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 lees youtube page. Im 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 citys 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, theres a lot of things that dont look nice during the budget when were 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 its paving the streets better, more stop signs, more street lights, or making sure theres 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 were a tourist city as well so were 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 dont have, so what we try to do is, 1, be honest about what the citys 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 cant keep within those limits then weve 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. Weve been through hours and hours starting out and while we only have one to start, i think were 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 cant go into detail only because i want to respect the unions right to ratify what their negotiating team. And what union . Were 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 dont occur, our Water Infrastructure is there, they are a keep part of our capital plan because they are involved in literally everybody whos got physical assets to have to be engineered and updated and safeguarded. So we spent a good time but were 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 were going to respect their, hopefully, the rest of their membership having to ratify that and were going to report that in detail to the board of supervisors so ta they know how were negotiating and what that arrangement is. I do think that the board will be happy that we negotiated this one because weve seen other labor strive in the rest of the bay area region that didnt come this way and wed like to avoid all of that and treat our workers with respect as weve always done. The big question, and i think kate just presented what for me was a surprising statistic and thats 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 dont you have to say we simply cant afford to do a, b and c, and make some really tough decisions . Well, thats exactly the conversations that go across the negotiating table, barbara. Im not just talking about labor unions, im talking about programs and services that the city provides. Thats 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, theres 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. Its an important part of what we discuss during budget discussions and our labor discussions. You know, for our City Employees, as mayor lee mentioned, its 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 dont have a lot of discretion within that. Then within the 4 billion that were 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, its still a big number, its around a billion dollars, but its 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 that, its just over a billion dollars. Again, a large amount of money but within that we have to fund so many projects that everybody in San Francisco truly cares about so i think its important to note that our true discretion, what we really do have a discussion about during bunket season, is actually a much smaller amount and our ability to control that is very important. So thats where all these intense negotiations come from. Also i think its been very helpful, and this is what the board and our office has done over the years is go from something that was so highpressured when we had a year to year budget to a twoyear budgetary plan with 5 year financial planning. Ill go out to the neighborhoods, ill be out to supervisor farrells district very soon with copies of what people have been coming at him to see what we can work all together, they will be appreciative, other people have been appreciative we may not get it this year because it wont fit or we dont have the priorities adjusted to what they need. But there is an appreciation that we can look two years down the road and say well fit it in there when we have the other things that need to be done before we get there, that allows us to have a conversation thats very inclusive and perhaps even know we are stretching it to even 3 year outlooks, in fact i think that was part of the negotiations with local 21, we didnt restrict ourselves to just the next year. And i think this allows people to say, okay, okay, you are still caring about us, about our needs. We cant get it this year but were going to fit it in 2 or 3 years down the road. I think that allows people to say were still part of it, were not pressured into trying to get everything that we need. By the way, some of the things we want to get do take multiple years to get done, whether its opening a new park or opening a new library, those are things that are invaluable to a community but they want to be included. I think that basic sense that government is listening to us, that were engaging to them and we will respond at some time with things they might feel are immediate but as we talk through it they can see it phased in. I think people appreciate at least that. Theres a number of things coming up on the ballot that are going to impact the budget. We have an earthquake bond coming up, we have a couple transportation measures to generate more money for the mta and muni. We have a possible minimum wage measure going on the ballot thats going to impact the city as a whole and City Government in general. So let me pose this question that someone tweeted a couple of minutes ago, the first tweet we got, and its an interesting one. Some might say its the voice of the silent majority out there who likes to drive. Id like to be able to support bonds for replacing and expanding muni busses, trains and subways, street paving and parking, but as a driver who is over the citys anticar policy i will never vote for a bond or tax that even potentially could include more anticar measures. I hope you recognize how strongly drivers feel about this, separating the bonds is the only way i can see muni gets funding. You know, you recognized this in your state of the city earlier this year when you said its time to get rid of those sunday parking meters. Weve got to give motorists a little break here or were going to have a revolt. Certainly. The larger backdrop is that almost a year ago we put together a task force to study our Transportation Needs. They worked really hard. We had experts from all the different parts of transportation, people that advocate for walking, for bicycling, for automobile and road ways, for municipal transportation, all different modes, and they said that weve got to have some 10 billion dollars plus in the next 15 years to meet all these needs also with a growing population. Having said that, were tackling that with a 500 billion bond that will not raise property taxes, by the way, it still keeps this very good conversation with Property Owners in the city, something that i was very proud with the board of supervisors to have adopted some years ago is our 10 year capital plan does not raise any more. But when we do finish projects then we will use that finish gap to put Something Else in that we need and this is how were doing general Obligation Bonds in the city. But i also said weve got to have a better conversation with people. Because the pressures of everyday transportation in the city are tense. And the road ways are being shared by so many modes and i kind of felt, why are we nickel and diming people on sundays and you know the hurt is not so much paying the meters, its that 75 hit when you get a citation for having been crossed that meter time by a few minutes on a sunday when people are least expecting it and they are trying to just feel a little bit more ease on that weekend, and try to have a more positive conversation with our public that if we start nickel and diming you on those sunday meters would you help us with this bond that doesnt increase your property taxes . Everywhere ive gone, barbara, theyve indicated a very positive thing and im not taking sides on the side versus noncar on this, im just suggesting that we can have a better conversation with the public in general about our Transportation Needs if we dont have these other things that really irk people, these things that are relatively financially small, but they just say you are not, were not feeling you. And i want people to be clearminded in support of this transportation bond because its incredibly important to the municipal railway, to all the Pedestrian Safety projects that we want to happen within that 500 million dollars, to the additional road ways, the designs of our streets. This is how its important and reaches literally every district of the city will get to be touched by this bond and eventually by the 10 billion in investment we want the public to make. Another tweet that just came in, this is kind of right up your alley, supervisor farrell, why does San Francisco have so much inefficiency in muni and homeless spending, more accountability for results, not more money. You have been conducting a series of investigations on homeless spending, there was an article on in the chronicle that said the city spends more on homeless than it does children youth and families, all the public works projects on recreation and parks. Is there a lot of inefficiency . Are there programs that we need to reorganize erie direct and is this the budget to do it . You know i think no matter what organization you are part of, whether its City Government or a company or any other organization, theres always room for efficiency and we are not immune from that as a City Government at all. So i think certainly as elected officials and as people that are really playing an Important Role in our budget we need to always search for ways to be more efficient as a City Government. Thats a neverending story if you will from a city perspective and i think its a big responsibility that we have at all times. In good Economic Times and bad times, whether it relates to buckets of spending, homelessness or mta, from my perspective what we are doing with the homeless in particular is taking a hard look at how were spending the dollars we are spending because thirst a large sentiment that says if we didnt spend that amount of money our homeless problem would be worse. So the reality is from a City Government perspective if you value things as a priority you have to spend money to address those and you want to do it in an efficient way and effective way and make sure the public understands how you are doing it and thats what were trying to highlight but i believe its important to highlight across all departments no matter how we spend our buckets of money. Let me add too in terms of the comment, the tweet from the driver. My family, i drive during the week because i take my children to school in the morning and that makes me use my car. On the weekends we use our bikes, we walk quite a bit, so i feel like our family uses all modes of transportation and i understand the comment. I think this bond, the general obligation bond, is very important as a city but i do think from my perspective we need to do a better job as a City Government talking about it is a zero sum game of drivers versus bicyclists versus pedestrians. Were all in this together and we need to have a conversation about sharing our road ways together and how we can do it on really safer Going Forward. We need to make sure that we talk about that as a shared road way and make sure that we dont have certain segments, drivers in particular, feel they are being attacked or feel like were not doing anything for them. We need to be in this all together and i think as mayor lee mentioned thats the conversation we need to start having Going Forward because i dont think that dialogue is healthy and i think we need to change that Going Forward. Just a followup question on homeless spending. You said theres a school of thought that if we werent providing these programs, spending this amount of money, that the problem would be even worse, even more people would be on the streets. Theres also the opposite argument, that if you provide the money you will end up with a greater homeless population, attract people who get homeless services. And i remember when ed riskin, who now runs the municipal transportation agency, was the head of public works and his solution to the litter problem was to remove trash cans. I never quite got that counterintuitive thought, but thats what happened. Im not sure what the outcome is. But mayor lee could you just kind of talk about where you come down on just this general idea of do you use more money, do you use less money, whats the right fit to most efficiently address the problem . I think i join with supervisor farrell, we have to think of smart money, not more, not less, but how do we use what we do in a smart way . When we look at the data and the data tells us a lot, los angeles had an increase in their homeless population, almost double digit. So did new york. We did not. We held steady because of our strong message that we wanted to build housing with Supportive Services on site just like we did with the renee cassanava project the other day, 120 units, with onsite Supportive Services. And you should see the smiles on peoples faces. Thats my true belief p where all of our programs direct us. Having said that, we are looking for better outcomes. Yes we are dissatisfied when time and time again the very individuals we are offering shelter and Services Come back to the same loop, what are we doing about that . This is what i think supervisor farrell and i had significant hours of conversation on with our health department, with the Human Services department, how can we humanly focus on those five or six hundred people and do better and have a better outcome. This is a conversation that has to incorporate our judicial system, our criminal justice system, but our Health System as well. We have to have better answers and we believe we can find it in the near future and then the smart money will head in that direction, not just more of the same, that perhaps might end just increasing the population rather than decreasing it in a humane way. Theres a question that came in, basically how do you prioritize what you spend money on, what Different Services . It was a question that i had as well when i was preparing for this. You know we have all of these issues, Public Safety, health care, affordable housing, education, helping the homeless, i could probably spend the whole hour listing all of the different needs. Could you just talk about, not fils philosophically, but when someone wants you to hire a new Police Officer and someone else wants you to hire a new gardener and you dont have enough money to do both, how do you make that decision . Is it political pressure, is it how does it happen . I hope its less political pressure and more the agreement with the board about what the performance is. I think when we present the budget and the board has time to review it, we call up all of these departments and they are asked and they have to have the data and they have to prove that the money we gave them last year, did they spend it properly, did we get results, positive, did we get the roads fixed, did what you promised in that get done . Did we have some outcomes that we could be proud of . Because thats ultimately what i think our public is demanding is that we have positive outcomes on this. This is where sometimes the reality hits where the priorities are, were going to continue trying to be a successful city if we get the outcomes where we put the money in. And when there is not positive outcome then we will go to other priorities. I think its a little easier for the Mayors Office to insulate itself from political pressure, but over at the board of supervisors its the wild west. Theres a demonstration every day, at least every week, by all of these different Interest Groups, mostly about money, mostly at budget time so we have homeless activists protesting, we have had seiu 1021 protests demanding various things in the budget, we have had twitter google bus controversies. And im just suspecting, when i look back when mayor willie brown was in office and he tried to shut down the Critical Mass then and now, what Critical Mass wanted, and they were relentless in their friday, last friday of the month protests around the city, what we have today are bike lanes that we didnt have before. We have all of this Pedestrian Safety and Bicycle Safety that we didnt have. So i guess thats a long way of saying how much were supervisors influenced when it gets to budget by all of these Interest Groups . My hope is that were influenced by true policy interests at the time of the budget. I know the Mayors Office is not immune for people advocating for certain budget priorities, protesting against certain things they dont believe in. It is great we are developing in Greater Public infrastructure, bike lanes included. I wouldnt necessarily attribute it to Critical Mass but thats part of our political process. We go through budget times and people voice their priorities and their concerns and thats part of the conversation we have as a city. Waking on to what mayor ed lee said, we have to look at all the things the public and San Francisco residents demand of us as a City Government and expect us to provide and some of those things are invisible. The people digging up the roads. Theyre not invisible at all. Its easier to pay people to dig up the streets than to pay people that work for park and youth, that impact peoples lives. Its ultimately priorities at the end of the day and its ultimately a balancing act and theres never really a bad priority but again we and i know mayor lee and kate howard shares this sentiment that we need to be responsible about planning for today and for the future as well. And as mayor lee talks about all the time, this is about making sure that people feel confident in our city not just today but swoot future. You know as a parent of three small children i want San Francisco to be healthy30 years from now, not just today. So its balancing those priorities and i think were doing a great job of that but you know what, its an interesting process, if you will, and it gets heated at times but thats what its all about and thats why we have budget season here at city hall. Let me give you another example. Just over the past couple weeks theres been a lot of pressure and i think even legislation at the board of supervisors to increase the dedicated amount of money in the general fund for children youth and family programs, to increase i think from 3 to 5 percent of general fund spending, which is a fair amount. Is this the budget year to do that or is there any budget year to do that . I mean theres generally the issue about discretionary funding and whether thats a good idea, but specifically does this program rise to the level of something that should have more funding year after year . Well, my approach is listening to that i think we have to break it down. What is it that is reflective in that request for an increase . Because that increase is not just for one or two years, its going to be a carve out, an increase of a setaside that will be at least 10 to 15 to even 20 years, so its a big deal. And we have to be very careful when were looking at that because the impact of it is not just the great feeling that were going to support kids. I get that and i want that feeling as well as anybody else. What do we potentially impact by that increase . And in the charter, an increase in one of the setasides means a decrease in the other setasides and wib that charter there are setasides for libraries and for transportation. So there is a critical discussion that has to happen here not just a feel good, we got to support our kids and children and families, thats something i would love to do. But the really specific thing is, okay, if you increase there, where do we have to cut because its a finite pie, it is not a growing pie. I do want to look at specifically what it is that we can do to assist the growth that we have with families in the city. We have alternative viewpoints about whats going on there and we need to, i think, support things that might help us in the future but not necessarily without the consequences being handled as well. So it sounds as though you would be leaning against increasing the set aside. Well, i try not to say for or against, im just saying that our assessment has to be were willing to take the cuts in other places in order to support this. Thats the conversation that i must have with the board of supervisors and this is where weve got to have some agreement on. So you are a dad, how do you feel about that, and a member of the board of supervisors thats going to be taking up this very issue . Obviously as mayor lee mentioned for me spending money on childrens priorities is, its a given. I think we need to be doing that as a city. I talk about it all the time. We have the lowest percentage of children in our city of any major city in the United States and we need to do a better job. But, you know, as we look at this for instance spending increase potential, its in the context of the entire budget. Its in the context of what else are we giving up if we do that . Im open to that discussion as i wleefrb mayor lee is, but we want to have a whole sum discussion. You cant be a bull in a china shop and say were going to spend money on everything and then realize you have nothing left at the end just because you have a few priorities you want to take care of, its in relation to Everything Else we spend money on in the city. We want to continue to hire more Police Officers, we want to make sure we have gardeners in the parks. Its going to be a conversation we will be having over the next few months but it needs to be wrapped up, as are all these other great priorities we have as a city, it needs to be wrapped up in one whole sum discussion, not take willen individually. Mayor in your state of the city in january you talked about the importance of raising the minimum wage but youve kind of hedged on what that amount should be and now theres a 15 an hour proposal out there. Is that something you support . And how would that impact the city budget . I definitely support an increase in the minimum wage. I signaled that that was part of the affordability agenda for the city. Low wage earners cannot survive in the city at 10. 74 an hour. I think theres general consensus that thats true. Then how do you not hurt job