the work orders, we had $4. million in work orders unpaid from last year because we had not received the documentation. we carried them over to this year, and to the extent we get the appropriate documentations, well moosm the dash make the payment. the bottom line is the off set of the $35 million offsets that . so this is the picture. $11.6 million negative variance on revenue. $9.6 expenditure average, which is about a $21 million problem. if you care it to when we

started, it is not the same magnitude we have been face negligence prior years. it is about 2.6% of our budget, and we believe it is minkable by taking the following actions. on the revenue side, we have to continue to make sure that we implement all the line items that the board approved in the budget and to oversee the deployment of citations to make sure it is maximized and most effective. john is working on that. taxi medallions continue to -- we continue to pursue the sale of medallions so we do reach the $10 million. most of the focus is going to be on the expenditure side and addressing the deficit through areas like salaries and benefits. all of our hiring and overtime is very closely watched and

limited to front line positions. we are going to be looking into every contract and only using contract needed for fiscal year. we are going to maximize space in some facilities. as this point we believe that we will be able to manage the $21 million deficit as long as we don't see any more appreciation -- pressures on the revenue side of the house. >> a couple of things. we talked about prop kmp as a one-time thing. i hope that is not an absolute one-time thing. before we had to do anything too dra conian to anyone, i hope that is a source we could go back to again. >> the money we got we really

borrowed from ours. that bucket we took the $7 million out of came from future years. >> we drove a very hard bargain with ourselves. >> we are very good at that. >> i appreciate the two-point something deficit compared to what we have been through. people are reading stories about the parking citations and all of that. somebody actually used the phrase are we declaring war on drivers, which is hardly the case. i think it would be helpful to have a review of the past several years of what transit users have paid and all the other things we have done so that nobody thinks that one segment of the population that we serve is being singled out to carry the whole burden. >> i think we have been equal opportunity on that. >> we can put that together. we have done that before. >> yes, we have. ideal update the chart. >> members of the board?

>> is there public comment on this? >> is there any? >> no speaker cards. >> public comment is closed then. go ahead. i had a few questions. thank you for that presentation. you did at the end use the word problem. it is not a problem with a capital p when you look at it in perspective, but it is still a problem to be sure. on year-end projections under the entry "rainy day reserve" there are entries of zero. i assume that means we won't add anything to the rainy day reserve. >> she is nodding yes. what is our kernt reserve level? >> it's about $12 million. >> for a little bit of flavor, that this isn't just a $21 million problem, i think we have a bigger budget issue.

the way we have avoided what we have avoided is tapping into something that support there. would you give historical perspective on the fact that not only are we looking at a $21.2 million deficit, but we have a significantly depleted reserve and where you think we should be aiming to go with that? >> in april of 2007, the m.t. board approved a policy that basically required us to fund 10% of our operating budget. if we would fall in the reserve policy, we would have about a $77 million reserve. we had achieved about an $80 million reserve in fiscal dwight. but between fiscal 2009 and fiscal 2010, we drew down on that reserve from $80 million to $12 million to help fund the

operating side of the house. so we are in violation of the reserve policy that the board has established by about $68 million. >> i suspect people up here now that. you could view this as a $21.2 million deficit or view it in terms of the policy we are violating, and we are close to $90 million in the hole. i have said before there is no guarantee that another recession like this or some other calamity isn't going to happen. i just think we need to be pushing toward larger reserves. sorry to take away from the sunshiney perspective, but that is important. secondly, and somewhat contradictally, is it still our plan for this year to abide by

our indexing policy and to have any increases done through indexing and not through one-time or larger increases? >> the board approved the indexing to all fares starting july of 2011. so the fast pass is going to go up from $60 to $62. that is already in the approved budget. >> but again your revenue numbers here don't anticipate anything other than the increases. >> that is for fiscal 12. for fiscal 11, there are no additional revenue enhancements. >> with the things of that nature, the index increases, we still did not get to the point where we had enough revenue to restore 100% of the service

reduction we imcomplemented in may. we were only able to fund at that juncture 50% of the 10% service cut. so we still have some work to do as it relates to 2012 because we have restored more than that. it is actually 61%. we have already contemplated the increase fare and fines. if there is a price to restoring that remaining 40% of service, do we want to pay the price? i realize that is not before us, but i appreciate that. >> on the decreased parking citation revenue, do you have any lone to blown that is because we have raise the price of parking tickets and people are paying more attention now? >> yes.

there are several reasons, and one is the citation amount is so high. we are seeing more meter revenue. we need to look at parking now as a whole because as we put the new meters on the street and allowing people to pay with credit card and things like that, a lot more people are paying. i expect to see citations go down and meter revenues go it, so overall, we should be looking at it together. that is our policy goal, have people pay the meter rearp having citations. >> that leads to the question, if we are anticipatings all this extra revenue, how are we anticipating that? >> we have done a great deal of forensic work in terms of what steve levy happening in

general. are we writing accurate citations? how many citations are thrown out? i believe we are bringing it to the peg and analysis in a week or so. >> yes. the other area that has been impacted is the street sweeping. that is about 50% of the deadline in our budget. plus the economy. it is a multiple set of factors. >> just two things. i think there's a perception out there, certainly fostered by some in the media that when we say we are going to make the system more fesht, that we are just going to issue more tickets. there will be benefits had to drivers in the process. at some point i just have to give up, but i have never over

the last year received an adequate answer on why the street sweeping service is the way it is. and we have eliminated something that costs the city as a whole money. that continues to frustrate me. with that, one final question. on expenditures, we have nothing budgeted in here for anticipated labor savings. this is, again, a budget that has been aimproved, and you are not revising any revenue? >> we had incorporated labor savings already based on the labor negotiations. it is already in the budget. >> let me rephrase the question. there are no anticipated revenues in here based on

saflingse from the t.w. contract? >> it would be impacting next year, not this year. >> and there are no anticipated savings for the following year? >> there are no anticipated savings or increases. >> very good. >> thank you, director. director? >> it will be very interesting putting together the information to see what has happened with transit fares and parking citation. the parking and traffic fees and fines is fascinating to me. i remember the fight when the transit fares were increasing, and the parking fees were increaseded. then the parking citations go down, and you see no, the people don't want you to write citations. which one is it? you can avoid the vie takes by

feeding the meter correctly. with the new other meets, it is edieier for people to geed them. when you drive away, somebody else has to buy a whole new chunk of time. i loved it. it was like ok, nobody gets to benefit from my left-over quarters, but now in this position, that is perfect and excellent. i just feel like we need information so the public can see. i remember the transit rider saying we were balancing a guerrier percentage of the budget on the backs of the transit riders rather than on the backs of the car riders. i don't know that this proves that, but it is interesting to see how it is working out. we need to look at parking as a system and figure out what is

going on. if people want to avoid citations, then they might have to accept the fact that we may have to expand meter operations and prices. they can't not pay a lot for parking and not get higher sigh days. wernlly, i would like to see the citation services go down than the hours you can park free decrease. that makes sense. that spot is there. that meter is there. i would rather have people pay to park at that spot than try and gain the system and end up with a ticket. the tickets are expensive. i can completely seeing -- paying. we need to continue to look at parking as an entire system. >> it continues to fascinate me the number of people that complain to me about parking

citations for people parking across the sidewalk, blocking the whole sidewalk, parking in red zones and this kind of thing. inevitably, if you don't want to pay the parking tickets, don't park illegally. i know these are some, tickly people who can't find the limited parking space, that they don't have to pay for it. i am at a point where we need -- i agree with you director. i would like to see the fines go down.

i have noticed people are being more careful. i have seen less and less cars sitting at the parking meters. where do we get the revenue with people now behaving themselves? we have reduced the revenue there. we have to find a way. i think the transit rider has been put upon more than the automobile driver, and i think we need to balance that out, but we do need to be fair to the people who need their cars to get from place to place. there are places that they need to use their car, and we

understand that. >> thank you, derek detect yr -- director. we look forward to a lot of time with you. >> we are hoping not to open up the 2012 budget. we are hoping to keep the bottom line of the budget the way it is. >> very good. thank you. >> chairman, no member of the public has indicated an interest in addressing you. so item 13, discussion and vote as to whether to invoke a closed motion. >> so moved. >> second. >> all in favor, aye. >> we will be back at five till . . >> i thought it was great.