riding -- they're getting on at one place and getting off at the next stop and easier to manage. like i said we launched this program july 1, 2013 and as of last month we are 1400 riders so it's adding to what we offer with tokens and replaced the other system and had more users besides shelter users and sometimes they couldn't show because they had medical emergencies and by having a routed system and set schedule and how we built up the usage over the first nine months. >> i guess i am asking these questions because i mainly don't know if i should be concerned or we should be concerned that the clients are not getting to their medical appointments, not getting to employment opportunities and so forth because they don't have a token,

and i hate to see that being the barrier to their welfare so the question i have is -- does anybody know what the need is, whether we need to expand the usage of tokens or what? >> that's a very difficult question even for us to answer and that's in part because clients -- i think if we said we will give everybody two tokens a day clients would take them. we don't know necessarily what they're used for. we track the use afnlg the tokens with the allocation of 1200 a month meaning our sites will say superivsor yee two tokens for a medical appointment or whatever, so they are tracking that usage but it's hard to say whether they're turned around. now the shelter monitoring committee may go and a site might not have

tokens when asked and maybe an issue they're out and didn't report to us. we maybe out later in the month but that doesn't happen a lot. usage is balanced to our availability because people know what it's going to be now it's 1200 a month for so many years so it's a really difficult question to ask. i think we would have to look at some sort of assessment means that would tell us what people want and there are people -- i'm not saying this is a major part of the problem. but it's hard to ask people what they want. they will take tokens because it has a monetary value and might use it for other means if they get a hold of them. >> the people that are getting a hold of them now are they abusing that? >> i don't think they are. we're focused on the reservation

site and give them out when they have a challenge and give one to come back the next morning. obviously a transfer is not good for a 12 hour period, and we do see usage of them, but i don't think we have abuse now, but it's probably because we have these rules of people stating what the purpose of their need for a token is. go ahead. >> can we actually test this through maybe a pilot for one or two months? you keep -- i guess in my mind if you have a system where you have rules and uses of tokens and not just giving them away, and there might be actually more demand and they run out of tokens but we don't know what the demand is. can't we have a pilot of one or two months period -- maybe one month and we over supply tokens but

keep the same rules at the end of the period so you would know what your demand would be and it shouldn't cost all that much more. >>i think what we could start with -- again we meet with our contractors once a month so this month we will meet with them. i would like to take this idea to them and see how we might structure that in a way. i get your point. have more tokens available. still follow the same rules and see if there say need for a greater number of tokens and at least we can put a dollar value on that. we do pay full value for it is tokens. we're paying $2 a token and get the 1200 a month. >> the point for me is we're spending money on the shelter and so forth and so forth and

here one extra token for somebody might make a difference in the world and we're talking $2 and extending it in the facility. that's my point. >> what we will do is we will have a discussion with our providers. we think of something and we can stay in touch with and you let you know what is happening on that. i don't have a ready thought how to implement without getting their input because they're the ones who actually interface with clientses who need the tokens. >> no. i appreciate if you could bring it back. >> yes. >> okay. any other questions? >> thank you. >> thank you. any other -- any public comments on this item? seeing none public comment is closed. [gavel] . this is an informational item, is it? so we don't need to vote on anything. madam clerk is there anything else? >> mr. chair we need to take action.

>> we need to take action. >> continue to the call of the chair. >> okay. >> okay. make the motion to continue this hearing to the call of the chair. >> okay. with no objection then this motion passes. [gavel] thank you very much. >> thank you. >> madam clerk is there any other item? >> no. that concludes our business for today. >> meeting is adjourned. [gavel] this is the third year

mayor lee has hoeftded an online town hall and he does it for a very important reason, to enail all san franciscoans to become an active part of the process. this is a city of technology, innovation and social media so we're excited to have this online platform to engage the public in an online conversation about their spending priorities. we want the hour to be an inclusive one so before we begin, i want to explain how you can join the conversation with both your comments and your questions. first you can send abdomen e email to mayor evlwin lee, you have to include in the subject line online budget town hall so we will know that's what it's about or tweet us at mayor ed lee using the hash tag sf

budget. finally you can post your xhebts on mayor lee's you tube back. okay, so let's get started. first i'd like to introduce san francisco mayor ed lee, who is going to start our conversation today. >> thank you, barbara. i'm glad to be here and i'm glad to join supervisor mark farrell, as the public knows generally we have to make an agreement as to this budget and i'm glad we will be working together. there's a lot of priorities for the city and i want to explain and take the opportunity to explain some of them. we now have a two-year budget. we have been just implementing a lot of good fiscal discipline in the city which is why i think there's so much investor confidence in the city that you see all over. there is a lot of construction, there is companies wanting to move in, and we're confident that we can get a budget that will effect the needs of the city.

for me i'm wanting to make sure that we continue those fiscal disciplines that have kept us as a strong city so two-year budget, 5 year financial planning that we have imposed on ourselves, putting enough noipb reserves to get our credit ratings up so when we ask the public to fund special things they would be willing to because we know they will be able to complete them and complete them well just like the sf general hospital which is on schedule to be completed very soon and we're expecting to open it up. having said that, it's about an 8 billion dollar per year budget. and we are facing, surprisingly for a lot of people, and that has been surprised us that we've gone around different parts of the city that we do have a deficit, about $66 million dollars in the next fiscal year and the second year about $133 million dollar deficit. this is reflective of rising costs in the city. it would be two to three times

more had we not done smart things like pension reform in the past or gotten some more confidence in our system to put in reserves. so we're looking at probably this year's being a year where we will be transitioning into perhaps future years to enjoy certain things eeb more and not have deficit problems to face. but i want a city that is safe and we continue to be so and i think a lot of the public understands that at least this first quarter we're looking at some record numbers of less homicides and less violence on our streets. that's a good thing. our education system is very positive and we have a school system that is now being more and more praised for what it's doing and a good part of it is our support for our school

system. we have at this time before the voters in november an opportunity to re-up our support for public enrichment, public education enrichment and children's fund, that would be important, i think, for us to consider. we're also making sure that we have strong infrastructure and i've been before mayor head of the capital planning city administrator and we have put forward a plan particularly for transportation that has a 2030 look that cost the city $10 billion dollars and we want to make a good stab at it, if you will, this november with a $500 million bond. but we have other transportation needs that are within the budget and we're trying to keep it affordable for everyone. part of my budget is to make sure government is affordable as well as other things that are challenging us affordable.

i've been very aggressive to try to build more housing, making sure the budget can reflect support for that, as well as having safe streets and then i want to make sure that the departments, particularly in the areas of health and human services, can continue to be a strong social safety net for those in need. we are a city not only economically successful, barbara, but i think we more and more also want to be one of the most compassionate cities you can find so that people in need find themselves, either loss of a job or disabled or other accidents can actually find help from the city. so having said those very general things i also want to make sure we know that kate howard, our budget director is here today and she has the minute details that we're working on. i will remind everybody that one of the challenges this year is that we have 27 of our labor

unions having to renegotiate all of their union contracts. and that is not an easy job. but i will say we came to an agreement with the first one just the other night and it was by negotiated agreement so hopefully that will spell we're willing to negotiate through agreements with all the other 26 unions and that's part of the budget as well and we're going to be reporting that up to the board of supervisors as we're challenged with all the other needs from departments and from the communities that are telling us what they think and this is another great forum for that to happen so i look forward to the questions being asked. >> you've covered so many topics that are really important and as we get on into this conversation we're going to be asking you and kate a lot more detailed questions about them. but now let's go to supervisor mark farrell, welcome, glad you could join

us. supervisor farrell is the chair of the board of supervisors budget and finance committee so he's the fellow who is going to be present siding over this entire budget debate when the mayor transmit his budget to the board of supervisors. mark. >> thanks, barbara, for having me and thanks to mayor lee for your continued leadership and certainly kate howard, the mayor's budget director, who plays such an integral role to all we do here inside of city hall. it's an honor and also a great responsibility to be chairing our budget and finance committee and we are now entering the heart of budget season, if you will, where there are a lot of all-nighters spent inside city hall by a lot of people but it's an important part of what we do inside city government. what we want to make sure city government does is make sure we are providing for san francisco, that we have a vision for not just this year but 20 years from now. we want to make sure it's a budget hoo

positively affects all san franciscoans and affects everyone's lives in a positive way and also that it's very transparent. part of why mayor lee is doing these forums year after year and we have meetings all in the neighborhoods is to make sure we pass a budget that reflects the values of all san franciscoans. that's an important part of what we did last year and also continue to do. on a personal level, as mayor lee mentioned, despite great economic times in our city, our greatest challenge, those of us intimately involved in the budget, we are still facing a deficit in the city and we need to make sure we not only communicate that but also balance our budget in a responsible way going forward. on a personal level i continue to fight for, as does mayor lee, issues that affect our economy, making sure we continue to have a strong economy today and in the future, that we do things that

positively effect the quality of life for san francisco residents and also that we continue to have a vibrant city. there are so many exciting things happening, the warriors obviously just announced a big project here in town but we have been an exciting and vibrant city not only in our neighborhoods but in the city as a whole. i think we all share the values that we want to make sure san francisco continues to be an exciting place to live. i look forward to the conversation. >> thank you so much, supervisor farrell. finally we're going to hear from kate howard, the mayor's bunket director. she's going to give us a brief overview of the process. >> good morning, everybody, thank you mayor lee, thank you, supervisor farrell. my name is kate howard, i'm the mayor's budget director. with i'm going to do is briefly talk to you about some high level elements of san francisco's budget. as i think the mayor and the s*urp both indicated, a budget really does reflect the

priorities and the values of a city or of a community. it's also a spending plan just like in your household your budget reflects your spending plan for how you are going to spend the money that you have and then in san francisco and in all public jurisdictions a budget is also a legal document. every year the city is legally obligated by its charter to balance the budget no later than july 31st. so this year as the mayor mentioned we are beginning our next two-year budget where we will take all 50-plus of our city's departments and balance the budget for the next two years. i have some slides that you'll cecuming up on the screen momentarily so san francisco's budget is very large. as many of you will remember, san francisco is both a city and a county. what that means is we have all the normal responsibilities a county has,

things like running a public hospital, operating a jail, having a public defender and a district attorney. and it also means that we have all the responsibilities that a normal city has, things like public safety such as police and fire or recreation and park services. we do all of those things. then in san francisco we do more than that. we also operate a water system for the region through our public utilities commission. we operate a public transportation system through the mta, we operate a port and of course san francisco international airport is part of our budget. so that's 7 poib 9 billion dollars, almost $8 billion really reflects a broad rank range of responsibilities the city has. moving on to the general fund, when we talk about the city's budget a lot of what we focus on when we talk about balancing is really about the general fund. and the general fund is essentially the money that is

unrestricted, it's money that's not in our enterprise fund for providing services to the public. the general fund represents about half of our overall budget in the city, about 3.9 billion dollars this year. and the slide that i think is up on the screen shows you that in san francisco in the general fund what we get about, well, the vast majority of that money comes from the taxpayers, it comes from property taxes, it comes from hotel room taxes, it comes from business taxes. we have a broad base of revenues but they are all paid for by you. except we also get about one out of every five dollars from the state and federal government. and that's really largely because of our role as a county and that's unusual compared to other cities.

sometimes people ask me how do we spend our money. and so i think the chart that you see here gives you a high level summary of that. the easiest way for me to think about it is of our total budget we spend about half of our overall expenditures every year on people, on the city's staff, and those are the people that bring you all the services that all of us value, things like police officers and fire fighters, the nurses who work in the hospitals, the people who are producing this event here today, all are valuable public servants who are contributing to the benefits that we all see. we spend the rest of the budget on a variety of other things including contracts for services and other priorities. finally, as both the mayor and

the supervisor mentioned, even in these good economic times the city's revenues are not growing as quickly as our expenditures and it's a hard thing sometimes for people to understand. we are in a time of very, very favorable economic growth. just this coming year we're projecting that the city's revenues in the general fund will grow by more than $160 million dollars. at the same time, though, our expenditures are growing more quickly. and those expenditures are largely driven by the thing we just talked about, by our personnel costs. we are, we have had experienced really significant costs in our pensions as well as our health care costs over the last several years, though i think work done by both the supervisor and the mayor as well as the board more broadly have made some significant headway to bring those costs down for the long-term. just to put some quick numbers

on it, over the next 4 years we project that our revenues will grow by 7 percent and our expenditures will grow by 14 percent. so the task in front of us and the task for the mayor and for the board really is to figure out how do we bring those two things into line over the subsequent two years. thank you so much, barbara, for having us and also for hosting us today. >> thanks, kate, and for those of us just joining us, this is mayor ed lee's twebt 14 online budget town hall. with us today are mayor lee, of course, supervisor mark farrell, the chair of the budget committee, kate howard, the mayor's bunket director, and i'm barbara taylor, city hall bureau city for kcbs radio. quickly again if you'd like to submit some questions or comments you can email mayor edwin lee at sfgov.org, include the subject line sf budget town hall or budget town hall, you

can tweet the mayor at mayor ed lee, using the hash tag sf budget or you can post comments on mayor lee's youtube page. i'm going to put together some of the things all of you said and talk first about city workers salaries and benefits that take up about half the city's budget and that leaves the greater question of how much discretion, mayor, when all is said and done, we talk about an 8 billion dollar spending plan, but on a practical level what you are really dealing with is a much smaller piece of the pie and how to work the benefits and salary fit into that. they very strongly feel that they deserve some good tidings this year after going through the recession and experiencing a lot of pay freezes. >> one of the, i think one of the nice things about budget season, there's a lot of things that don't look nice during the budget when we're arguing over

priorities, but i do enjoy, having been a veteran of city work force for over 20 years, is i get a chance to look at what people are doing and what they are asked to do by law as well as what they want to do to make sure this city is thriving well. and i do enjoy that departments report in and they are telling us what the public is demanding that they do better, whether it's paving the streets better, more stop signs, more street lights, or making sure there's not flooding in our infrastructure or these very key things are really helpful in understanding for the public how the city really works. we have a fairly large work force, as you know, barbara, over 27,000 employees now. and they are in our hospitals. they are under the ground, they are in our streets, they are driving muni, they are operating the port, a very active city, and we're a tourist city as well so we're always trying to invite more

groups to come and enjoy our waterfront and all the things we do and our hotels. having said that, that work force has to be happy, pretty satisfied in what they do. we try to get there, we have some demands that would cost us in the hundreds of millions of dollars that we don't have, so what we try to do is, 1, be honest about what the city's budget is when we are talking to our work force and i do believe, i am joined with the entire board of supervisors to have that honest discussion about what it is that we have to be able to spend. and if we can't keep within those limits then we've got to cut something. and this is where the difficult tension comes in in budget season. i do enjoy that in work force leaders understand this budget and understand its limitations we can have a good conversations where investments can go that help the work force get their job done.

we've been through hours and hours starting out and while we only have one to start, i think we're hopeful that because we got it negotiated with our professional engineers and they are an important part, we can also have similar positive discussions with everyone else. but there is a large part -- and the only unions not in discussion this year is police and fire, public safety did theirs last year, had a couple years extension so we have everyone else who really is the largest part of the work force. they are in our hospitals, they are in our trenches and all the other things that we get done. >> so can you just tell us very briefly what is the contract that you now have a tentative agreement on and what did they get, what kind of pay raises did those workers get? >> well, i can't go into detail only because i want to respect the union's right to ratify what their negotiating team.

>> and what union? >> we're talking about local 21, which is the professional engineers and technology union. they are a very large work force, the ones that i had the privilege of working with at dpw because they were our engineers, they were helping make sure our landslides don't occur, our water infrastructure is there, they are a keep part of our capital plan because they are involved in literally everybody who's got physical assets to have to be engineered and updated and safeguarded. so we spent a good time but we're in multiple negotiations all at the same time and this one was the first, the signal that they wanted to get to -- and they represent a lot of craft, backed up by a lot of craft workers and others. having said that, we both had to compromise. we were holding strong, we thought it would cost us cuts in other departments. they were holding

strong about livability in the city and about the things that they had to give up in the past and we reached that and we're going to respect their, hopefully, the rest of their membership having to ratify that and we're going to report that in detail to the board of supervisors so ta they know how we're negotiating and what that arrangement is. i do think that the board will be happy that we negotiated this one because we've seen other labor strive in the rest of the bay area region that didn't come this way and we'd like to avoid all of that and treat our workers with respect as we've always done. >> the big question, and i think kate just presented what for me was a surprising statistic and that's that revenues are only growing half as fast as expenditures, that expenditures are growing at a rate of 14 percent, revenue at 7 percent at the same time the city, although in better shape than it has been, still has a deficient -- deficit of over

$60 million and it has to close that. how do you do that? how do you match those things up and at some point don't you have to say we simply can't afford to do a, b and c, and make some really tough decisions? >> well, that's exactly the conversations that go across the negotiating table, barbara. >> i'm not just talking about labor unions, i'm talking about programs and services that the city provides. >> that's right. >> perhaps mark farrell you can jump in here, too, and both of you just talk about how you even approach that seemingly unresolvable problem in a way that leaves people not too dissatisfied. >> i think just to go back as well if you think about, there's so many different ways to slice and dice our budget. one of them is to look at the buckets of cost and employees, as has been discussed, is approximately 50 percent of our cost. it's an important part of what we discuss during budget discussions and our

labor discussions. you know, for our city employees, as mayor lee mentioned, it's very important to make sure that we are respectful and make sure that we treat our city employees fairly but that we also make sure that we protect ourselves and planning for the future. and the discretion that we have over an $8 billion budget as kate howard mentioned so well and broke it down, half of that is not within the general fund so we really don't have a lot of discretion within that. then within the $4 billion that we're able to allocate there are so many set asides and base lines where we actually have zero discretion over how we spend that. our true discretionary budget as a city, it's still a big number, it's around a billion dollars, but it's a lot less than $8 billion. >> you must have money for everything. >> what about 5 million for this? our ability to control what is spent is really significantly smaller than