we more or less laid out our intent to our need to adjust our schedules so that we could restore service to those in the city and county that utilized muni. there was a broad brush understanding of our needs. but as we forge ahead and look at the schedules going forward, i can sense there will be a difference of opinion about the way we want to do service. i have a strong belief we started out on a good, solid feeling. >> obviously you can paper out efficiencies. but if the troops in the field don't agree with it, i think obviously you have to be aware of what the union is telling us about what they think will and won't work. if we need to adjust accordingly, we will consider that. >> i think we as management are

totally open to that, however we do want to make sure that any adjustments are cost neutral in terms of making changes. this schedule allows us to restore 61% of a 10% service cut. we are seeing the overcrowding conditions out there on the system. it is very important that we all come together. >> i am all for as many efficiencies as you can implement. the key being implementing them. i would note to close my comments, this is not just an efficiency, it is not a restoration born out of efficiencies, it is because we got money from outside agencies and we are thankful for that as well. >> the taxi advisory committee meeting has been rescheduled and we will announce the schedule and time at a future

date. >> public comment on the executive director's report. nobody turned in a speaker card. >> good afternoon i should say board members. i am a yellow cabdriver, 21 years, nailtive san franciscoian. i am here to help and not hurt when it comes to saving money. excuse me for one second. i have done a survey. i do a survey every year. i do 1,000 customers every

year. i have done it for 13 years. yet it seems to get discarded. they did approximately 662 people responded to their survey. i believe it was recommended by the federal agency. it says here it was a dirty trick. by staff. how could that happen? you know this will save you money, the survey that i produced. all you have to do is analyze it. it has an over 90% return rate. i don't think their survey is any better than mine. in case you didn't know, you have a mandate. taxis have a mandate for on time service. i believe that is your obligation, unless you changed the rules.

i am not a team player. i'm sorry. i am not for m.t.a. i am for my customers and fellow cabdrivers. also for the general public. now, without any taxi advisory commission or committee you have not had one yet. how can you possibly be making rules without a committee of advisory. >> as mentioned earlier we are now going to item 11. >> just for those that are here for public comment and items on the consent calendar, we will be back after the special order. please sit tight. item 11 on the regular calendar adopting amendments to provision two of the san francisco transportation code to specify obligations and medallion purchasers and

lenders that have financed in the event that the board that decides that some or all under the pilot program are no longer transferable clarifying for procedures regarding a lenders perfection of a security interest and for closure of a medallion loan and provided continue operation of suspended medallions during the period of suspension. mr. chairman, you do have members of the public who indicated their interest in this matter. >> unless the board needs a presentation this item has been before you and was rescheduled to this meeting. >> public comment mr. chairman. two minutes. we only have two people who turned in speaker cards. >> good afternoon.

i note that these amendments potentially put the agency on the hook for $25 million to $50 million in the form of repurchase of sold medallions in case the agency decides to terminate the program. i assume that the same would apply if the court rules that the program was illegal. these provisions are obviously there to protect purchasers of medallions. but i think that they also are there to protect the lenders who are guaranteed to get their money back, and probably there would be no program without these provisions because i doubt the lenders would go forward without it. that being said, this agency is

basically now in the business of protecting medallion values. high levels of medallion lease fees, so purchasers can pay their debts. high level of gates to sustain the lease fees. possibly means higher taxi fares, unless you are going to put it on the driver's back. then there is the severe downside of the agency's liability, $up to 50 million with no reserve. with a lawsuit pending. i think it would be prudent upon you to hold off on selling any medallions until that lawsuit is finally concluded. thank you.

>> executive director and fellow board members, one general comment. i think this program has been worked on for a long, long time. a lot of hours put in by your staff, by people in the m.t.a. and all facets of the cab community. and i think we are at a great point to address the concerns of the previous speaker as far as m.t.a. being on the hook. i am assuming you had time to read the information from the lenders and so forth. i don't know how familiar you are with the cab business, but some people are offering to pay cash for these medallions. those that are financing them, their monthly payments that you speak of, are within the realms

of what the companies have paid medallion holders for the use of the medallions. in this regard you basically have a failsafe situation where if someone were to default and couldn't make the payments, rather than going back to the city, the companies are willing to run the medallions until they find another purchaser and basically cover the payments to the credit union that they would need to secure their loan. certainly this is something that's been researched for a while. i am excited to be where we are. i think it will benefit the community. the drivers have an opportunity now to have a stake in this business. i would ask you to support this before you.

>> gosh. after months and months of town hall meetings, careful discussion of all of the items, bringing in partners from the lenders and so forth and making sure that we have everything tied, we are told now what if there is a lawsuit against you that is successful. as you all know now the taxicab business is extremely lito my knowledgius. and if you waited for to make sure that nobody would sue you you would not be making moves about anything. we would be back with mechanical meters. i urge you to go forward from this. yes, they are trying to hold this over your head as a threat to keep you from going ahead.

i think at this point we know that this is going to be a successful program. it will be monitored very carefully all the way through. i urge you to continue your supported. >> good afternoon. i am speaking on behalf of the san francisco taxi coalition. let me say we are fully supportive of this going forward. it is long overdue. without rehashing the long history of the taxi's need for this type of reform, we have narrowed down a situation where the city can raise revenue on these medallions. those that are older and disabled can have a way to exit the industry. now we are creating far better opportunities to get taxi medallions where is before there were none. also one thing that comes up

over and over again, these medallions are extremely valuable. once you get them, if you are lucky to survive until age 70 or whatever, you are getting $2,000 to $3,000 a month just for having it. in this case here, although you would be purchasing it, the revenue you are getting for medallions more than pays for its loan. what this item does is very important. puts another level of safety where the taxi companies have agreed that if for whatever reason medallion holder defaults on their loan the taxi company will operate their medallion and make an arrangement where they will make the payments until the lender until it goes to another medallion holder. we fully support you supporting this item. thank you.

>> good afternoon. thank you. well, one lawsuit disappears as the other one will be pending. the federal american with disability act lawsuit is just ready to be settled. other than that, i would echo all that kim said. the permitting mechanism and proposition k disintegrated to many of people get the medallion for free. the city does not get any money for it. they are at retirement age and they are forced to work. they can't transfer it. under this program the drivers

can now engineer a retirement fund for themselves. it is a big support for the drivers as well. >> good afternoon directors. i was one of the first person who pursued and made tons of efforts to bring this medallion program online. so much so that nobody knows about the flyers passed all over the town. now she don't know me. anyhow, getting back to the business, i want to ask this. i want truth. i want reality. i don't want a backdoor game. there is a lot going on in this taxi department.

i sent an email requesting deborah johnson to hold some type of committee. she refused to get the new york lender, the largest in the country, she delayed it for two months. i meet her. i talk to her in the meeting. she kept them out with a condition. finally when i sent an email, she start talking to them. they said ok, give us the rules and regulations. she delayed the rules and regulations so much that she wanted the other party to get out the loan application printed up in this much time. i suggested to her that there are other people who are willing to lend money, even $500 million. she doesn't want to talk about it. that is going to reduce the medallion by 20% to 30%. how are you going to tell the

buyer, hey, the system is changing at the airport but you still are to pay because this is a medallion sold to you. based on that, there is no disclaimer. thank you. >> the fcda has been one of the biggest opponent on selling medallions. i continue to think it is wrong to fix the budget from taking these medallions from hundreds of drivers who waited years for these. we have been weighed to reluctantly go along with this project because of the concern shown for these drivers on the

list. we have been led to believe that these drivers can still be issued medallions by putting in their time. they are too old to wait. i am hoping that is not forgotten in the zeal to sell the medallions that these drivers who really do tough, dangerous work out there are the ones getting this money are not forgotten and that this system come to fruition. you know, tell hurt a lot of drivers who put their careers into this. thank you.

>> i do a blog called the phantom cabdriver fights back. i think you heard one of the arguments everyone gave you about 10 times before. i can't imagine any process that has been more transparent to the town hall meetings in which it was selected. everybody had a chance to talk. i think it has been done very fairly. we have been over and over this. i think it is time you went ahead with this. thank you very much. >> good evening again. afternoon. maybe i will take off the sunglasses. i can appreciate all of the owners that have a medallion that want to sell and want to retire. but if this is a pot of gold, why don't they retire. to say that these are free medallions, every time i hear

the word free medallion, i think about the 18 years or 17 years that i served this city. i was arrested twice on false charges by the police. taxi detail and so forth, you know. the taxi commission after five days wanting to revoke my medallion after i worked 17 years, without hesitation. they suspended it and wanted to revoke it in five days. but those were false charges. so i hardly think it is free. they don't teach that in college, ok. there is no college in the world expect london. one. not any in the u.s. to learn you have to go through the paces and survive.

nobody thinks they will be a cabdriver the rest of their life. they do it to make a living and find out it is not that bad. then it gets worse and worse and worse. you get tired of it after a while. to say that it is free is a ridiculous under statement. we worked years to get these medallions. i don't agree. i think you are ruining the service. we have it good here. we do. and drivers are helpless to do anything about anything around here. >> is there any other member of the public winner to address the board on this matter?

>> so in the summary it says, i am going to focus on the repurchase obligation. it says if we act or modify to terminate the pilot program, really the only action that would trigger our repurchase obligation would be to say if we said an already sold medallion is already transferable if we legislated the value of it right back out. >> that is correct. >> all right. so then will that apply also to the medallions that go out through the retiree program? or only to direct sales? the way i read it is that we would have to repurcha for the initial purchase price. in the retiree scenario, we at the m.t.a. do not realize the full purchase price. so for example in the retiree scenario we only get 15% of the repurchase price.

>> the situation is that we currently have or we are walking towards a situation where we will have transferable medallions and nontransferable medallions. i think you are talking about a revenue that might come monthly to the m.t.a. and when we are talking about transferable medailyions, those sold by a previous owner to new owner or that were held because of the death or surender of a previous owner and are being sold out right to the new owner. >> so it really covers direct sales situation. this is not public to a program where we will be splitting it with a retiree? >> no. other than some of the transfer

fees go to the driver fund. but that is the only split. if we are forced, we will have a situation where we realized all of the funds or the vast majority of them in the first instance. >> right. >> my question is, is there any calculation for depreciation for use of the medallions? i realize that it is hopefully something that will never come to pass. but if we did have to repurchase a huge lot of medallions it would be very expensive. to give somebody the original purchase price when they had the use of the medallion for a long time. rather clear obligation is the board passes this item and if we enter into the lender agreement it would be to

provide the purchase price regardless of what you might call the current market value or depreciation. this would only arise if you said these once transferable medallions that you bought it but you can't sell it. a lesser step if the board were to pull back on this taxi medallion program would be to say we are not going to sell anymore. but the ones that had been sold could be sold. under those circumstances you would not incur this liability. if we went forward with medallion sales we might sell 20 or 30 medallions over the course of 30 days. they could say we are not going to sell any more medallions.

so long as they maintain transferable. >> it would be up to the board. it is still within your control and purview. >> that's correct. >> ok. just to be clear this repurchase obligation will apply only to directly to medallions that have initially been resold by the m.t.a. >> it would apply to any transferable medallion, including those sold by previous owners. >> since there are no such owners now, presumably those are medallions that are going to be sold in the first instance by the m.t.a. >> i think there is potential sellers in the room today who are very much looking forward to tomorrow, assuming that the board passes this item. but the board's action is necessary to proceed. once the board authorizes this, if they choose to do so, we

will be authorized to execute agreements with the lenders and the buyers and sellers will be fill filling out the appropriate documents. currently we have about 18 transactions that are pretty much ready to go. that is as many as we know will go forward. >> perhaps i am missing something. i will try to make it as simple as we can. what is before us today, would we ever be in a situation we would be asked to pay $250,000 for a medallion that we, the m.t.a., never realized $250,000 in revenue? >> yes. >> ok. what is that situation? >> if an individual sells their medallion, we would get a transfer fee. and the balance would go to the seller.

that medallion would be a transferable medallion. if we were to remove the bundle of property rights we would have to compensate the owner. >> that is if we did not allow them to sell it. >> an individual would gain the right to sell the medallion as to us selling it directly. is that essentially how that would occur? >> we have about 16 individuals who were ready to sell their medallions tomorrow. >> i continue to be confused. i guess i have a concern about the fact that we may have to repurchase a medallion with money that we never received. but i understand that this is an unlikely event hoping that we would be hampering the transfer ability. >> i think we pick up that liability if we do not allow the purchaser to subsequently

sell that medallion in the future. >> now if the market price on medallions were to go down, that would be all the more reason for the board to continue to allow those particular medallions to be transferable because they could transfer at whatever the market price was at that time or whatever the appropriate price was. >> maybe i should back up and say i certainly have no intention of reversing the transfer ability. the reason why we are doing it is to see what effect it will have. that is why it is a pilot program. the repurchase program concerns me because i don't think it will convince anyone else. that was my one concern. the ayes have it. it is unanimous. thank you very much. great work.

ok. >> chairman murphy of the c.a.c. is not here today. so there is no report. we will move to public comment. >> good afternoon. >> good afternoon board members. my name is martin mcclain. the reason i came over here is that we have experienced a situation where the residential parking, the two-hour parking, automobiles or vehicles without stickers on the bumper being abused. apparently by the agents of the department of parking and traffic. perhaps i could put this in the form of a question. if there ime