This is just me, but I'd buy a used mountain bike off of craigslist. Older ones with no suspension are usually cheap, sturdy, ride well on hilly roads and are easy to find. I see several up on the SF craigslist right now for under $200. Make sure to test ride it, go through all the gears and check that the brakes work well. Then with the money you save you can buy some fenders or lights, get a good tune-up, and still pay less!