>> mayor ed lee and supervisor farrell and the mayor's budget director kate howard. this is part of san francisco's inclusive budget and to ask questions about san francisco's budget. it's a very best of big budget and we're assuming that you have lots of questions that you

want to ask the mayor and you will have a chance to do that today. before we start the conversation, i want to remind everybody that you can participate by either emailing your budget questions or concerns to mayor ed win le@sf.gov.org and include the subject line "budget line town hall." and i think we're ready to go. let's start offer by introducing san francisco mayor ed lee and just a few opening remarks, your initial thoughts as you approach the budget season? >> thank you, barbara for moderating this and thank you supervisor farrell, this year the budget chair and he is supervisor in district 2 and that is a very important part of our district. he is going to have a big job on his hands this year, working

with me to balance the budget before the board of supervisors and the administration. so i want to thank kate howard, because she and supervisor farrell are accompanying me to so many budget town halls throughout the city and i want to thank the audience, because this is an effort to unveil to you our thought process, be much more transparent to set the priorities for the country and engage our citizenry is really the most important principle of segment the budget. often times people say the budget is a reflect of the values of the city and i do take that to heart. let me say at the beginning, that i said i would have a little fun with this, barbara. and so one of the things i want to analogize is that supervisor farrell and i are like mily and

appropriate to say that here in san francisco. that he is on the legislative side. i am on the executive branch side, but we're charged, kind of like parents of a family, to balance our family's budget. and this year, it's remarkable, because i think we have had some good years, where the two parents are engaged in long-term planning for the family and the more planning that we do and the longer term it is, the less arguments we're going to have as spouses. less tension that we have. and so it's what we have done in the past, using the advice of our controller and so many studis from the budget analysts, we have two-year budgeting going on and that is a serious change from the years past, when we had one offyears. and so the next two years, we have are facing a deficit and kate will tell us why that deficit is there, but we begin by saying that we have got $123

million budget deficit for next fiscal year, but the second year is a little larger, about $256 million budget deficit and put it in context. as past parents of this great city, we used to have hundreds and hundreds of more deficits that have to deal with when the economy was bad. now it's recovering. and i have to thank the public, the business groups, the non-profits and everybody that has been sacrificing to help us balance this budget. because it's their sacrifices that got us through these very hard years. so it sounds like 123 and 256 are not great numbers. they are still serious deficits, but i think we have a spirit, where the parents, the legislative body and the executive branch are working closely together to make that gap closer. we have that, and i want to say, the principles that are guiding me in setting this

budget, i want a sound economic budget. i want the residents and visitors in this city to feel that they have a safe city to invest in and i want a city that is reflective our successes. a sound, a safe and successful city. these are the principles that i woulke the budget to reflect. and that we have very successful sectors of our economy that are helping us perform this. i want to keep investing in those things. i think the big number, the big word this year is less about deficit, although we will make those gaps reach balance, but it's also where we really invest to make this city more safe and successful while we're making it economically sound? that is what is going to guide me and i hope that the public

will understand and appreciate that because in the end it's their quality of life i would like to pay attention to. >> i would like to introduce your budget spouse as you described him, supervisor mark farrell who is also the chair of the supervisor's budget committee. pervisor farrell you were really the person who is going to be spearheading this lengthy, rigorous, difficult process through the board of supervisors and eventually back to the mayor. >> that is right barbara and thank you for monitoring this town hall. like mayor lee i look forward to starting our spouses budgetal relationship going forward. as mayor lee mentioned, i think it's important to note that what we're doing not only having today's online town hall as we talk to members of the public, through the internet and as we are the innovation capital confidant world to do

more and more innovative ideas is to important and we're also holding town halls throughout san francisco. we have six different town halls in the districts of san francisco to make sure that the public is able to speak and listen to the decision-makers and also to give feedback. as mayor lee mentioned so many priorities for our city and i will articulate from my perspective the priorities and running the budget process in city hall. no. 1 is having a very open and inclusive process. we want to make sure everyone's voices are heard. the decisions are going to be hard. we do have a deficit to cover. however, we want to make sure that we hear from everybody. and we're not only having budget town halls in the district, but we're having online town halls and having meetings in city hall all the time. so having a very open process. second of all, managing our budget in a very financially responsible manner. as mayor lee mentioned we want to plan as spouses for the long haul in san francisco and this is about the long-term security of our city, both in terms of

the services we provide and residents that we serve and we want to make sure that the public has confidence that we are managing our dollars and taking a long-term perspective of our city's financial health. and lastly, making sure as mayor lee also mentioned that our budget reflects the priorities of our city, today and tomorrow. the budget more than anything is really a testament about our priorities and priority document and what we value as a city and making sure that our budget reflects that 100% is so important. so we're going to continue to work together in city hall, both with my colleagues on the board of supervisors, with the mayor, great budget director in kate howard, and we're going to have the budget process and hopefully by the end of june/early july and come out to the public with a budget process that we can all agree on and a final budget itself, that again, reflects the value of our entire city and that is our goal >> well, supervisor farrell, and mayor lee, you are the public faces of the city et.

you were the ones that have to go out and get the input and sell it to the public. but what a lot of people don't know is that behind-the-scenes, the mayor has an entire team of worker bees, who work all yearlong, putting this budget together. and that team is led by kate howard, the mayor's budget director. and kate, can you just talk a little bit about the process you are going through? and i think also what people want to know about her, what are the numbers? what does the budget really mean in a way that relates to the public out there? >> great, thank you, barbara. you are right, we do have a small, but mighty team of worker bees who are working hard for the mayor and the city to make sure that the budget is balanced every year. i thought i would take a little bit about the numbers, and kind of why we're in this situation that we are in. so i think most people know that san

francisco is unique in the state, but we're a combined city and county and that means that we have all the functions that a normal city would have, things like providing recreation and park services, police and fire. but we also have all of the functions that a normal things county jail or public health department or a human services agency. for that reason, our budget is larger than most other cities in the state, because we are combined. our budget as barbara mentioned is about $7.4 billion every year. that number will continue to grow as our economy continues to improve. and we spend about half of that money every year on what we call "enterprise functions." and about half on what we call "general fund functions.". the enterprise functions are things like the airport, the public utilities commission, the port, they are essentially parts of city government that

operate like little businesses. they bring in their own revenues and they have to spend those revenues on their erations. and that is really d in the where we spend most our focus when we think about how do we balance the city's budget? we're mostly talking about the general fund and what is encompasses there, the majority of our public protection services, things like police and fire and emergency services. as well as recreation and parks, health, human services, among others. including the board of supervisors, and the mayor's office. sometimes people ask me about where do we get our revenues and so i thought i would touch or a moment on that. in the general fund we get about a third of our overall revenues from property taxes. over a billion dollars a year come in through the property taxes. we also have significant revenue sources including the

hotel tax, business tax, and sales tax that also contribute to our overall revenues that we have available to spend. it's also important to remember that because of our combined city and county nature, we receive a significant amount of support from both the state government and the federal government. in fact, about one out of every five dollars that san francisco spends comes from the state or federal government. and i think that is important to know, especially when we are in a time where -- in particular this year the federal government is contracting their spending. that has a trickle-down effect and it does impact san francisco's ability to continue certain types of programs. so moving on to the sort of current year situation, the mayor mentioned we just recently undertaken our second five-year financial planning process and have identified

more modest, but still ongoing structural shortfalls. that is the gap between how much money the city brings in and how much money we project that we're going to need to spend just to keep our operations as they are today? over the next five years we're projecting that our revenues will grow by about 13%, that is i think very healthy revenue growth. it's a real indicator that our economy has begun to stabilize again after the recession. during that same five-year period, we're expecting that our expenditures are going to grow by 25%. and so the gap between that revenue growth, the 13% and the expenditure growth, 25%, is what is contributing to that structural shortfall. included in that are really most significantly the cost of our employees. the cost for their benefits and the cost to pay them every year. so those are the key

ri finally, i wanted to -- and i have done this at our other public town hall meetings to just share with the public, we have -- we're excited to hear from them today about their questions and concerns. one of the best ways that we have to hear directly from them all the time is from our 311 service. so 311 is our one-stop shop for people who want to call, who have an issue or a concern, that they want to alert the city to. so on a citywide basis, nearly 30% of the calls that 311 gets every month are for street and sidewalk cleaning. so we know there is a real concern about the cleanliness of our city and also about our ability to repave our streets and have streets and sidewalks well-maintained. the next biggest type of call is about graffiti. and so i think those are important things that we're considering as we're developing the mayor's budget. but that is only one source of information and so that is why

we're so eager to hear from folks about their questions and concerns da >> thank you, howard, the director 'rg start with questions in a moment, but before we do that, i want to remind everyone who is either watching this on sfgovtv or is streaming it online right now, that you can participate in the conversation. unlike the town hall meetings that the mayor has been having out in the community, those have been primarily the public giving input. telling the mayor their opinions. this one is a little different. this is actually the first time that you the public has an opportunity to ask the mayor questions and get some real direct answers to your specific questions about the budget. so that is what we want you to do today. we want you to either tweet or email the mayor your questions. do it right now.

i feel like i'm on the home shopping network. [ laughter ] >> you can either email your budget questions to mayor edwin le@sf or tweet them@mayor ed leuse the hash tag sf budget. that is how you can get the word in. let's start with the questions. this was a tweet that came in this morning from van ness, who is asking -- and i think it's a really important question because it's literally going to affect tens of thousands of people in san francisco. how will healthy san francisco change the city's health access program change with the realignment of resources to implement the affordable care act? >> would you, w, that is a great question. i would say from the start that

we don't have the perfect model of what the health care reform is going to do for all of us. we do know it would have to be more and more community-based. we do know there has got to be a movement towards less hospitalization of people, because that is very expensive, to more community-based clinics and a real big investment in community care. we're having some very deep conversations not only with our public health, but with many of the community-based health centers and clinics and community-based centers. having said that our department of public health has a structural deficit. in fact, it has a $40-$45 million structural deficit. we're trying to figure that out

on an ongoing basis and still make sure that all of our health care clinics and neighborhood centers are culturally accessible, affordable. the health care costs are going up. we are facing that even with our own workforce and we're cognizant of again, trying to invest in preventative health care activities. so that we'll have a much more healthy workforce. healthy san francisco is a growing, great program. we started it even before the debate around obamacare happened and because of that debate, we helped lead the whole state of california to establish one of the strongest medical exchange programs in the whole nation. and so we quickly got approved by the secretary of health for our health exchange program. healthy san francisco is a community-based enrollment program that gets an open shot for everybody to get some kind

of health care insurance for themselves. with the idea that people who pay attention totheir healthear wait for critical barriers to hit them, can then bring costs down and keep a healthier society. so we're going to make more investments in that direction and i think that is a guiding principle for us in this debate. i can't tell you today how much money we're going invest in there, but i do know that in the five-year budgeting that we have done, we're increasing our investment in public health to make sure that we articulate the best programs. we're going to have these ideas come through the budgetary process. >> we're getting lots of different kinds of questions, kind of macro questions and the little itsy bitsy questions and this is a smaller question that we'll try to turn into a macro

question. a question from timothy hatfield working at sfo airport and the question is why he can't invoice using emails? why hassle with snail-mail? so let's broaden into the general question is how is the city embracing new technology and is it going to go farther to the point that we're not even using things like conventional postal service anymore? >> that is ght. that is a great question, because to be competing in the 21st century, the public and those that are using the smartest tools to communicate and to send information across, we should in government be doing the same thing. having said that, we have a huge bureaucracy. we have 26,000 employees and they need training. we have systems in place that have been very protective between departments and so they built barriers, so what they got their funding to investment in their systems, they didn't necessarily share in that. because other departments were on different budgeting and so

forth. so we created over a long period of history of government evolvement in san francisco very thick walls that need to be broken down. board president david chiu and i are workinvery hard to instill in our department of technology an information e a collaborat all the different it sections whether it's the airport or muni or dpw or 311, and we have got to make the connections. we have one email system and we're going to perfect that. we just hired a new director of the department of technology. he is coming from the private sector. and i stress that very importantly, because the private sector has got a lot of this down and government is catching up. so we have got the elements and the commitment with our controller, with the board of supervisors, a way to modernize our technology in

government and we're also showing signs of that. some of the first things we're doing we're putting all of our forms online, so that small businesses and those who are start-up businesss can literally drop-down those fos and fill them out as to not to have to wait in line in five or six different agencies to get the right permits to start up their businesses. and to have those forms online, we're a few months away from doing that, but it's a program that started to signal that where we were serious about this and no better area than to help our small businesses establish themselves. get them the benefits that they deserve to get started, and inform them about all the different fees that they have having to pay. and when they pay them online, at hours which they are comfortable doing it, rather than standing in line when they are trying to do their businesses, that is incredible and that is city planning doing it. the building inspection and office of small businesses, all of them are collaborating to make that the best and first

example of how we do business in the city. >> i would like to go to an email that came from from sfvec and this individual is concerned about seniors and particularly the 11,000 seniors who live in south of market, soma, what are your plans for seniors in the new budget? >> first of all, i am a senior as well and i am going to have to make sure that i am not overly biased, but i obviously have a personal passion for our seniors. i used to represent many of them in my legal practice as a non-profit lawyer at the time. you know, seniors have many challenges to live successfully in our city, and so clearly i am very sensitive to the level of services we provide, whether it's nutrition, which is really important. or having a safe place to

interact and be enjoying the full benefits of the city. having said that, we have challenges particularly in soma and market street with pedestrian safety. i want seniors to walk anywhere and not feel defensive about cars and bicycles hitting them. so pedestrian safety is a very big part of the senior agenda. nutrition, we have been advised, is very important. having enough community-based parks and open spaces for seniors to enjoy life in the city, and be having housing next to open spaces and parks, involved with a whole high-level of pedestrian safety is again building communities that respect our seniors. and so supervisor kim, for example, and i, concentrating in soma are looking at

pedestrian safety concentric circle s around senior centers, where seniors life, to pay higher attention as we plan our transit systems and parks and housing. >> senior housing is one of the keys, as well as home health care for a lot of seniors as they get older, and the home health care aspect has been really troubled budgetwise with a lot of state cuts in that area. >> i am a firm believer and i believe this is tremendous support at the board as well, a stay-home health care is the way to go. that should be part of our health care reform. that we have people living their lives richly, in the homes that they are used to. because that prolongs and extends the life of people when they