11-12 base budget to the mayor's office. i'll start my presentation with an overview of the mayor's budget instructions and then spend the rest of the presentation talking about revenue as we expect revenue generation to again be a significant portion of our budget solution for the coming fiscal year. at the end of november, the mayor's office issued budget instructions to city departments. and as you know, at the start of the budget process, mator's office developed general fund deficit -- the mayor's office developed general fund deficit projections for the coming year. this year the mayor's office is projecting a citywide deficit in the amount of $379 million. for fiscal year 11-12. but as you all know under the city's charter, the budget that the mayor submits to the board of supervisors on june 1 must be balanced, revenue and

expenditures must tie. so this $379 million deficit has to be erased in the next six months. it's important to note that this deficit number is going to continue to change in the next several months. there are a number of external factors that -- both external and internal factors that will change as you all probably saw in the newspaper, the city's retirement projections have increased for the coming fiscal year. that was not assumed in these numbers. and then as an example of an external factor, the state budget will have an impact on the overall city budget as well. so we will be in regular communication with the mayor's office over the next six months about the changing deficit numbers. and what the changes mean for rec and park. so in order to solve their $379

million general fund shortfall, the mayor's office issued three budget instructions to departments. the first four rec and park was to ask us to propose revenue enhancements or expenditure reductions, reducing our general fund support in the amount of 10% or $2.64 million. they additionally requested that we submit 2.5% of that 10%, $660,000, to them in the form of a mid-year budget reduction by december 21. we did this. we have vacant positions which have created salary savings in the current fiscal year. so we offered them $660,000 in salary savings that the mayor's office has accepted that 2.5% reduction. and then the third instruction that they gave us was to submit a contingency reduction plan

equal to an additional 10% of our general fund support or another $2.64 million. and i just want to pause here and remind everyone that hour base budget is the budget that we will submit on february 22. that's included within the -- we load the base budget into the city's financial system, into the budget system. the contingency plan will be on paper and proposals that we submit on paper and then we negotiate those proposals with the mayor's budget office. and we will submit -- we will talk through the base budget and submit that with your approval to the mayor's office on february 22. and then the contingency, we will have additional conversations with the commission and propose to submit that to the mayor's

office at the end of march. in addition to meeting the mayor's budget instructions as always, the department must submit cost increases and address the loss of any one-time revenue. so added together, this means that the department has been asked to cut $6.8 million from our 11-12 general budget. as i just mentioned we have given the mayor's office a $660,000 mid-year budget reduction so that's taken off the top. and that means the challenge that we are currently looking at is $6.1 million. the base budget that we will submit to the mayor's office equals $3.5 million reduction and then the contingency will be $2.64 million. just to put that number into perspective, over the past seven years, the department has been asked to cut its general

fund support by $43.6 million. and as we all know, last year, we were looking at a $12.4 million cut. so $6.8 million. that's real money. doesn't quite rise to the level that we were looking at last year. but it will still take a fair amount of creativity on the part of staff and the commission to solve that problem. so as you know, last year, we met that enormous budget challenge by working with staff, with the community, with our stakeholders, and with you to develop seven budget balancing principles. we used those principles to help guide the trade-off decisions that we were making as we were preparing our budget. we believe that these principles remain sound and we to use them again as we deliberate about the budget for the coming fiscal year. so just to quickly run through

the principles, the first is to preserve and promote our mission by creating a financially sustainable department. the second, protect our ability to provide clean, safe, fun and well maintained parks. three, protect our mission to provide responsive and relevant recreational choices to all of our citizens, provide low-cost and no-cost opportunities for youth and seniors and ensthur that ability to pay is never a barrier to participating in our program. number four is preserve our responsibility as environmental stewards by investing in conservation and sustainable practices. five is to work with the community to enhance opportunities to support the department. six is to preserve our citizens' capital investment in parks and facilities by identifying dedicated funding

for ongoing maintenance. and number seven is to invest in systems that are user friendly, improve access and service delivery, and to provide training and support for our recreation and park professionals. so working within the framework that these principles provide, we're in the process of reviewing our revenue and our expenditure budget and exploring ways to increase revenue or reduce expenses in the coming fiscal year. and tonight i'm going to focus on the revenue side of our budget. and as we start to talk about what those revenue options might be for the coming fiscal year, i think it's important to give some context for those decisions. so this slide and the next are a snapshot of the department's revenue budget for both this fiscal year and last fiscal year. the department benefits from a wide variety of funding sources. both special fund and general fund. and we have three primary

special fund sources as you know. these include the golf fund, the marina yacht harbor fund, and the open space fund. and all told, we generate a little over $60 million annually in the current year from power special funds. the department is enormously blessed by owning a great deal of property and resources and those resources and that property generate over $30 million a year in earned revenue for this department. those resources include for parking garages, candlestick park, our recreation facilities, and fields, the teagarden, and many others. in addition to the revenue that we earn, we also benefit from prior year savings as well as a general fund subsidy and the amount of $34.7 million. this slide demonstrates the breakdown of our earned

revenue. as you all know, in the last year, the department has made a clear decision to focus on revenue generation as a means to solve our significant budget challenges. and through the hard work and concerted efforts of our revenue division, we were able to increase the amount of budgeted earned revenue in year by $4 million. so we went from a budget of $26 million in earned revenue in fiscal year 2009-2010 to a budget of $30.9 million in earned revenue in the current fiscal year. and we did this in big ways and in small ways. everything from the outside lands concert to new food carts in parks. and we think pretty clearly that our revenue strategy is working. this slide is my favorite slide in the entire presentation. and it just shows the trajectory of revenue growth, earned revenue growth,

particularly over the past couple years, is the upward trend is unmistakable. and i believe is going to continue. so as you know, we have a number of proposals that are included in the 2010-11 revenue budget. a number of initiatives. and i just thought it would be worthwhile to walk through some of those initiatives. we have successfully implemented an antique fair at candlestick park. we are in the process of creating a store at the beach chalet. we just had a very long conversation about implementing bike rentals in our parks. we have implemented special events at candlestick park. we're working on car share. we are working on a new stowe lake concessionaire and a very successful run with the peter pan experience at sue berman

park, and working on a new concessionaire for coyt tower and many mobile food vendors in our parks. we have a new lease for portsmouth garage. just at the last meeting approved segue rentals in golden gate park. we've implemented a tourist fee for entrance to the botanical garden. we have very successfully implemented the outside lands concerts. we have a new lease with the pga tour at harding park. we are working on a pro shop at the golden gate park tennis courts. and we are increasing concession revenue at union square through our relationship with cafe rule. pending initiatives include revitalizing the boat house at lake merced. we have an r.f.p. out for that. urban markets, the marina degauzing station, additional

mobile food vendors, putting a lease into the mill rights cottage, implementing merchandise carts in our park, and also bringing a zip line to park property. the partnerships and resource development is also working very hard on philanthropy. both on the capital and then more importantly for this presentation on the operations side of the department. they've been very successful in finding people to support park operations. so adopt a park for speedway and marks meadow. endoug a gardener at crocker amazon. endoug joe lee rec center. we've had a successful fundraiser at the herps theater for camp du jour. we have been enormously successful in donations to our scholarship fund which is very important. we had a successful gala with the san francisco parks trust

this past october. we had a fantastic series of events that the partnerships and resource development division found funding for around world cup at civic center. we had a fundraiser for the peter pan experience. we've been working very closely with san francisco parks trust on the gear up campaign to provide furniture, fixtures and equipment for our newly renovated recreation facilities. and as phil mentioned today, we've secured a grant for the soccer field at mission. other philanthropic ventures that we're currently working on include additional fundraising for camp lejure. looking for someone to endowing a park and a mission rec center. we are working on a fundraiser in conjunction with hardly strictly blue grass. we are also looking for endowed support for our community

gardens and for dog play areas. as well as support for the golden gate park tennis complex. while this presentation is primarily about revenue, as we're talking about good news in terms of revenue, i also thought that it would be useful to take a minute to highlight a couple of really great things that are going on in our expenditure budget. we had a couple of key successes we wanted to highlight. the first is we have been working very hard collectively as a staff to reduce our overtime expenditures. and i think this slide demonstrates we've been very successful in doing that. over the last two years, alone, we've saved $430,000 in overtime expenditures. and between fiscal year 2005-2006 and the current fiscal year, we've saved over

$1 million. we're also working very hard to reduce our workers comp costs. and really fantastically in the first six months of this fiscal year, the department has saved $247,000 on our workers comp claims versus the same period last year. and we're working very hard to change the culture in the department and improve safety in the department. we are maximizing transitional work so that people who are available to come back to work can do so. we have a place to put them. that both reduces our costs and it increases people's productivity. we've created a staff safety advisory committee. as well as a bimonthly safety newsletter. in terms of ideas that we're currently considering for conclusion in next year's

budget, they fall into three primary categories. and i just want to pause for a moment and stress that we are -- this is very early in our process. and there's not much here that's going to change between now and when we submit the budget in february, and we will be back with you to really give you the particulars of each of these proposals as well as hard estimates for what the revenue that each of these proposals would generate. as phil mentioned in his general manager's report, we are being very successful in terms of implementation of our new recreation model. and we actually have a number of initiatives that we began in the current fiscal year that are coming to fruition. we're actually really seeing the fruit of our success. these are all areas where we're earning more revenue in the current fiscal year than we have budgeted.

so we will be able to have our budgets reflect that change in the coming fiscal year. and that includes increased revenue from the teagarden, new swim lessons and aadequatics programming. enhanced summer camps and recreation programming. as well as seeing additional revenue from field permits and special events in the current fiscal year. as we did last year, we expect that we will be able to budget revenue from a variety of city sources. including the lease of spaces at civic center garage, the commission approved that lease in the current fiscal year but there will be more money in coming years. having the downtown park fund support union square again in the coming fiscal year. and then we hope to partner with some of our sister city agencies to offer wellness and

recreation services to their staff and to be compensated for those services. we are also looking at a number of new revenue proposals. including continued expansion of recreation and aadequatics programming. -- aadequatics programming. we are looking at some recreation fees that are currently below market to see whether it would make sense to increase those fees somewhat. we are looking at adding additional concessions and park amenities. we are very likely to propose an r.f.p. next year for the golden gate park carousel and the birthday barn as well as looking to add a miniature golf course to the department's portfolio. and an additional special events. we will look to capture permit

revenue for existing commercial activity in our parks. the palace of fine arts will once again be available for weddings. it's been offline for a number of years is the facility has been renovated. it's a fantastic place and would be a really cool place to get married. we generated a pretty significant amount of revenue from the palace before it closed for weddings so i expect that will come back and hopefully be even healthier than it was before the facility was closed for renovation. and then we're reviewing all of the ideas that we received from our staff last year for revenue generation. and i just picked three examples that to me sounded both interesting and/or fun. having our staff offer gardening classes to the public which i think is a really fantastic idea. looking at parking -- some kind of a parking concession at

gildman playground during san francisco 49ers game. and then just a fun idea, i don't think it would be an enormous revenue generator, but dodge ball tournaments. offered by the recreation division. >> i hate dodge ball but we should totally do that. it's the scariest sport on the face of the earth. do it. do it! everything. oh, shut up. give me a break. whatever. [laughter] so that is -- those are some of the early revenue ideas that we're looking at. they said we'll flesh those ideas out. we will have additional ideas and we'll be back in front of the commission next -- at the next meeting, at the operations committee meeting with more detail and with numbers attached to our proposals. we had an all-staff meeting yesterday to give our staff a heads-up about what's going on

with the budget. we wanted to talk to them before we came and talked to the commission. and we have once again asked our staff to participate in finding solutions to our budget problem. so we've asked each program park service area and rec competency to develop a plan in the amount of $25,000. that can be either revenue increases or expenditure savings and i've asked staff to submit those plans to me by february 4. we are also having -- we will initiate labor management meetings with our staff as we did last year. we were very successful in partnering with our labor partners on budget solutions. we actually have our first meeting with sciu tomorrow morning to start to walk through the budget.

and our different proposals. and we will have at least two all-staff meetings. we had one yesterday and as we get further along with our balancing solutions we will have another meeting with staff to keep them up to date on what we're looking at. as we did last year, we will have pretty significant budget outreach. as phil mentioned, at the start of the meeting, we will be having four community budget meetings. one on the 25th, one on the 26th. one february 2 and one on february 3. and we of course from 6:00 to 7:30 and we encourage all of the commissioners to come out as well as everyone in the neighborhoods, communities, stake holder groups, to come and talk to us about the budget. as i mentioned, we will be having labor management meetings. i have two more rec and park commission meetings to present

at for the base budget submission. i will be at prozac on february 1. we will be having meetings with our park partners. and we expect to have conversations, budget conversations during the neighborhood parks council, quarterly, town hall meetings, it just happens that it's scheduled for january 29 which actually the timing is very nice in terms of our budget process. so in terms of key dates, i will be in front of the operations committee with information about the -- an overview of the department's expenditure budget. and some additional revenue and expenditure reduction items on february 3. we will bring the base budget for the -- to the commission for your approval at our meeting on february 17. and then we will submit the base budget to the mayor's office on february 22.

i will be in front of the operations committee on march 3 with a presentation on contingency budget proposals. and then be in front of the commission on march 17 asking for your approval of our contingency budget proposals. and then as always, the maor submits his budget to the board of supervisors on june 1 and the board at that point will hold a series of meetings on our budget and all. other city budgets as well. -- and all of the other city budgets as well. that completes the presentation and i'm here for questions. >> commissioner lee. commissioner lee: the other piece of the puzzle, the funding puzzle is philanthropy. and our parks partner is the parks trust. and i was wondering if you're going to -- we've been talking about maybe getting a report about how they've been doing in terms of fundraising. and then -- and they've done an audit recently. could we schedule -- can we

schedule a presentation about how much they're bringing in and how that's helping us meet this gap, if we can show, you know, it's a little hard to tell what impact they're -- their giving is making on our budget and the numbers that we have here. so i would like to see that perhaps scheduled for future meeting. >> commissioner, they are actually coming in. they are already scheduled for our february meeting to give an overview of their prior year. which i think you're going to be very pleased with. >> and i would like to see that prior versus prior so we could get a gauge of a trend. just not the first -- just not last year but the year before so we can see where -- are they increasing giving, is increasing in what areas and so forth. the other -- >> i might add to that, commissioner, that it might not be limited to them. because having gone through that fine arts presentation and

seeing the $16 million that was raised through the foundation and the state, etc., there's a lot of philanthropic money that helps us that isn't always clear and apparent. >> i think it would help us to have -- as clear of picture as we can. because if philanthropy is making a difference, we would like to definitely tell that story. and encourage it as much as we can. >> i would suggest, commissioners, that if we can pull this who have for the february meeting, that maybe we have nicole provide a general overview of philanthropy, parks trust is -- is one of our very main and strongest philanthropic partners but not our only one and the other thing to keep in mind is there is a difference between philanthropic support of operations and philanthropic support of capital. but with that said, i think it would make sense for us to do -- as part of my general manager's report, we can

agendaize it separately. to provide a little bit of an overview of the philanthropic support that we've gotten from our various park partners in the past year. >> that's certainly a story we should tell. the other question we had, and with one of our big revenue generating events is the outside lands. last year they went from a three to two-day event. and i went both days. and the third day, could we have increased our revenue since we get a piece of the ticket sales. my question is for this year, are we going to go back to the three-day. that was in the contract. and we have -- we have revenue sharing. and will that -- or are we going to stick to the two-day? it is our biggest fundraiser. so this is something to consider as we get closer.

>> sure. >> commissioner harrison. vice president harrison: katie, what was our total department last year, 10-11 fiscal year? >> last fiscal year -- vice president harrison: $117 million was it? >> the operating budget last year was $117.3 million, i think. our operating budget in the current fiscal year is $117.9 million. vice president harrison: so you're looking for fiscal year 11-12, $100 million -- for next year? >> i don't know. i have no idea what next year's is going to be. >> commissioner, one of the interesting things about the way we are operating -- our operating budget is reported and has to be understood is that our operating budget, we are also always required to absorb all of our owned cost increases. so while our general fund, we're being asked to make cuts. but we're also being asked to absorb cost increases. which is -- which is why it is

kind of difficult to sort of calculate the train. we made $12 million of cuts last year. and our overall general fund budget was roughly comparable. and in part, that's because we had to absorb no wage increases, health and pension, increases, increases in work orders from other city departments, increases in various -- from -- in utilities, in water. it makes the story sometimes somewhat convoluted. >> ok. commissioner lee, did you have another comment? commissioner lee: quick one. very quick. on your parking garages. you show $1.5 million increase from the -- from 2010 to 2011. >> uh-huh. commissioner lee: what accounts for that? >> i would say the single largest, there are ups and downs in all of the garages. but the single most easily