in the city. when we look at what the growth and the costs are, a significant piece of this is a about our

employee costs. those costs hour -- are projected to grow at a rate so quick that even as the economy recovers, the expenditures will outpace the revenue. even as the economy recovers and we come back and a happier economic times, we still face budget deficits for the foreseeable future unless we can do something to get our expenditure costs under control. that is why we have been working very hard with supervisors to try to come up with a solution for pension reform. just to put the $306 million budget deficit briefly in perspective, as you know, within the budget, we have different lots of money. we have the city budget and many

people who say that we have $6.5 billion, why is the budget deficit, it was outside the general fund. they are generating their own revenues to pay for expenses. in the other part of the budget, the general fund is a portion of the budget that we are talking about when we say we have a $306 million deficit. that is where we have the services that are funded primarily by tax dollars. those services are the department of public health, the fire department, the police department, the sheriff. we don't have a source of money

to generate from providing those services. in the general fund, it is 45% of the budget. have significant restrictions on what we can do. we have pension costs. there are obligations that we can't decide to reduce. even before we start making decisions about how to balance the budget, we have the voters approved restrictions, and at the end of the day of the 45% of the budget, only about $1.2 billion or $1.3 billion is truly flexible money.

the $306 million budget deficit is approaching and about 25% of that flexible part. we have some big decisions to make about how we will address that deficit. one last point to reemphasize, these numbers at the bottom here are projections for what the deficit is going to look like for the next three years. as i said earlier, even as the economy begins to recover, because of expenditure growth, we are showing the budget deficit getting larger over time. next year, we are going to have a $480 million deficit in the

$642 million deficit the following year. those numbers can be corrected, we are working on correcting them, but a means will have to take some pro-active steps to address the growth. a thing that is the big picture. i am happy to answer questions later on if it is useful. >> that was a brief overview of the budget. every line every piece of it is complicated. it is about 10:40, so we will do department conversations for 20 minutes. >> thank all of you for being here this morning. the mayor made some very clear statements, and i want to tell you that we're here to support them.

the basic function of local government as public safety. when i came to the city, how committed to do everything we could to make san francisco the safest city in the country and we will continue to do so. we also recognize that there are tremendous and her budget shortages and there is a lot that needs to be taken care of. we're moving to try to make the office more efficient. we are about $39 million of the total. the primary goals will be public safety. you're going to work with the police department will do everything we can to make sure that we attend low-level crimes and rican who the higher level of clients. you create neighborhood courts around the city. we know we can deal with a lot of the left -- low-level crimes

and reduce the cost of dealing with the crimes. it is approximately $1,500. starting may 2, you'll see the rollout of neighborhood prosecutors throughout the city ha, ha and the goal was within 12 must have the entire city cover by this process. they're hoping to create more room so we can attend to the more serious crimes while not forgetting the quality of crimes and all those other was under so important to everyone in order to have a good city to live in. secondly, lee wanted a shield -- make sure that we deal with white collar crime. there are a lot of problems here. there are consumer problems. when only have some bad banking practices, and at the end of the day, will also have the

tremendous impact. finally, in order to get all of the gun and try to do it as efficiently as we can, we are reorganizing the office. as a matter of fact, i am reaching to fry the partners that we will work with a look for ways to make the office and better run and a more efficient office. our priority will be public safety. white collar crime. who and how to do this in a more efficient way. >> home the morning. the san francisco police department budget for the $471 million, of that, 90% of that is salaries, fringe benefit, so what and so forth. it comes out to about $11

million that i have been given back. $11 million of that is personnel. that is the only way that i will be able to give back that $11 million to the city. in a perfect world, we have between six and eight officers that retire each month. i will have to have a least three academy class's just to maintain that 100 person retirement account. for me to give back about $11.3 million, i will have to cut personnel from 2200. i need as many police officers as i can. but my commitment to you is that no matter what happens.