mayor lee: thank you, everybody, for coming. i have asked for the roundtable because oftentimes, information about what we're doing this not get expressed in much detail for a lot of the emerging news outlets, so i wanted a special time with the asian roundtable press just to make sure you can get your questions answered about what we're doing and in particular, i wanted to talk about our pension reform, which

is one of the most important things that i think i can contribute to the city as the mayor, and of course, what we're putting on the ballot in addition to that this november would be the street repaving bond. i will begin with the pension reform first and then talk about the bond and attempt to answer any questions you have about things we're doing throughout my administration. in january, as you recall, i announced five high priorities, and pension reform was one of them. at the time, we looked at the numbers, how the cost of the city employees' pension was impacting our city fund. the to over $225 million a year had to be set aside just to pay for the increase in cost of pensions, and the tensions had to do with both the pension

costs as well as the health care costs, and none of the health care costs have any coverage at all in our current budget. so i had to go to work on that very hard. we knew that it was going to take months and months of discussions, but we approached it in a way learning from what had happened last year in proposition b, as you recall, it was a proposition that mr. adachi had proposed. it went to the november ballot and got defeated in a very sound way. as a city employee for 21 years, i observed very closely what happened, and he, of course, and bird so many san francisco employees -- angered so many send francisco employees. janitors, street cleaners, fire, police -- they all in very

large voices resoundingly helped to defeat the proposal because they felt it was done in a way in which they were never included in that discussion. it was their lives, their pension that they feel that they earned in the city that they love, so they asked us, that they were willing to cut and support a pension reform that would increase their contributions, if it was done the right way. we asked what the right way is, and they said the right way was to include all the unions and make sure it is something that they can pay attention to, that they understand and will participate in, so we did that in a very different way. we met with all the unions and discovered that the unions were very willing to give up more, to pay more into the pension program, so that the burden on the city's general fund would not be as great. we went about telling them what

we had to do, and we created a pension reform measure that was flexible, that whenever the increase in cost went up because the investments were not as good, their cost of contribution would go up simultaneously. but they would also -- and this is a very important point -- when times are good and our investments do good, we pay less as a city into the fund. they pay less into the city, so they enjoy the good times, but they also share in the bad times. that flexibility is called the flow -- float in our charter, and that is a big distinction with the alternative proposal that is still being marketed by mr. adachi. it is important for you to know that. that distinction called vested

rights. many cities across the country -- when they have not considered the employees' pension has a vested right, they get into legal trouble very quickly. that is why you see litigation around the country sponsored by employee groups who have never been consulted with, being demanded that they pay more into the pension, but there is no consideration of their vested rights. that concept is embedded in our measure were in good and bad times, we share, so they get something out of this reform. because they get something out of it, they are vested in it. the unions continue to view, as i do, that the alternative proposal being sponsored by mr. adachi does not consider vested rights and therefore will be litigated. in that litigation, there is a

great chance in my opinion that the proposal will lose. i am not the city attorney, but if you ask the city attorney, as we have -- and we have that assurance -- that if you do not consider the vested rights, there will be potentially successful litigation against it, so i wanted you to know that. that is a point i continue to make. it takes a little time to understand the, but it is one where if you understand the world of public pension improvement reform, and that is why we have such heated debates in oakland and in san jose. very heated. the first thing the unions say is they will sue if we tried to logos on us without consideration, and now, everything is being settled. if you go into the details of the settlements, you will

so i am speaking to in my lawyer had on. i also think our proposal is important to consider because we have employees agreeing to pay into their health-care trust fund for the first time. they have a date certain to pay andin, so that is another contribution being made. the employee making under $50,000, they would not a book to -- they would not be required to pay the increase. but as they increase their wages, then we have two more level where they contribute more and more, as the year's increase. that helps us in the millions of dollars with this. our proposal will increase the

contributions to the pension by between $800 million and $1 billion. it is comprehensive in that it ends pension spiking, increases the retirement age, both for public safety as well as miscellaneous. i am part of that miscellaneous category. so i have to work more years now to earn the full pension, which i do not mind. it also covers all employee classifications. apparently, mr. apachdachi's proposal leaves out the sheriff's. we cover everybody. we are not clear as to why he had done that.

as i mentioned earlier, the health care costs are there, all the classifications are covered. we pay into the health care cost. one of the most important things is we have the every bit of 99.9% of all unions. we are still working with sciu to get agreement. we still have some things under dialogue. they want me to figure out a problem that they have that has nothing to do with pensions. we believe we have figured it out and we will be speaking with them the next two weeks to get an agreement. i think our hard work and resulted in a lot of confidence with the unions. the unions themselves are strong in this proposal. i have to thank them, time and

again. i saw leadership coming out of a union to say we will not allow the city to be forced to consider pension reform without us. i thank them for that because this is the way that i used to do business in the city, doing business with the people involved. if you work with people, -- it has been my management style for 20 years -- he will get more out of those people that if you just forced them to do work that you know they have a problem with even as we approach muni, at this time of mayor, we are going to talk to the drivers and breed cried into what they do every day, even though we have to get more from them in terms of performance. i want the 85% on-time performance. they have issued that they need help to resolve. people get in the way of the buses, do all sorts of things to

keep them from blowing. it is my style, as mayor, to work with people to find the best solution. to me, it is not about compromise. it is the way you do business. you are going to affect people's lives with pension. it is the best policy to work with people, and that is why we have the consensus good policy. the second idea of the bond measure, the $248 million bond that we have for street repaving in november, is also important. we are making up for bad decisions in the past. i am not going to blame either the mayor, board, but in combination, all of us did not do good things in the path to invest in our infrastructure. one of the things i spent the most time on in my prayer job as city administrator was putting

together a 10-year capital infrastructure plan for the city. it is now four years old. we have been disciplining all of our capital infrastructure work in a better way. when we pass construction bonds, we have honored timeline for that. we are no locker telling people we ran out of money. we are doing better on a project it the last time we ran out of money on an art project was lebanon on that. that was not planned under the 10-year capital plan. the libraries are coming in on time, the parts that we are finishing up. everything is being designed for accurately, and the engineering of those things are more accurate, and we are holding contractors accountable for all the things they are doing so we do not run out of money. when we do that kind of

discipline, we can promise the voters and property owners in the city, that your property taxes will not go up. 1996 was the last time that they went up. for this street repaving, we are making the same promise. we will not increase property taxes with this bond. that is a promise embedded in the language. we need this money because half of our 850 miles of streets are in very poor conditions. if we do not take care of that now in a massive way, we are going to pay five times more if we delay. that is something i need to avoid, something that i need to take total responsibility for putting forward now and making sure i'd make the best effort to make her we need to pass this

bond. this will give us three full years of back some street repaving capacity. those three years of capacity will aim all of the construction at the worst streets in the city. it will also make sure every supervisory district gets a fair share of those dollars so that you do not have people in carmen chu's district saying, how about my streets? it will be equally distributed. there is a geographical equity clause in the bond that says everybody gets a fair share. we just will pick the worst streets in their district to work on. the benefits of working on those streets, or threfor three years

it is at a total capacity for what dpw can do. after three years, we do not want to come back with another big bond. what we would like to try to do is get the street repaving back to the general fund. build up the general fund so that it can cover the streets. it may at the 100%, so we are looking at taking back the vehicle license fee that the state now has. they use it for everything but our streets. we need to take that local decision and get our vehicle license fee back to our streets. the combination of those two will colon -- continue to allow us to have a good pot of money to continue maintaining the streets at a high level. but these three years will only keep us at the current level. it will not get us into a better

place because of all of the backlog of streets in disrepair. i want to make sure that we have done enough so that it does not increase fivefold, if we did not do anything. that is the danger. i am spending my saturday -- weekends -- talking to neighborhood groups about pension reform, the street repaving bond. those are two important things we are doing. we will also be introducing a half cent sales tax to take the place of the state's inability to get theirs. as you know, july 1, the law changed. the sales tax would down from 9.5 to 8.5. we are asking for a half a percent increase to cover but the state is going to impose on us. it is a safety thing for us.

i do not call it an increase. we called it a safety sales tax, something that restores half of what we gained. that will help us with money that i had to use to balance the budget this year. i had to get into the reserves. i want to build up those reserves and be prepared for one or two more years of bad economic times for the city and county. i have to be smart about that. i hope the public understands, we're not increasing the sales tax, we are just trying to get half a percent back. to me, that is a lot of work between now and november, meeting with the different resident councils, neighborhood associations. if you see me, which you will, i will be active selling those

three things as the mayor of san francisco. i wanted to give you a head start on the detail and answer any questions you had, make sure our asian community as well are versed in the details of it. at this time, i will open it up to any questions you have. thank you for being here. >> [inaudible] have you seen his proposal? >> yes, it is not that different. i have to say, mr. adachi is offering a compromise because i think, he is the to realize we did the right thing.

the only way that he can come in is to suggest that we compromise what we believe is a comprehensive proposal. i would welcome him to go to the board of supervisors to make his pitch to the board. i believe the majority, if not all of the board of supervisors, will end up endorsing our proposal. we will have a public process for him to involve himself. i had offered his input. we took a lot of his ideas at the beginning in january, february, march, when we included everyone at the table, and he was still out that gathering signatures for something different, using outside money and outside help. we were all working with the city family, labor unions, city departments, trying to do our work. so his proposal has not really

changed. i think he is just realizing the data is coming and he is a ploy to have to make a decision whether to go with hours or himself. i do not that there is much support for his proposal. he has not that it the right way. we continue offering him eight opportunity to join us. he will attack our proposal with limited few points that are not correct. he is currently saying that we made some deal using the budget balancing proposal. that is so nonsensical. he knows for a fact that the police union had every right to a pay raise. it was done away before i became mayor. they had a contract with that right. we tried to get as much money back from police and fire, with their cooperation. they have every legal right not

to, but police, fire, nurses, in consideration of our request that we needed to balance the budget -- and we could have had layoffs if we did not balance the budget -- they for going to their membership and i believe they will vote in favor of giving back to the city. you have to thank them for that. they did not have to do it. instead of hitting them over the head, like mr. adachi does, you are not giving enough for you are taking something away, we need to thank them for cooperating. that is the difference in philosophy. i will invite him to appear at the board of supervisors, convince the board of supervisors, but i believe -- and they are checking in with the weekly -- they are telling

me that our proposal is much more comprehensive. it has the help their contribution that they are going at. we have support of the unions. they do not want another lawsuit from a union that will then place us in jeopardy. i think the board of supervisors make an intelligent choice. as you know, i have worked hard to make sure that our office communicate well with the board. i think mr. adachi has to appeal to the board of supervisors. i do not believe he will have the support. >> [inaudible] school construction bonds.

do you worry about asian communities may not approve it -- thinking together -- two things? >> i have not had a chance to review the school bond proposal. there are several government structures, so they can place things on the bonds without our authority. i will say, with a lot of bands, the asian community has always been concerned about the quality of schools. you talk to any asian family in general, they hope that schools improve because it is their kids getting into it -- education. if they believe the school board will increase the opportunity for their kids to have a better education, there is no doubt they will vote in favor of it.

but if they believe the school bond will not do that, that they would be the first ones to say no. that is the way i think i. the school district will have that obligation to convince them that this is good for them. we have challenges in our school district, as you know. everybody wants quality education. will the school bond help with that? that is a good question that will help people understand. >> [inaudible] >> if people think the only issue is their pocketbook, that might occur. but i think most people want to understand what are you proposing? is it good for quality of life in the city? for myself, many of the asian families, they enjoy quality of

life. they want public safety, they want a safe city. they want a city that is not in debt. they want a successful city that keep on bringing in tourists. lots of tourists from china. you saw the ping pong group yesterday. everyone enjoys that. i think asian community wants a successful city that is balanced. it but not always have to be the pocketbook, but they want a quality city. that is why they came here. it is about the richness of the city in general. do i want to keep living here? do i want to make my life here? that is on the minds of many asian families. i went to lunch with some sixth graders from alice fong.

i said, do you want to be in the city? yes, i want to be in the city. they were asking me about twitter. they play some of the zynga games. they did not know that their headquarters were here, but they need to know that, growing up. we want the chinese companies to also use san francisco as their headquarters and to continue to be the gateway. people love that about the city. asian families, the matter their income -- they could be a hotel workers, garment workers, for ceo's, they all want -- or ceo's, they all want a quality city. my job is to make sure they trust government, so that when we say something, we do it.

what i do not like it, and past relationships with the government, they could not do what they said. that is where the mistrust comes out. that is why i am going around talking to every community possible. if i can take care of it, i will tell them. if i cannot, i will tell them honestly. i think honesty in government is the most important thing right now, especially at three are trying to build quality for the city. that is how i will approach the bond, the pension, and sales tax. >> [inaudible] >> it will be by the actual roads. they have something called the pci index, the measurement of the road conditions.

just because it district is larger in geography does not need -- it will have to be a combination of what is the quality of the road and what are the most traveled roads that need of repair? which ones are in a state, where if we do not repair that within the next year, they will cost five times more? those combinations of things we will use for every district to determine which roads. the equity is about how much money we have per year to spend with road pavement, it is about $150 million of street pavement. the rest of the money will go to improvements for bicycle lanes, ada