and there is plating on seven days per week, and from 4:00 until 6:00 every day per week, it is tough enough already. coming to the office and do we do that per -- do we do that on everyone? >> i understand you're looking for any stream of revenue possible. there was no meter when i first moved to the neighborhood.

i read with some amusement that some of the people had patched talking about the horrors of having to feed the meter. so, we have gotten used to that. the contractor permit, i assure you that we are not using it as a free parking pass. the idea that we are respite -- restricted and i know that this is probably not a popular idea, but the last that i knew, the residential parking permit was less than $100 per year. and they feel like this is just

another one of those and laughing -- one of those kinds of things, small businesses are told that san franciscans constantly look at this. i hope things will take a moment to make it more tenable and it is the head of e.f. and i do not know how diligently the meter enforcement would be. we would have to make sure we were actively carrying someone. thank you. >> that is the last person who has turned in a cart on this one. >>[tone] >> ok. what response would you give? >> that the issue of parity, it

is only the contractors will are on the onus. we have parsed out one group of small businesses to contractors to get this permit. it gave six months of free parking. they are getting the advantage of what small businesses get, above and beyond. this department would not exist if we give them all resources. >> considering this recommendation, were different parts of the city considered? >> we spoke to the small business commission and they were across between the small business commission. part of their community is not getting the permits, tying up space in front of their business frontage, where the other contractors with it the advantage are concerned about

the change. they understood why we were moving forward with this. >> seems like different places in the city, while the situation in the tenderloin is a very dense population. >> i guess it is difficult across the city for enforcement, for different kinds of administrative, as well as having to identify which business is aware. looking at that, i am not sure what it would be. mostly constructive? from our perspective. >> i am sure that that is playing out. do not think that we were constrained by state law about the recovery program. we cannot use it as a financial mechanism. it leads me to a question of not

only what we can do, but what our friends at organic mechanics have. we are caught up so, the logical thing here would be looking at the other businesses and find the solution there. we can come back to revisit it. >> the requiring of the survey in the community with those signatures, there is a certain segment of the block that becomes a petition in the mta? that is historically something that they could do. we are revisiting our policies to take initiative on. >> we are taking away a and we

have certainly heard from them i do not want you to think they knew have not been heard, and it seems to me that if your neighbors feel the same way, it would be to organize -- this expansive -- expansion does that have to be massive. it could be by one mark. if the neighbors in the area what the program, i suggest you might save money. >> of the only question -- the only caution is we are evaluating whether commercial district should have them. the petition may come to our doorstep, but it may not signify anything. >> i just do not want our friends to walk away thinking that there is no resources -- recourse.

at least looking into whether you could have a zone. >> i think staff will be able to meet with the gentleman. >> one more question that is a clarifying question. their language prohibits the use of contract and parking 1,500 feet. does that mean -- does that mean prohibit free parking? >> correct. they can always pay. >> i imagine that some of it is in the areas where we are trying to manage the demand? >> members of the department? >> what is the scope of the problem? this is just sitting there without being dark -- productive. >> correct. they are sitting at the spot all day. they were where they work and come back to their offices.

it is around these offices where the vehicles to take up the spaces. >> is this in an isolated section of town? >> there are complaints across the city. >> across the city. >> thank you. >> would you like to come forward? >> we cannot go back on the rules. >> chairman, the board. i am a member of the contractors association. we represent about 100 contractors in the city. when the first letters came out, we were taken aback. but we were given the chance to meet with the port.

our cards were on the table and we understood where they were coming from we felt we could pay the meters in front of the property. we felt it was a working thing that we could get together. we recommended the past. >> is there a motion? >> i would move this. but i would caution and be careful about excluding commercial districts and businesses. as we look to the future we need to respect the rights of business owners to have access to those parking spots as well. >> that is a motion. is there a second? >> aye. >> so ordered, thank you. >> moving back to the presentation discussion regarding >> go ahea--

>> item number 11, presentation and discussion regarding the status of the fiscal year 13 in fiscal year 14 operating budget. >> i have a short presentation for you. when i got the final budget to you in april, i told you that amongst the fingers -- >> ok. [laughter] >> one of the labor negotiations that was under way, to back up for context, when we first brought this to you in november at the workshop, what we had in there was a baseline assumption. you may recall that that included 35 million in the first year.

and $89 million budget gap is where we felt the process back in november. a good chunk of that, maybe half of that is based on anticipated labor increases. we moved forward on some standard cost-of-living basis, have we done that it would have been something around $40 million in increases in labor costs. fast forward to april, as we finalize the budget. recall our budget is due on may 1, in advance of the labor negotiations conclusion. we started our negotiation strategy with the city and the department of human resources. we worked side by side, we literally negotiated and started at the same place. i would say it was a good process and a good outcome.

where we ended up, and i will cover this more specifically on the next page, we anticipated $14.6 million over the next two years of savings. that was basically based on our opening positions, which were not there at the time we concluded the budget. on the slide, it adds up to less than $3 million. that is $3 million over two years. that is the increase over the current budget. about $1 billion. what we negotiated with our unions, they have been making concessions for the last few years, amounting to a less than 1.5% increase in the labor

budget, which is reasonable. i just wanted to dismiss any notion that city hall did something that created a problem in the budget. we worked side by side. the negotiations generally went well and were received well by mr. johnson, mr. allison, and their staff, side by side with the department of human resources. only one of them went to arbitration over a somewhat minor, non-monetary items. i think at this level of compensation, more or less all of this city employees got the same deal, which is reasonable. but nevertheless it did put the budgets -- the budget out of balance. i am here to report to you on how we are proposing to balance the budget again.

moving on to the next slide, there have been changes in our favor. they did not all go in the other direction. there have been changes from city hall, changes we have initiated with departments. a few of them went the other way, about 1.5 million to our benefit. that is a little bit of good news. moving on to expenditure changes, one of the things that we found, you will recall, a theme of this budget was investing in the maintenance of the transportation department. particularly muni. what we have budgeted for, or intended to, was that these physicians would start in january of the first fiscal year and be the equivalent of half of the full-time equivalent

of employees in the first fiscal year. we inadvertently budgeted them as full-time positions, though as much as we would like to there is no way we can get them hired in the next few weeks. correcting for that was about $6 million. however, we took this opportunity to evaluate some of our parking enforcement. we have had a management change in that area. we have had a controllers audit going on. from that, we have determined that we could more completely managed the current parking and traffic rules on the books, but we would need more staffing to do that. we are proposing adding traffic enforcement staff. likewise, we have had an increase of any instances of

legal taxis and limos, increasing our staff in the proposed budget with a slightly greater increase. tep, this had been budgeted incorrectly in the other direction. somehow, they were left out due to an error. we are taking this opportunity to address that. finally, we are transferring one function in from the police department that has to do with posting of no parking signs, which for current circumstances is done by people billing to the station in the officers to go out to post the signs, which is not a good use of their time. the revenue is offset for that. there were a number of other miscellaneous and technical changes that brought that out to more than $2 million.

it more or less offset the gains in our previous life. moving on to the next slide, about $18 million in issues. here is how we are addressing it. first of all, the scientists at the bottom, the cost recovery, we can get that with revenues and expenditures. what is new here, the good news from the city economy is that it continues to roll in hand the current figures that we have from city hall in terms of our baseline transfer will yield us another $16 million. this is in addition to be good news that i was reporting each month, leading up to the budget approval. the economic outlook continues to improve. the condition of parking enforcement traffic, as well as

existing staffing and the efficiency of existing staffing, we are moving more onto bicycles and there is much higher productivity. much lower cost. all of those things together, yielding more than 6 million in revenues over two years. in terms of tax revenues, of they did not make significant changes in revenue assumptions based on policy changes yet to be decided. we did look at the actuals from this year, as well as the enforcement resources that we would be adding without looking forward to whenever reform comes, adjusting our revenue estimates. so, that is how we rebalanced.

moving forward from here, we will transmit these changes to city hall. it is possible that the budget finance committee will want to bring us back for a -- for a second hearing. in the big scheme of things, $18 million is not substantive. we may not have a second hearing. we will be updating members of the board of supervisors on the changes. the new fiscal year starts july 1. supervisors have until august 1 to except to not act, at which point they willfully reject or accept the budget. i do not completely anticipate that happening. having spoken to the director on the reporting to the governance committee, we will try to do is bring much more comprehensive reporting on the budget, so the

board has good visibility into what we're doing on the expenditure side. i guess the only other footnote i would add, ms. martin mentioned during public comment that the board has recommended $4 million in support of $5 million. i recommend that we and shorten the time line, with the balance of funding that we have, we could do a 19 month by the -- pilot, giving us the benefit we're looking for in terms of the policy. i should note that the staff, in

making a recommendation for $4 million, they conditioned the recommendation on the city coming up with an additional million dollars. to keep the full five for the full 22 months, i spoke at the committee last week. they were not supportive of advancing the staff recommendation at this time. they requested that they removed that condition. we should acknowledge that it was very generous of them to consider sending that our way for this pilot. that $1 million condition is problematic, from our perspective, that is my understanding. my understanding was that it would have no further impact on our budget. unless there is someone outside the transportation world, it is not clear to me how we would be able to do that, but the bill continued to work with mtc staff

and commissioners to the extent necessary, as well as folks at city hall, to figure out how to make a program out of this. >> at one point we had a schedule with a couple of special meetings. when would they be? >> we have one special committee going at the end of june. >> and that is gone? >> the reaction would be whether or not that what happened, but if it did, it would be in july. recall if they are to reject the budget, they have to provide additional funds to operate in the interim, which creates a high hurdle for them. theoretically, we would have an opportunity at the next meeting. >> so, we do not need to

tentatively scheduled anything at this point? >> we will check. >> thank you very much. the ballot measures that are out this fall, how might that affect us directly or indirectly? >> i do not think that there is anything at the state level that is problematic in the preliminary budget. since they have fixed the transportation funding, it has been off the table in terms of discussion. they have left of the transportation funding alone. the subsidy that we got from the state transit assistance, at least at this point it is stable. budget wise, i do not think we have any issues for concern.

i do not know if there is anything else on the ballot. >> operations on the capital side, that is the only other issue that might affect this. >> they will be considering that at the june meeting with legislature, which will be wrapped up in the deception over high-speed rail. if the state is going to move forward and appropriate the $3 billion in funds, i am fairly confident that this will be a part of that. if the state chooses not to do that and they send the funds back to washington, d.c., it is possible we will need to fill more. >> what about the end of june?

>> that is correct. if they do not act by the end of july, that money will go back to washington, d.c.. >> thank you. anything else on the budget? >> just to revisit the subject of work orders and those changes, the ones here seem to be marginal changes. you know, like maybe we can get a slightly better price for this, that, and the other thing, but there is no real restructuring of work orders. the police and the traffic detail, part of that discussion was -- if it will not come from the mta, where will it come from? it is providing a vital service.

do you have any sense as to whether there will be those kinds of discussions when you go to the board of supervisors committee? or do you get the sense that they are content with the status? >> i do not want to speak for the board of supervisors. there are definitely a few members who are concerned about the issue. it came up in may. i think that they appreciated the direction that i got from you to articulate how we would spend those funds, which i did in my transmittal letter, when i sent the budget over at the end of april. one avenue, at this point, through the board of supervisors process, they could add funds back to the board department,

reducing the need for our work order. whether or not there was another mechanism is really under serious consideration. >> i would remain open to discussing this more structurally, but it has to include, if the service is one that is vital in this case, we would need to have a broader discussion about where the money would come from. i am anticipating that we would get pressure about work orders. i do not want you to be flatfooted. this is a discussion i am open to, but it is a discussion that needs to happen within and outside the mta. >> agreed. >> members of the board? >> one member of the public has an interest. mr. toronto?

>> there are some topics that triggered my interest in this. i can understand budget discussions better than the average member of the public. i would like to thank the director for bringing up this issue. we used to get these reports from the representatives at the police department in the mta about taxi enforcement and their role at the traffic company. now we are not getting these reports. the director has not asked for them or presented them. we have to know if they are getting their money's worth. that is a valid question. some of that work that the traffic company does, that is a

related issue ended is a good question to ask. people have brought up the topic of the taxi industry becoming a cash cow. is it explained better, where will this money come from in the taxi industry? i think it would be important to let the stakeholders know about this, considering that there are several town hall meetings scheduled for next week. so, i want to let you know that you have an obligation to let the taxi industry know about their ability to participate. you saw them bring all of these rules and i think that, related to the budget, if they are going to continue to use the taxi industry as an "cash