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In a clear departure from his predecessor, Ed Lee, the city’s caretaker mayor, stumped across San Francisco’s 11 districts this spring criticizing ingrained budget balancing techniques as “an incredible act of disrespect.”
His big new idea: to encourage nonprofit service agencies to plan their budgets on five-year cycles rather than groping year by year for funds to keep their doors open. That would go hand in hand with the city’s first ever five-year plan, released May 3, which projected a whopping $828 million shortfall five years from now.
The long-view approach to social service contractors has been well received in City Hall. Yet community groups are asking whether his strategy for filling a $306 million budget hole over the next year will yield any better results than that attempted by former mayor and current State Lt. Gov. Gavin Newsom, under whose leadership many deals were struck behind closed doors.
This year, Lee said he hopes to prevent an 11th hour sprint to balance the books when “people could have agreed ahead of time on a core level of services.” At one of a series of neighborhood town hall meetings, Lee said his administration will attempt to get early buy-in from interest groups across the city so there are no surprises when the budget comes up for a vote in July. “That is why we are doing this early — to make sure we have an agreement.”
For the third straight year — ever since the crashing economy sent tax receipts on a precipitous decline — the city is in dire financial straits. The projected deficit represents a quarter of discretionary money in the city’s general fund, said Greg Wagner, the mayor’s budget director.
Wagner said he is “cautiously optimistic” that the worst economic hardship is past. But a report by city budget analyst Harvey Rose predicts that deficits will more than double two years from now.
“The budget is going to be a hard one,” said Supervisor Carmen Chu, chair of the supervisors’ budget committee. “One of the things we heard from the community is: ‘Why do we only hear about cuts?’”
Lee has carved out a clear image of accessibility by appearing on stage at public schools in supervisors’ home districts to explain his approach and ask for ideas. But his policy agenda remains vague, and community groups anxiously await his budget proposal, a document that could result in closures, layoffs and loss of services for city residents.
“It might all be a big set-up,” said Jennifer Friedenbach, director of the Coalition on Homelessness. “He is really an unknown entity in a lot of ways. He is a bureaucrat. He comes at things very matter of fact.”
In fact, Lee’s cuts-only budget contains no mention of new taxes or fees, which could mean more trimming of the Department of Public Health — including a potential 9 percent cut to residential treatment programs and further cuts to the human service agency. That could close the United Council of Human Services and Mission Neighborhood Resource Center altogether, said Friedenbach.
Some worry that such across-the-board cuts will result in further critical losses of social services to the city. “It’s all being done the same way as before,” under Newsom, Supervisor John Avalos said. “I want to be surprised, but we will see.”
Before Newsom left office, he instructed his department heads to scale back by 10 percent, and to prepare another 10 percent in cuts should the city need to slash further spending. In March, it became clear that it would.
Lee insists, however, that his longer-term policies will better reflect the values of the community. “We are going to try our best,” Lee said. “We want the community-based organizations to help us make the decisions. We are introducing a five-year budget plan for nonprofits. I’m not interested in funding programs that only last a year.”
In San Francisco, nonprofit organizations are traditionally funded by one-year contracts, forcing leaders to fight tooth-and-nail for funding every year.
In the past the mayor’s office, in consultation with department heads, introduced a proposed budget at the beginning of June, at which point the Board of Supervisors had a month to amend, or “add back,” money to services cut from the original proposal. Newsom historically received little in the way of consultation from community-based organizations.
In practice, June is a political nightmare for nonprofit organizations, which are forced to aggressively lobby to stay afloat. The process is rife with backroom deals and political horse trading, creating an environment where community leaders have to spend as much time fighting for funding as they do serving the public.
A former city administrator called on to replace Newsom, Lee has framed his budget priorities in three terms: safety, solvency and success. Lee includes public health in his definition of safety, which is significant given the way police and fire unions have squared off with health organizations over funding in recent years.
“I’ve always wanted to define safe more broadly than in the police sense,” Lee said. “If you don’t have the services, lives can be in danger. You need a core level of services.”
Avalos, a mayoral candidate and former budget committee chair who often sparred with Newsom’s administration over policy, praised Lee’s work while remaining skeptical of his priorities.
“I want to talk about the great work he has done in District 11,” Avalos told a crowd of 200 at James Denman Middle School in the Ingleside neighborhood, which is part of his district. Lee has been out to visit Avalos’ turf several times, a surprise for the working class area that was not frequented by Lee’s predecessor. Lee also pushed through clean-ups at Balboa Park BART Station.
“I have gotten the message about youth programs,” Lee told the crowd. “I have gotten the message about job training. I have gotten the message about affordable housing.”
The Excelsior and Ingleside neighborhoods have the lowest per-capita income in the city, and more seniors and children than any other district.
“He is someone who rolls up his sleeves and gets things done,” Avalos told his constituents, in what sounded as much like a challenge about the mayor’s future as it was a statement about his past.
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