mayor lee: i am honored to be here at the board chambers to present my proposed budget for fiscal year 2011-2012, and i want to just start by saying that it is a pretty happy time for me because we have got a budget that is on time, that is balanced, and maybe on like our -- unlike our cities to the east or to the south, it is one that i think reflects a very solid cooperation with our board of supervisors, with our neighborhoods, with our community-based agencies, and with all our departments. at the beginning of this year --

actually as late as last year, we projected a $380 million deficit. former mayor gavin newsom had set us on a course that we have to be very focused on this, challenging us. we did that. we followed his advice and work with our departments to make sure that they came forth with what they believed would be a balanced budget. closing this deficit, and as it became clear to us that the budget was not only challenging, but that we could make it, that each of the department began working closer with us about how we could fill that gap, and it has not been easy. i want to say at the outset that i want to thank the departments for working closely with the mayor's budget staff. it is incredible, the work that you do. being here for over 21 years, i find it still the most talented

workforce, the most talented department heads and managers, but the actual work force and their sacrifices are reflected -- their sacrifices reflected in this budget continues to amaze me. while we are scaling back and asking for real sacrifices, this budget has not been reflective of any new promises. it has actually been keeping a lot of the old promises alive. but the good thing about this budget is that there are no layoffs -- at least not in a massive way -- and unlike what i hear this morning, instead of closing libraries, we are reopening them. [applause] unlike sacramento, we are on time, and we are balanced. despite the difficulties that we

have, i see actually in this budget a lot of hope. time and time again, i have been reminded throw out of the meetings we have had that a budget is reflective of our values in the city. in addition to reflecting our values, i do think this budget also represents a lot of hope. because our city is now on the rebound already, and i can feel that you can all feel it here, just in the span of six months, we began this year with a tremendous challenge in our unemployment rate, being over 10% -- 10.1% as of january. today, the unemployment rate has gone down to 8.5%. we also recognize that our city has grown in the last 10 years, by over 3%, from 776,000 to now over 805,000, and that is just residents alone. we continue to attract major

companies in this city, companies who want to be here. they want to be your as partners and collaborators and, as we suggest, they want to hire san franciscans. we want to meet that challenge and we want to work with them. at the beginning of this budget, made a commitment to myself that i would do my best to listen to every part of this city, to all the neighborhoods, to the supervisors, and to the corridors that we held compound meetings at. not only what i want to listen to them, ultimately, as the impact of us, my challenge was really to listen to myself, as we reflected all of the values that the city has made -- as they impacted us. as i have been chosen as interim mayor, i wanted to make a commitment that i would not make any intron decisions on this budget. that we had a big challenge to not only create a foundation for

years to come, but that we would make sure that we had a budget that would reflect long-term investments and the long-term financial health of this city. we set out a course to collaborate with as many people as possible and to make sure that our budget was reflective of what san francisco knows how to do. that is collaborate and build consensus. we held over 10 budget town hall meetings. we've met over hundreds of residents, community organizations. we met with city commissioners, labor organizations, business owners, and activists, and throughout all those meetings, they are able to shift some $28 million in changes to the budget. this budget not only reflects our values, it is about the future of our city. you have heard all of those that

you have attended. the budget town hall meetings and meetings with our community- based agencies. you need not hear from me today again about the goal, but i do want you to hear from people who i think are our challenge and reflective of our city, so i want to invite up to the podium today three people -- three students who will talk to you in their own terms about how they feel a city can be safe, a city that can be solvent, and a city that can be successful. if i may invite zack parker to please set up to the podium. he is 8 years old. he is going into the fourth grade at sherman elementary school. he likes playing basketball and drawing. he will be visiting yosemite and

his family in oregon over the summer and attending summer camps. thank you for coming today. he is joined by his mother. go ahead,. >> hello. [inaudible] mayor lee said he wants the city to be safe, the word means more than one thing. will walk to school, play outside, or go shopping with our parents, but it also means that we should also help people who need food, the doctor, or a place to sleep. the whole city is stronger when we make sure we can all feel safe. today, we are hearing about how we can grow a stronger, healthier, safer san francisco for all our city's families and children. [applause] >> thanks, zack. next, to talk about a solvent

city, i would like to invite and 11-year-old just graduated from harvey milk civil rights academy. she will be going into the sixth grade this fall. she likes horseback riding and reading. she will also be going to camps and taking some road trips by bus the summer. she is joined today by her mother. >> i just graduated from harvey milk civil rights academy. i'll be going into sixth grade this year at everett middle school. students at my school work hard every day. we are planning for our future. the same way the mayor is planning for san francisco's future, not just planned for one-half in private -- planning for what happens in five years now, not just today. in five years, i will be in high

school. mayor lee is planning for five years down the road, too, to make sure san francisco is what he calls solvent. it means we will put together [inaudible] [applause] mayor lee: thank you. finally, i would like to invite up to the podium lorenzo tomayo, who just turned 13 this week. he is going into the eighth grade and plans to go to lowell high school. he enjoys playing basketball with his school and with his buddies. he plans to attend camps. he is joined by his father. >> good morning, mayor and board of supervisors.

san francisco students should be proud to live, study, and learn in one of the best cities in the world. when students come to graduate from high school or college, they should be able to stay right here in san francisco. that is what happened. our city has to have jobs for people like me, people who grew up here in san francisco who want to stay here in san francisco. businesses from all over the world want to come here because they know this is where the best workers in the world come to work and live. to be a successful city, it goes beyond just keeping businesses here. san francisco needs to work hard to keep families here and make the city a place where people want to raise their kids. the city has an opportunity to provide a good foundation of quality education, jobs, and programs that strengthen families. even though the whole country is struggling with the economy, our city is working hard and investing in a successful future

for all san franciscans. [applause] >> thank you for helping us and reminding us that we can be a safe, solvent, and successful city while we balance our budget. our city is reflected in being a safe city, and that challenge has been formidable. despite the financial concerns, this budget reflects no layoffs for police officers or firefighters. yet, we will still face the challenge of a public safety realignment when they state makes these actions. i want to thank the chief because from the start, he has worked with me to make sure that our police department was acting

accordingly and making sure that it would bring its financial house in order. so from the beginning, he has already cut off more than $1 million in their financing with actions made at the management level. i'm sure that with his leadership and the leadership that it represents to our fire department and our nurses, that we are optimistic and appreciative that the additional task of more than $20 million is anticipated, and we want to thank them for that great sacrifice -- the police, fire, and nurses -- for considering our proposal in helping to balance the budget and keep our city safe. [applause] while our public safety

departments consider the request, we acknowledge that it is a great sacrifice that is being made, especially in light of the fact that for two years in a row, that task has been made over and over again. we understand how great a sacrifice it is. at the same time, when we define, as zack treated, the safety also means that we keep a very critical level of social services in tact, we know that what out that degree of social services in place, the officers on the street would have a higher job -- as zachary did. we went about making sure that our social safety net was an attack, by meeting weekly with our community-based organizations. with that, we read prioritized funding to support meals for our seniors, our residential mental

health and substance abuse programs, and domestic violence prevention programs. some $13 million was shifted as a result of these meetings to make sure that we kept our city say it was critical core services. [applause] in addition to that, i want to especially thank the directors of our public health department and human services agency because without their effort, we also would not have found some $39 million in new federal dollars to expand our capacity for our health care system in preparation for the president's health care changes that are forthcoming, and an additional $16 million in state and federal revenue for basic safety net programs like food stamps,

foster care, adoption and aplomb of programs for low-income adults and families. this will keep our city safe. [applause] as we went about figuring out how to make sure our city was solvent, we spent some time making sure that everybody understood this was no longer a budget for one year, that we are starting to plan with five-year financial planning. even as we know that our economy may be recovering, we understood that costs were going -- growing faster than revenues, and that is why we set about looking at our financial planning for five years. to address this, we have asked for shared sacrifices, and that is why you heard earlier a few weeks ago that we introduced our pension reform. that is the critical part of our

solvency in this city. i want to take again this opportunity to thank the leaders in our city because you have shown us again and again how we can work as a city to build consensus, to collaborate, and to make sure those pension costs are kept within our means. thank you, again, labor, for being such a great partner in working with us. [applause] we also wanted to pay attention to our revenue side, to make sure that our house was solvent. so we are introducing today, as we have discussed in earlier weeks, a sales tax that will help us recover from whatever the state of california cannot accomplish. so i will entitle this to be a recovery sales tax. as all of you know, governor

brown is attempting to extend the sales tax to make sure that the programs in the state can continue to be funded. we would like to introduce a local sales tax as an insurance and only as an insurance to make sure that if governor brown and the state of california is not able to extend that tax, either with its failure to be introduced or the failure of the election in november, that we will offer not an additional tax, not a new tax, but a tax to recover one half cent of the 1 cent a stabilization. on july 1, should the sales tax drop from 9.5% to 8.5%, and

should the state be unable to extend that tax, our sales tax would ask the public by 2/3 vote to bring an approval for a local half-cent sales tax. during the sales tax to 9%. it would only take effect if the sales reduction fails to go through or does go through and the state tax is unable to be extended. this is a safety valve. it is one that will protect the core city services against the uncertainty in sacramento, and it is a smart way of doing it because we cannot sit idly by and watch what sacramento is unable or fails to do. we will not be at their win. we have to protect our own services. -- we will not be at their whim. [applause] still, even with this half-cent

sales-tax extension, we will still keep a healthy level of reserves, reserves that total $67.6 million, representing general fund reserves, general state reserves, our children's fund, and our rainy day fund that we continue to support our school district with. that will keep our city solvent. finally, we cast ourselves with what lorenzo talked about earlier -- how to continue making the city successful. i want you to know that we understand that our city is no longer a stagnant city. it is a growing city, a city that's population is growing. companies want to come here. they want to employ our residents. they want to help us grow. so we have focused on what we

can do to sustain those jobs and make sure our city is successful. we have our america's cup that is slated to occur here in 2013. what a wonderful opportunity to continue to make that event grow. it is no longer a national event. it is an international event and reminds us how much we are as an international city. we continue to embrace our local hire program. thanks to the before your supervisors, i am working extremely hard to make sure it is not just construction, but we have a spirit of local hire in every company that here. we have apprenticeships programs reflected in our budget that will allow our department of public works, our recreation and parks department, our environmental department to work together to make sure that we hire as many people as possible to fill our apprenticeship programs as we get ready for a resurgence in the building of

san francisco. i pledge to continue working with the supervisors on the neighbor heard commercial quarter program because through all of the means -- the neighborhood commercial corridor program because the of the means we have, our neighborhood corridors are as important as our downtown corridors. we are again reminded with the successful level of tourism we have in the city and with the recent international powwow that our own san francisco travel agency and visitors convention bureau sponsors successfully, we will continue partnering with our local hotels to make sure that our best foot star forward whenever the tourists are here because they continue to be our number one revenue-generating source of income -- that our best foot is forward. we want to continue to make sure that we continue reminding everybody that as this budget reflects a successful city, our success also is reflected in our international stature, that we

continue to welcome all who want to come, whether they want to live here, whether they want to work here, and whether they want to be part of a successful city. we are an international city. with that, we will continue investing in our capital program. this budget reflects over $308 million in capital investment, primarily in our enterprise departments. we also will introduce with the board's corp., a $248 million investment in our streets. we are finally getting into our streets, and we are sure this time around with the leadership of our board of supervisors in cooperation with our citizenry, that we will get the streets repaved. [applause] this submission of the budget is not an end at all. we work really hard with our budget office, with members of

the staff's of each of the board of supervisors, with the staffs of the apartments, and most importantly, with our community and community-based organizations. this is not an end of the process. as a beginning. we had hoped that this would signal a new way of doing things, a more enlightened way to present our budget and to work at the front end to resolve problems and not at the back end. i want to recognize supervisor carmen chu for being with me at so many of the budget meetings and making sure we get an early start, and i look forward to working with supervisor chu on her leadership at the board and with each and every member of the board of supervisors as we go forward this month. i also want to recognize the budget office. i will rename them because they have been very important players in our office.

[reading names] [applause] certainly, from members of my own office, i want to thank my staff for their excellent work and cooperation. from the controller's office, thank you very much. [applause] and i do want to thank mr. harvey rose in advance. [laughter] because i know that our

cooperation will be integral to continuing the good cooperation we have had with the board of supervisors, and to make sure we make adjustments accordingly and to make sure we have a continued effort to have a balanced budget. thank you for your continued cooperation. [applause] i want to thank the great parents of our kids. as we look forward to making sure that our budget is not only balanced but continues to reflect the values of the city, the futures of the city. i have enjoyed working with you on this budget, and as we have met individually, we have the future of the city our hands, and i will continue enjoying working with you to make sure that that future is bright, that we have a great foundation for this, and that we keep the city family type. to all the apartments, thank you again for working with me.

to all of the elected officials for all of your support, and to the audience and members of the public, i never grew tired of all these budget town hall meetings as i got to listen to the care and the interest, to the passion that people have for their neighborhoods. thank you very much for working together with me. this is the introduction of our budget, and i thank everyone for their cooperation. thank you. [applause]