>> if they are ongoing in nature. >> so then the interplay is to the extent that those items, to the extent that they are one time in nature, then we can expect the cumulative savings to drop, and then, anyone giving year's worth of cuts to be higher really? >> that is correct. to the extent that we use one time solutions, we will have to have bigger budget targets in each year of the plan after that. the goal here, which i think you are getting at accurately, is that if we can hold ourselves to kind of that policy goal of not using, not relying on one time solutions to balance, it allows us to have relatively still challenging but relatively manageable levels of production targets that we are going to have to make over each of the

years of the plan, and i do not want to minimize that because those are always difficult policy decisions, but it we hold ourselves to that goal, then on the out years of the plan, we will be in very significantly better condition, and we will have to make less deeper cuts to balance the budget. >> thank appear this is a budget with all hope for but it is often harder to do in reality, so i wonder what we have all four, are you suggesting we pass a financial policy that puts this into requirement, or this is sort of a wish list? >> i would be interested in your thoughts on that. i think it is an interesting idea. we do have the tool of financial policies which also require the plan, and i think, the goal of having a plan and financial

policies is that those would be somehow interrelated. it is the controller's office that proposes the policies. it might be worth asking them, but i think that is a reasonable thought. if we are saying our policy goal is to have this discipline in future budgets that we could try to think about how we could set some formal policies that would sort of enforce the discipline. >> i understand why it is so challenging to do and why so many other governments do not do it, but we are serious about phasing this out over the next couple of years, we would have to have some target, that it is hard to imagine we could do it without some sort of requirement. do you have a perspective? >> certainly an interesting idea and one were talking about war. i mentioned at the beginning your thoughts on what to do next with a document like this are important, and this is certainly one, and you can lead

us to honor for a week, and we can talk about it next time the item is before the committee, but we do have another whether to propose financial policies to the mayor and the board this fall, but by that time, the mayor will have adopted the financial plan for the city in whatever form that takes and thinking about ways we can use that financial policy-setting process to reinforce what the board and the mayor have indicated our their goals in this process seems to make sense to me. supervisor chiu: thank you. supervisor wiener. supervisor wiener: i just wanted to second that, and i know we have had discussions about this in the past. we hear over and over again accurately that even in good economic times, we have these structural deficits. we have to go and ask for more and more tax measures, which largely are rejected by the voters. we have to restructure the way we budget in san francisco.

my concern is that the second of the economy picks up in a way -- and we are already seeing increases in tax revenue, but the second week start seeing decent budget years and have money to do things with, we are going to start spending like drunken sailors again. it is like we cannot help ourselves. i sort of feel like while we are in the midst of a budget where people might be more open to making long-term structural budget changes so that that does not happen, we have to strike while the iron is hot and actually make these changes before we start having the money that we hopefully will have in the future and so that we can make sure that we are spending in the future on some of these capital needs and other needs that are so important but have been neglected. supervisor chiu: -- supervisor

chu: thank you, supervisor, and at the many of us are interested in that conversation because it is so important. one of the things that i would like to see when the item comes back before us, as you are giving thought about what supervisor chiu ask, as you think about how the reserves come into play with the financial plan would be helpful as well. so what our balances look like and whether and how we get to the levels we have said, given our policies that we have passed. >> we can do some of that modeling for the committee using some of the tools we have built to produce this document. we can certainly do that. supervisor chu: thank you. >> lastly, not to belabor this point, but i think it is worth noting that this chart here shows if we do follow this policy of using ongoing solutions, that over the life of the plan, the level of

department of solutions that will be required to balance the budget, so the level of operating reductions at departments, will decline significantly as a percentage of the total solutions. over time, if we have this discipline by the end of the horizon of the five-year plan, the cuts that we will need to make to achieve those savings or the revenues we will need to generate will be less deep. so that is all i have for you. again, as we have already kind of talked about, we have got a plan to be back on this topic next week. so to the extent that you have talked about additional information, additional content that you would like to see, please let us know now or over the course of the week so that we can prepare for that next year.

supervisor chu: thank you. supervisor kim. supervisor kim: [inaudible] on page 13. i just had a couple of questions about the bigger differentials amongst the fiscal years and interest and investment income and rent concessions. i noticed that most of the other line items were pretty stable, but there were some wide variances here, particularly in fiscal year 2012 through 2013. >> the chart on page 13, for those that do not have that in front of them, is outlining the growth rate assumptions used across different revenue sources in the plan. the federal and state declined you see in year one of 12.6% is largely due to the one-time loss of federal revenue is used to

balance the current year, and then our expectation for both federal and state revenues during this time is very slow growth, and that is consistent with what we have seen in recent years from both federal and state government. it is one of the underlying problems. these revenues fund about 15% of our general fund budget. we have cost inflation on the whole of our general fund budget. that is what lies there. your question about interest investment income i will have to look into because i do not know what is driving that variability. it is a relatively small revenue source in the general fund, about $20 million of the $3 billion, but there is certainly something going on underneath those numbers that i am not familiar with. i will have to research and get back to you at the next committee meeting. >> also, that seems to be with the biggest variance was for both of those items, nine items. >> i will have to look into that. supervisor chiu: -- supervisor

chu: thank you very much. does that conclude the presentation? >> yes. supervisor chu: ok, so why don't we open this item up for public comment? are there any members of the public who wish to comment on this item? >> good afternoon, supervisors. let me comment about process. it would be helpful to the public if the public could have access to the documents that you are speaking of. you know, you have a lot of vacant, dart fiber. you could use some of that putting some of the information and public documents online said the public can give you more substantive public comment that is offered by walter. secondly, i think you should request that both the controller's office and the

mayor's office give you some recommendations as to how you eliminate these deficits that will occur over the next five years. thank you. supervisor chu: thank you. next speaker please. >> good afternoon. while listening to this presentation, since the five- year financial plan was only required by proposition a in 2009, i would like to pose the question -- before 2009, does that mean that our leaders may be for the past 20 years can be accused of dereliction of duty for not having enough foresight to manage the budget process for the last 20 years? i'm just throwing that out for consideration. in terms of solutions, it seems like everything obviously is

pretty broad, so i would like to make a few concrete comments and suggestions for consideration. one, it is pretty obvious our leaders need to distinguish between needs and wants. just imagine yourself like a typical mother or father, and you have to tell the children, and " this is what you need, and we are not going to pay for what you want." that is pretty common sense. secondly, as i think, technical solution is to cut from the top down. i think the unions will not object to whatever happens as long as you cut from the top down, and then, a final solution is across the board uniform cuts in salary and benefits. i doubt if any public workers will object as long as everybody is cut by the same amount and everybody is treated fairly. all i'm saying is that a lot of

citizens in san francisco quietly whispered, "white do our leaders not understand some pretty common sense solutions -- "why do our leaders not understand some pretty common sense solutions?" try to understand that you are running the city like a bunch of young children who need to have a backbone. thank you. supervisor chu: thank you. are there any other speakers who wish to comment on either one? seeing none, public comment is closed. i want to thank the presenters here just so my colleagues know, i believe the supervisor chiu introduced the resolution accepting the five-year financial plan, and that will be coming before us. these are hearings really to get us to start to understand what is in the five-year financial plan. it is a pretty lengthy and large document, so we will be hearing

this item again. in the ensuing weeks, if we could ask the mayor's office with the assistance of the controller's office to help us think through a couple of the questions that were raised today because ultimately, we will be approving a five-year and a to plan that puts out a road map for how we consent to close the gap. one thing that's supervisor chiu mention was with regard to policy recommendations to deal with the boom and bust cycle of spending that we do have in the budget. the other item that i am interested in is if we could take a look at the different reserve levels that we would see over the time of the five-year plan. finally, another question that i would just add is the five-year plan, like anything else, assumes a certain type of economic recovery. assumes certain levels of revenue growth over time, and i wonder if you would be able to share with us what and how this five-year financial plan would swing if we thought that

revenues would be better or if we got a worst-case scenario would occur, where the big swings would be and how the plan might have to readjust assuming that. and for my colleagues, if there are any other specifics that you would like for the upcoming presentation, please either let me know, and we can share the affirmation or directly let the mayor's office and controller's office know. >> one other thing to add, and we will look at the scenarios on record, but in addition to what we talked about here, there is also -- actually, the bulk of the report is focused on specifics -- specific departments. many of our large departments have write ups in the plan. there are a number of issues outlined in those ridings. we have a section which is relatively new information on our upcoming i.t. plan.

so all those sections, i think, are things that we, to the extent that you had issues you want to call out in the sections, we did not want to have every department here, since we have been and are going to be doing that on budget hearings, but to the extent that there are issues that you want to call out on those, we would be happy to do that as well. supervisor chiu: i think you just answer the question i was going to ask, which is i really appreciate all the work that was done on the high level analysis, but i am interested in understanding probably at a later date to drill down department by department to understand what are their five- year plans and was sort of changes and adaptations they are making to policy changes within their fields. i think that is exactly the type upper -- type of hope that we had with these plans. other question i have, and this is not something i think that we can answer now, but typically,

from my perspective, the budget process from year to year looks at prior year department budgets and changes we make comparing your and your department to department. we are often not having a discussion comparing overall budgets of agencies with regard to each other and really tried to understand what our best practices, ratios of how much we spend on all of our major areas. you look at, for example, the federal government budgeting process, they typically have a two-the budget process, where, first, they debate the appropriate levels of military thsspending and education spendg to better health spending compared to other types of spending. then once those major decisions are done, they look to see what is the best way to spend an education budget of a certain number of dollars. that is not something we do here, and those types of trade- offs -- i wonder if there is a way for us to take a step back and think more holistic play that way. but i know you did a lot of work

here, and i know that was not necessarily within the purview of this five-year plan. supervisor chu: with regards to -- i think today's presentation really was a big overview, and i think there probably will be interest from certain members to drill down on particular departments, but i think it would be very long and very -- probably very difficult to do to have every single department come through on a five-year financial plan, so i am wondering if there are particular departments or particular city-wide areas, whether it is i.t. or other things that people are interested in. perhaps they work with the mayor's office quickly so that we can get a sense of what those things are and perhaps we can schedule them over time. >> yes, i would absolutely be interested in hearing. the other thing is there are items in this plan that are sort of, you know, we may want to discuss in the short term because the plan is before you, but kind of in the bigger picture, our anticipation is

that we would also be asking departments as they come before this committee for budget hearings to discuss the contents of the five-year plan, highlight those issues in the context of their budgets, so that might also be another way to kind of get into the details of the departments, is to have them talk through their five-year financial plan sections of their budget presentations to this committee. supervisor chu: thank you. and if that is the interest of this budget and finance committee, to really see and hear the five-year financial plan and thinking broader planning from the province as they come before us, we certainly can integrate that as part of the budget process. do we have a motion to continue this item to the call of the chair? we can do that without objection. thank you very much. ok, can we call the next item, item three please.

>> item 3, hearing to receive update on the recreation and parks department budget for fiscal year 2011-2012. supervisor chu: thank you very much. we have mr. ginsburg here, the general manager for recreation and parks. >> good afternoon. we are going to go a little low- tech today because our computer program -- [inaudible] our jump drive is not functioning. as i think you all know, last year was one of the more challenging years, but to years in our department's certainly recent and probably long term history -- budget years. i am proud to be here before you today to say that while our structural challenges are far from solved, and we still have very significant need, this

year's budget begins to reflect a little bit of a rebound in which, despite a $6 million budget target, you will see and the city will see no layoffs, no service reduction, and no fee increases from the recreation and park department. i think it is useful to start with a quick overview about from where we have come. last year, we had to solve for a $12.4 million budget gap. our strategy was to prioritize revenue over service cuts to the greatest extent possible, so we increased our approach to earn revenue and actually increase our revenues to offset cuts. our budget situation actually forced us to think long and hard about how we deliver recreation, and we completely reorganized our recreation delivery model, which unfortunately, had to reflect some cuts, but did give us an opportunity to take a good, hard look at how we

deliver recreation, and i think these things structurally a lot more better, although, unfortunately, with fewer people. we reorganized our permits and reservation division to not only increase customer service but also to create better systems, so we were capturing more of the revenues, which should rightly come into the department. we also implemented our first gardner apprenticeships program. it is the first apprenticeships program in the state of california in which we had our first class. not only a budget measure, but a very important work force development and professional standards development to give people an entry into the profession and teach them a certain level of professional standards. even with limited resources, this year has seen a very dramatic expansion of summer day camps. we will be offering 30,000 -- capacity for 30,000 programmer

reservations for day camps, including early morning and after-school care for working families. a very robust scholarship fund. it has seen an overall increase of about 16% in recreation programming because of the way we have restructured. that translates to an additional 20,000 hours of programs offered in our departments. supervisor chu: did use a 16%? >> it reflects a 16% increase in the amount of programs we offer. -- did you say 16%? supervisor chu: i'm sorry, you said for the expansion of the summer day camps, what does that look like? >> we offer over 85 different camps. we were just talking about our summer program this morning. we are proud that we are offering over 30,000 summer camp program registrations. we are offering our first specialty camp in glen canyon,

specifically for children on the autism's spectrum, and we will be sending approximately 60 at risk youth at the end of the summer, and those are some of the highlights of our summer camp offering. even with our staffing challenges, we have been able to maintain our park maintenance gore's right at about 90%. we think this number has probably leveled out. we do not see as getting much higher, given the staffing challenges we have had, but we are actually at a five-year all- time high. again, through the goodwill of san francisco voters and the support of this board and prior mayor's through the availability of state grant funds under proposition 84 and proposition 40, we continue to renovate our parks and facilities, so we actually have some upside and optimism with respect to our capital programs.

we focused very hard this year on administrative efficiencies as part of our overall budget solution. we have reduced our workers' compensation expenses this year by $350,000. which is significant. we have an employee safety committee. we had a transitional work assignment program where we will leak -- really were quite hard -- really worked quite hard to get them back. we have reduced our overtime by over $150,000, and we had implemented a number of technology and customer service improvements this year, including our website, which my staff is very proud of calling our award winning web site because we won an award for excellence in the california parks and recreation society. we are not able to take event permit applications online. we now go online recreation and summer camp registration and a currently in discussions with 311 to utilize the system to be able to register for programs. we have got an improved permits

and reservation phone system in a centralized computerized calendar database. believe it or not, just two short years ago, there was no centralized calendar of our permits and reservations, and if you call them one of our staff was on the line, you got a busy signal. turning to 2011-2012, here is our general fund budget challenge this year. like all city departments, we have been asked to reduce our fund support by 10% here with and asked to replace lost revenue to absorb cost increases. we did already make a mid-year reduction to our total base reduction. is about $4 million. we also have been asked to commission the mayor's office a contingency reduction. just to put this in context and remind everybody that there is a little bit of an unfortunate history of this department, this

is the seventh year in a row in which we have been asked to make a significant general fund reduction or stalled for a significant general fund problem. over the last seven years, we have been asked to solve for over $43 million. we do have a series of budget balancing principles, which guide our decisions. these principles were developed last year and reaffirmed this year. it was a partnership between the part of representatives neighborhood parks council, and community parks advocates. our commission, the sanford cisco parks trust, there was a lot of discussion about these vegetables, which were ultimately endorsed or approved by our commission. we want to create financially sustainable department. that has unfortunately cost a lot of difficult conversations, but that is what this department needs. this department must know the resources that it has and be able to plan in program not just year over year, but we just had a long conversation about a

five-year budget plan. we need financial sustainability in our department. our services and our parks touch too many neighborhoods, too many quarters of every street, and too many san franciscans to live with the kind of general fund volatility we have lived with over the last seven years now. we want to protect our ability to provide clean, safe, fun parks. we want to protect our mission to provide healthy recreation for all san franciscans. we focus on low-cost opportunities, and it is our guiding principle, that ability to pay never prevents the dissipation in our programs. we want to preserve our responsibilities as environment stewards. we want to preserve our mission as community partners. we want to preserve our citizens capital investment in parts of the cell is by identifying dedicated funding for maintenance. it is a mistake to invest significant capital in our facilities if we do not have the resources and are not planning

to take care of those facilities adequately. lastly, as i talked about earlier, we want to invest in user-friendly systems that improve access to our services and enhanced service delivery. and of course continue to train and support our staff so that they can continue to maximize their potential as public servants and community stewards. we actually go through a very extensive outreach process during our budget cycle. it usually starts following the mayor's issuance of the budget instructions. this year, rec and park alone had four budget meetings, which i will talk about in a second. we have ongoing labor management meetings and dialogue with our two largest unions. we had regular updates at our rec and park commission meetings and our commission ultimately improve our budget.

we participated with the neighborhood parks council, and also a budget-related town hall. we present our budget to the parks recreation open space advisory committee, and i join many of you at your district budget town halls with the mayor. we held four community budget meetings all across the city this year. we actually did some things a little differently this year. rather than just present our budget and respond to questions and respond to frustrations, we have more of a facilitated budget meeting in which we gave a short overview of where we are, and we had more of a facilitated conversation, and we broke the participants up basically into two groups, and they got to choose which group they wanted to be in. one group focused on what r