I knew it before – but now I’ve lived it. This place, our people, make up the finest city in this nation. There are bigger cities. But there are simply no better cities.  Serving as your mayor is the greatest honor I could ever imagine.

In the past four years, I have looked at best practices throughout this nation. And I’ve learned – with both a growing pride and a profound sense of responsibility – that the nation is also looking back to us.

Here in San Francisco, our point of reference is often our minor political disagreements. But beyond our city limits, they don’t see the struggle, they only see the results. Most are inspired. Some are threatened. But without doubt, America knows that San Francisco is leading the way.

And in the next four years – we will not be afraid to lead on the most important issues facing our city, starting with the most important – health.

As the national effort to offer decent healthcare stagnates – and as our state takes the first steps in the right direction – here in San Francisco we have already extended this most fundamental right to 7,932 people through our Healthy San Francisco program. And this year we will offer this blessing of quality health access to roughly 40,000 more San Franciscans.

We know there will be bumps in the road ahead. We’ve already had to fight a lawsuit. But we will not stop until every San Franciscan has access to quality, affordable, comprehensive health care.

Universal healthcare has never happened in America – it will happen here – first. 

In the next four years, we will keep this city at the forefront of health policy with our proven, pioneering, and, yes, occasionally controversial programs to keep San Franciscans healthy.

We spend more than a billion dollars a year treating people who are sick. Yet the single greatest healthcare reform we can implement is to spend a lot more time and redirect just a little of this money keeping San Franciscans well. Prevention is the key.

That’s why we created Shape Up San Francisco, to promote exercise, healthy eating, and raise awareness in the fight against obesity by calling attention to calorically sweetened beverages.

Let me be clear – obesity and diabetes related problems will soon replace tobacco as the leading cause of preventable death in the United States. Which is why we are taking a hard look at promoting health by showing people the true cost and consequences of poor nutrition. We will save both lives and money by leading a movement of healthy living.  

At the end of the day – making San Francisco the healthiest city in America is our ultimate goal. And I can think of no more important mission for our city and this administration.

There is certainly no better way to demonstrate our commitment to a healthy city than by supporting the rebuild of the crown jewel of our public health care system – San Francisco General Hospital.

We have a long way to go. But on one of the most important issues facing our nation, San Francisco is leading the way.

Our national leadership does not stop with protecting the health of our residents. No city in America is doing more to safeguard the health of our environment. San Francisco is now a testing ground for how a people and a place can help reverse global warming.

The most important step we can take is to make this city carbon neutral. And that is exactly what we are going to do. Today I am pledging to make city government carbon neutral by the year 2020.

It is a daring challenge, but we will make it a reality by building on our pioneering initiatives – a carbon tax and a local carbon offset plan, a 100% biodiesel fleet, a landmark solar incentive program, a green collar jobs tax credit and innovative green building requirements.

And that is just the beginning. We are not just a beacon for the world – we are going to light this city with renewable power. We are aggressively advancing to expand local renewable energy generation – tidal, wave, solar, wind and geothermal.

And we are right now sitting at the center of what will be the city’s first Sustainable Resources District – a pioneering plan to remake the Civic Center into a laboratory for innovative environmental technologies, including a commitment that all city buildings will be powered entirely by green energy.

We are defending our planet’s environment, and we are acting to protect our own unique urban environment.

In the next four years, we will continue our efforts to restore those polluted corners of our urban environment, places like the Hunters Point shipyard. We took a giant step a few weeks ago when, with the help of Speaker Nancy Pelosi and Senator Dianne Feinstein, we brought home $82 million dollars to accelerate our clean-up efforts, just the latest and largest installment of the nearly half a billion dollars we have received in the last five years for environmental restoration of this neighborhood.

This year we will implement our Great Streets program to make sure that this city is a place where we can walk, bike and simply enjoy a streetscape that is the cleanest, greenest and safest in the world.

To help us achieve this goal we have successfully recruited a national leader on urban greening from Chicago – Astrid Haryarti. She will coordinate every single city department to make sure the greening of our urban landscape is not an afterthought but is central to all of our activities.

We are also adding over 700 acres of new parks and open space in San Francisco thanks to our new green communities on Treasure Island and Bayview Hunters Point. That’s the largest expansion of our parks system since we opened Golden Gate Park over 140 years ago.

And we must finish the job of rehabilitating our existing parks and playgrounds and bettering our urban environment by supporting the Neighborhood Parks bond on next month’s ballot.

We have a long way to go to secure our environment and make San Francisco cleaner and greener. But on the most timely issue facing our world today, San Francisco is leading the way.

If there is one place where San Francisco must continue to lead by example, it is in reforming our public schools.

As our state struggles to provide a quality public education to every child, no place is doing more than San Francisco to make this basic right a reality. We have forged a partnership – a Partnership for Achievement – between our city and our schools that is like no other. We are not just focusing on a few years of schooling, K-12, we are investing our time and energies into promoting and providing high quality pre-school education through college graduation. Fundamentally, we are creating a new culture of lifetime learning.

At the same time, we are reinforcing our commitment to creating a world-class science and technology school on the east side of San Francisco, in the spirit of our finest schools, Lowell High School.

Because improving our public schools will take the talent and energy of this entire city, I believe we should harness the knowledge and experience of the coming influx of baby boom retirees, to mentor San Francisco’s next generation. That’s why I will expand successful programs, such as Experience Corps, to encourage retired San Franciscans to mentor and tutor our public school students.

Our city commitment to a lifetime of learning is best exemplified by San Francisco Promise, a new initiative that will guarantee a place at San Francisco State University to every qualified high school student.

We are giving our public schools the resources they need to succeed. But we are not just giving. We should also ask our students to give back in return. Today I am calling on our School Board to join with me in crafting a community service requirement in all of our public high schools so that public service is a common expectation, a right of civic passage for all of graduating students.

We all know that making our schools better means keeping great teachers in their classrooms. And with your help this June, we will make a renewed commitment to attracting and retaining the very best teachers by paying them a salary that can sustain their own families as they educate ours.

We’ve seen our nation and state offer the most damaging political posture when it comes to our public schools. No Child Left Behind has left schools under-funded and over-regulated. This dangerous experiment of high stakes testing has created better test takers, not better prepared students.

But here in San Francisco we aren’t attacking our schools, we are changing them with a partnership that is going to help train and retain the best teachers, a partnership that helps send children to pre-school with the nation’s most comprehensive early education programs, and with a partnership that helps send our kids on to college with the resources and training they need to succeed.

While we have one of the best urban school districts in the state and nation, it is certainly true that we have a long, long way to go. But on a challenge that has confounded so many other American cities, San Francisco, working with a fresh new leadership team, and is leading the way, in our own unique way.

As our new administration begins, we are redoubling our commitment to addressing one of San Francisco’s most vexing challenges and one of my highest priorities – the challenge of homelessness and panhandling. 
 
Our combined efforts under Housing First, Care Not Cash and Homeward Bound have already moved 6,860 homeless individuals off of the streets, producing a remarkable 38.9% decline in the homeless street population. Our 10-year plan to end chronic homelessness is a national model. And Project Homeless Connect is harnessing the spirit of civic engagement in the struggle to end homelessness across the nation. There is no better demonstration of this than yesterday’s 20th Project Homeless Connect which brought thousands of San Franciscans together in the fight against homelessness.
 
It is a good start. But it is just a start.
 
Our next steps in this effort will be to provide alternatives to panhandling and homelessness by expanding our sobering centers and medical access, identifying chronic inebriants and intervening earlier to help them find assistance. And by targeting our homeless outreach teams to prioritize chronic users of our system of care.
 
This year we are taking another important step by working with local merchants to end the sale of fortified alcoholic drinks that fuel so much destruction. We are working with merchants to create an Alcohol Impact District that will limit and prohibit dangerous alcohol sales.

We are also making sure that our parks and public spaces are available for all of us to use safely. This year we started the process of protecting our public spaces for all of our children and families, and we are not going to stop until every corner of every park and square is safe and attractive for every San Franciscan. And we will do it in the right way, a compassionate way.

We will accelerate the struggle against homelessness by redesigning our city shelter system so that they are no longer just refuges of last resort, but spaces where homeless San Franciscans can find the job training, drug treatment, and encouragement they need to exit homelessness.

We’re getting out of the shelter business. And we are focusing on the business of ending addictions and changing lives. Shelters only solve sleep. Housing and support services solve homelessness.  And that is why a key part of our homelessness strategy has been and will continue to be our Housing First program. On what is and will continue to be one of the great challenges facing urban America, San Francisco is leading the way.

Right now we are creating more affordable housing than at any time in the city’s history. We are not just meeting our goals; we are aiming to exceed them. We are on track to reach our ambitious goal of creating over 15,000 units of new housing in this city in five years. This will include over 5,000 units of affordable housing for lower income families.

We aren’t just talking about this problem, we are doing something about it. And in the next four years we are going to keep offering real solutions on affordable housing, not fall prey to political gambits that offer attractive promises but not sound policy.

As we address this challenge of housing, I believe we must recommit ourselves to the notion that every San Franciscan deserves a decent place to live. Which is why it is a shame in our city, thousands of San Franciscans are living in substandard public housing.

That’s why we must finish the job of making sure every single remaining public housing unit is rebuilt to excellent standards, so that residents can be as proud of their homes as they are of their city.

Our HOPE SF program has taken up this challenge. And this year HOPE SF will start the task of rebuilding 2,500 of our most distressed and antiquated public housing units – without losing one unit – and without forcing one tenant out of the system.

We are spending more on our local HOPE SF program to rebuild public housing than the entire federal government is spending in all 50 states. That’s right. We’re doing more right here than the federal government is doing everywhere else in America. That’s how strong our commitment is to this program.

We’ve waited almost 50 years to fulfill the promise of safe and decent public housing. We will wait no longer.

And the plans for the Bayview Hunters Point that I highlighted before in particular are going to revitalize that neighborhood, first and foremost for its residents. We can all help this June by supporting the plan to bring 10,000 new units of housing, over 5,000 new jobs, 400 acres of parks, open space and recreation facilities, and millions of square feet of science and technology space.

If that plan also keeps the 49ers in San Francisco, all the better. But first and foremost this plan is going to bring prosperity to families who have waited too long for it.

Ultimately, the real test of leadership is how we confront our failures. Today, tomorrow, and through the life of this administration, we will continue to confront the plague of violence and homicides on our streets.

It is not enough that we have lowered our overall crime rate – we have. We will not rest until we also lower our homicide rate. Led by our communities most affected by violence, our city’s most comprehensive community policing and violence prevention planning efforts have just been completed. Each of these plans outlines specific steps and recommendations to more effectively work with our community partners and law enforcement to better prevent and combat violence.

With considerable input from national experts, we are also undertaking a major review and assessment of the San Francisco Police Department. We are reviewing district boundaries for the first time in a decade. We are studying and implementing national law enforcement best practices. And we are implementing fair and impartial policing strategies that put more officers on the beats throughout our city’s diverse neighborhoods.

After decades of staffing challenges, we will hire 250 new police officers for the third consecutive year. And we will dispatch these officers directly into those neighborhoods most affected by violence.

I am also pleased to announce a position has been created specifically to protect the safety of residents at the San Francisco Public Housing Authority. This new Police Commander will answer directly for the safety of residents at all of our public housing sites.  

We won’t rest until our Police Department is a model for the nation. We are going to continue to make San Francisco safer, by making sure that we are not just mending broken windows but by healing broken lives and by making full use of our Community Justice Center, a program that will make sure that offenders are held accountable for their behavior and, most importantly, offered a path forward to change their lives.

This Court just last week heard its first cases, and it will open in its permanent home just down the street this spring.

We know that keeping San Francisco safe means more than fighting crime. That’s why it was such a milestone last week when the Bay Area launched California’s very first regional emergency coordination plan in our state and nation’s history. Mayor Ron Dellums, who is here with us today, helped us craft this plan that will see the Bay Area act in common cause when our region is threatened.

Here in San Francisco we may be a peninsula, but we are not an island. And when it comes to public safety we have stopped acting like one. Our struggle to make San Francisco safer isn’t over. It will never be over. But our commitment to this task will never waver.

Yet another test of our leadership in the four years ahead will be how we continue to demonstrate that this magnificent building and the government it houses does not belong to the people who work here. It belongs to the people we serve.

We need to always remember that the needs of the public come first. For too long in this city we have allowed a government culture that puts the interests of politicians before the needs of the public. We still let people wait in line and languish on hold. We still let too many problems fester when solving these problems conflict with various political agendas.

That’s why we can’t slow the pace of reform; we must accelerate it. We need to make sure that people who work here work for all San Franciscans. That’s why I so strongly support new campaign finance laws that will prevent those who seek an action from this government from giving a single dollar to politicians and political campaigns while they seek that action.

To make government more responsive, we also need to retool our government structure, so we have fewer departments that can do more. That’s why I have restructured my own administration, so we can put the lessons of the last four years to work for you.

This government belongs to all of us, and it needs to be responsive to all of us. That means we listen not only to the people who show up in this building, we listen to everyone.

We took a giant step forward this year when we launched our 311 call center, finally giving residents one number they can call to interact with their government. We’ve already answered over 1.6 million calls. And this year, we will expand 311 so that you can access it with a text message and online.

But 311 is more than a way to find out about a bus route, or how to fill a pothole. It is your way to tell us what you think so we can take action. When it comes to reforming this government, my administration will never be afraid to lead the way.

And 311 is just one of the ways we are showing leadership in bringing new technology to make government work for you. This city is the epicenter of high tech innovation. If we can have Web 2.0, we can have Government 2.0.

That’s why we are in the process of redesigning the City’s website, some elements of which are launching today at www.sfgov.org. You can use this website to give us your pet peeves and suggest new policies. You will be able to access this website in multiple languages. And this site will be a source of real-time news from San Francisco city government. 

Technology is changing our world. And in the next four years it is going to keep changing our government for the better. In that spirit, this year we will renew our efforts to close the digital divide – by advancing our city-wide free WiFi network. We are not going to stop until this task is accomplished.

This renewed effort means cultivating free wireless networks that are growing in pockets of the City ¬and linking these networks to a growing city WiFi infrastructure. We’re not going to get there as originally planned. But we will close the digital divide with a city-wide, free wireless network.

But it takes more than technology to address one of the key issues facing our city in the next four years and beyond. It is going to require taking a very tough look at how we are planning for our future growth.

We are already transforming the built landscape of San Francisco. Nowhere is this change more evident than in our Eastern Neighborhoods, where new housing, an expanded downtown, new industries and a new Grand Central Station for San Francisco, the Transbay Terminal, will become the landmarks of our future.

It is here in these Eastern Neighborhoods – from Rincon Hill to Hunters Point – that we have our greatest opportunity to address the challenge of keeping working families in San Francisco. The growth here will allow us to maintain our status as the center for bio-tech, life sciences, digital media and green tech industries.

And the investment generated from this growth, when properly applied, will allow us to build the transportation, parks, open space and schools that will make San Francisco more livable – developing better neighborhoods not just new housing.

I am determined that we manage this growth – so we can all benefit from it. And that’s not going to happen until we finish the job of taking politics out of the planning process. We’ve made progress. We’ve reformed that old bastion of the special interests, the Department of Building Inspection, so now it works for all of us. We are going to continue this process by completely reforming our permitting system as well, so instead of having to go to nine places to pull a permit, you can go do it in one simple step.

However we can’t let our planning process be a political swap meet driven by those same special interests.  If we want our growth to make us better, we need a better way to plan that growth.

I want to repeat the message once again: we will build in this city to make this city better, not to make someone or some interest group richer or more politically powerful.

As we lead the process of change, one of the most significant tasks ahead of us is to make sure that Muni finally works the way it should, every single day and in every single part of the city. We are making progress, but it is painfully slow.

The elements are in place, and our on-time performance is getting better and better. The tough part of the journey is right in front of us. Our Transit Effectiveness Project is nearly complete, and it is going to help us make great strides.

But that’s going to require redesigning routes, eliminating some stops, fully implementing new technology like our forward-facing cameras, and investing in a dedicated rapid transit system throughout the city.

The Transit Effectiveness Project also underscores the need to link our city to the region and our state with high-speed rail to our new downtown Transbay Terminal, with a fast and frequent electrified CalTrain system, and with a rail expansion to Chinatown.

And I also believe it is time to employ innovative variable pricing strategies to better manage traffic and to help draw residents out of their cars. I also believe our own ongoing study will show what national and international experts agree upon – a sensible congestion pricing plan is the single greatest step we can take to protect our environment and improve our quality of life. We must design this congestion pricing plan so that it works for San Francisco and is not overly burdensome to working San Franciscans.

This is our future. We can hide from it or we can lead the process to shape it. I look forward to working with all of you to shape it, so that congestion pricing is affordable for working, middle class families who need to drive because of work or school schedules. Not a punishment, but a way to hasten the ultimate reward of a great public transportation system that improves the environment by making public transportation our first choice.

There’s no doubt that this job of improving transportation and reforming Muni is far from done. But this work will never stop. Because ultimately, if Muni works the way it can, all of San Francisco is going to work the way it should.

If there is one thing I have learned about leading San Francisco, it is that we don’t need to be profligate to be progressive. In fact, if we want to prove the wisdom of our values, we need to marry these values to the toughest fiscal discipline.

That’s why in these uncertain times, I have asked all departments for eight percent targeted cuts and a hiring freeze outside of essential services. We need to understand that as strong as our local economy is, we will be affected by a state and national downturn. We must also recognize that we will be asked to shoulder a significant share of the burden of the state’s $14 billion dollar budget deficit.

There is no doubt we must make tough choices. Choices that address both today’s difficult budget climate and preserve our fiscal health well into the future.

Let me be clear right now – real leadership means making those tough choices to protect the fiscal health of our city today. That is why I am working with Supervisor Sean Elsbernd to reform our retirement system – not so we can take away anyone’s retirement but so we can preserve and afford it through long-term fiscal discipline.

The world rightly views San Francisco as an economic leader. But we are still not doing enough to bring the benefits of our prosperity to every San Francisco neighborhood. I believe our economic success will be hollow as long as poverty is tolerated. We simply must accelerate our efforts to give every San Franciscan the tools to lift themselves into stable, high-wage jobs.

I know we can start by promoting the most vibrant part of our economy – our small businesses. That’s why I want to see the job-inhibiting payroll tax reformed so that the payroll tax exemption is raised for the first time in 25 years. That’s going to give small business the incentives they need to hire more San Franciscans.

We are going to need to pay for it, but we can pay for it by closing the so called “Partnership” loophole that has allowed big businesses to escape paying taxes while small businesses have paid more than their fair share.

We can and we must offer new incentives for work, including tax breaks for small businesses that hire our returning veterans. We are not going to let another generation of San Franciscans who served in our military to become at risk for addiction, despair and homelessness. We are going to value their service by rewarding it here at home.

We also must stand up and fight one of the key reasons so many San Franciscans continue to be trapped in poverty - a criminal justice system that does not do enough to rehabilitate those who make mistakes. It virtually destroys their chance for employment.

We all know the best weapon in the fight against poverty is a job. And we are going to work to make sure more people are qualified for decent jobs by expanding job training programs for non-violent offenders, particularly those that are casualties of the War on Drugs, so they can earn a second chance.

To expand job opportunity we will redouble our efforts to make sure more San Franciscans are ready for the jobs of the future. We are staring right now by expanding our City Build program so that it will teach the “green collar” job skills demanded by the emerging green tech revolution. We must make sure neighborhoods that were locked out of the pollution-based economy are locked in to the new green economy.

We will address social inequality and environmental injustice with a shared solution - a green economy that offers a ladder out of poverty so our youth can climb into dignified jobs that clean our planet as they create new economic opportunities.

Ultimately the economic prosperity that all of us rely on will rest with our ability to maintain our leadership in the global marketplace. We are uniquely positioned here in San Francisco not just to compete, but to triumph in this contest.

But we can’t be complacent. That’s why I am creating a China Desk in my administration to coordinate all of our economic outreach to the nation that will very soon become America’s most important trade partner.

We are a gateway to Asia and the Pacific, and a center of world commerce, because people from all over the world know that our values teach us to welcome our neighbors not to be wary of them.

If there is one area where we need to be more welcoming, it is in keeping children and families in our city. And it is here where we must offer bold leadership in the years ahead. 

We have the dubious distinction of having the lowest percentage of children of any major city in this nation. There are many reasons for this, and that is why I have so worked so hard to address this problem on many levels.

And perhaps no other initiative will better symbolize our commitment to children, youth and families in San Francisco than the creation of a new and innovative Baby Savings Bond, a program that will deposit on birth $500 dollars for every new resident born in our city and offer the proceeds of this fund to every graduating high school senior who participates in public service.

This money can be used for college and training, and first time homeownership, giving every young person an equal stake in upward mobility. This investment helps spur a culture of savings, teaches financial literacy and is supported by our Bank on San Francisco initiative. Because we included the requirement to participate in community service to access these funds, we will help unlock the tremendous talent and energy of every young San Franciscan.

This may be just one step but it is an important one because we are going to demonstrate to families that we will invest in their children if they resolve to stay the course in San Francisco.

As we address this challenge and so many others, we are supported by a set of values that distinguish us as San Franciscans. As our world is confronted with the consequences of division and injustice and racism, here in our city we are showing the world that diversity is not something to fear, but to embrace.

We know we are far from perfect. We know racism in all its forms still exists in this city. But we also know that the single most important reason why San Francisco is a world-class city is that we can benefit from the collective strengths and experiences of people from all over the world.

Why did one of the leading international manufacturers of solar panels, SunTech, choose to make San Francisco its new North American headquarters? Why did the Center for Regenerative Medicine open in San Francisco? Why did Wikipedia, the company that seeks to gather the world’s knowledge on the World Wide Web and make it freely available to all, relocate to San Francisco? Why does Second Life, where this inaugural is being broadcast, in the emerging virtual world make San Francisco its home?

Why are we the only North American city chosen to be part of the Olympic torch relay to Beijing?

We know why. Because San Francisco has made itself a world center by making people from all over the world feel at home. There are some in our own country who are frightened by this. They deride what they call “San Francisco values.” But we know that these values inspire many more than they frighten.

We saw how San Francisco can be a beacon for the world when we led the fight for marriage equality. The world didn’t become worse when over four thousand lesbian and gay couples were allowed to express their love and responsibility for each other right here in this building. It became better.

The world didn’t become worse when we extended the protection of our laws to transgendered San Franciscans. It became better.

The world didn’t become worse when we stood up and made San Francisco a Sanctuary City to protect all of our residents, regardless of their immigration status. It became better.

We are such a small place. But we can do so much. And we have done so much already.

On the most important issues of the day, San Francisco is providing leadership for our nation and the world. I know that’s why we are so proud of our city. It is more than the beauty of our hills and the bounty we enjoy. It is more than the diversity of our people and our neighborhoods. It is what our diverse population has done that distinguishes us as San Franciscans.

When others were fearful, San Franciscans did not falter. Yes, there is so much more that we must do to live up to the promise of our city. The challenges ahead are certainly great. But I know that we will not fail. We will not stop making this city an inspiration and an example for others.

I have taken the oath of office today with an appreciation born of experience. I don’t just expect that this is the best job any San Franciscan could ever have, I know it. And you have given me the most extraordinary opportunity not just once but now twice.

I thank you today. And I hope you understand that I will thank you every day for this opportunity to serve. Every time we take a step forward on issues like health, the environment, education, homelessness, housing, and civil rights, I thank you for the responsibility you have given me.

I cherish this opportunity to lead. And I will work with all of you to make every single one of these most precious days count.