>> i have a question for you. there was the notion of, it is cheaper to pay overtime than to hire the new employees. that sentiment exists across the departments across the city, in different areas. my question is, how long can we do this? we are here for the long haul. if you think about the future of san francisco, this may be ok for one year. i wonder about, when we talk about the police department and the lack of funding for the academy class, how do you think about this? >> we cannot rely on this, as a general rule to the staff. you have to do the math for each

case. for certain classifications it is cheaper to hire other people. it is important for the vacation problems, if you are waiting for a new class to be available, we'll not how many people are going to retire. we think that this is appropriate. it is not generally a good idea to use this as a plan, but with fire it makes more sense than in other places. the other issue is with the sheriff's department. it does not make sense to hire a new deputy in what may be a temporary increase. and if we have to lay people off, we are paying up to five years of their medical benefits. we're much better off having the

flexibility of overtime. it is absolutely true that we have to have planning and we promote this within the department. we need to have regular examinations for the fire and the police, in all of these key areas with minimum staffing. you have to have this. >> on that note, and the point that he is making, in the company, when there are large overtime costs, at some time the human-resources department looks at the issue of staffing to see if there is adequate staffing. because if you are spending a lot of time on overtime staffing -- this needs to change. and when you look at the department light the fire department, we keep hearing about how this is more cost- effective to pay overtime that

it is to hire people. but if you go back to 2005 or 2006, the fire department was spending $7.2 million a year. and now this is 26.6 million. at some time, notwithstanding that this is cheaper to spend over time -- they were doing what we would want for them to do in terms of the numbers. have you looked at what happened between 2005 and 2006? the cost has gone up so much. has the h.r. department been looking at this? >> we have not done this analysis. the structure that we have in the city requires the department heads to look into how to best decide their staffing needs.

we do these examinations and try to plan and we will need to use them. there was a time when there were not regular examinations and now we have the regular schedule. we hope to have a regular stream of people coming in even during the tough times. >> have you asked what happened, why go in like this? >> we have a general discussion that you have heard about. we will talk to the compensation yet to have them try to drill down to a deeper level -- >> president? >> i have a question around section 18, because the sets the overtime our limits. have you thought about reducing these numbers.

you essentially say that these overtime hours -- this is assuming you have an employee working for a third of the year at 80 hours per week. i wonder if reducing this would help to keep down the overtime hours. >> we did see, when this was enacted a few years ago, we did see a reduction in overtime. we had a number of people and i was surprised to see that this was doubled, and this could potentially damage to public safety, with power tools and driving vehicles. this has had a positive effect. and i know in certain areas, we would have to give exemptions. this may help but the bigger

question is about if there are enough people to do the work. and if enough people can spread this around, it is that different people will have this. where we did break through, we have the reliance by individuals on overtime, and the department was willing to give this to them because they were good workers. this raised the overtime overall. i would venture thus, that it would help to reduce this further. >> if there was a cap of 20% to go through the labor process, this to be a mechanism to bring down the costs. i think that we should talk about that after the meeting. do you have a breakdown of what departments these employees that

caused the breakdown or from? >> this was largely in the fire department, with one individual who was a clerical employee. i have information from 2009 and 2010. >> in the full report -- you have that in front of you. the fire department and mass transit authority represented departments and the sheriff -- so the vast majority is the mass transit authority. the transit operators, transit supervisors, electrical transit system mechanics, the fire department has the firefighters and one paramedic, and the

sheriff -- we spoke about the deputy sheriffs. i could give you a copy of this list. >> the other cities, how do we compare to some of the best of the well-performing cities in the country? we have levels that are comparable? >> we could probably try to find this out. it may be difficult to get this information. we would be happy to take a look and see what is out there. i am not aware of any city with an overtime win at like we have. there are some charter cities but not charter counties. >> and there are other cities without the overtime costs.

what's most cities do not also have a transit agency, or a power-generating agency. counties will usually have those. i have never seen these -- but we would be happy to do an opinion poll, for the large cities in california, to look at what they are doing. we would like to learn from their experience. >> final question about the approval process. i understand the process for the individual employee, but if the department is wanting to spend over time above what has been budgeted, is their approval by the mayor and the board of supervisors? >> the only process that exists for approval is the exemption process, and we do an analysis.

i will go recommendation from my staff. >> can we have a rule but basically says that you have to stay within your budget to each department, and the only way to spend above your budget, is to get the approval of the board and the mayor. >> this would be a change. >> this would be a significant change in the way to do this would be to make overtime its own category of expenditure, -- where the funds could not be transferred in and out of the account. >> and have reconsidered this? >> we have not, for reasons of flexibility. and you can see the overtime departments -- this is in police and firefighters and transit. i do believe if he were to do

this, we would have to be very careful as the city, in budgeting the realistic overtime projections. this has not been the case over the last decade. >> i do not think that this is such a radical concept. we would be very careful in budgeting what is actually expected to be spent. i will be following up with the city attorney's to see how this change would look. the idea is that you budget a realistic amount and as the year progresses, you feel that you may go over this. this provides a mechanism for the public to know that this is happening, and to come before the elected body to explain why the change has been needed. and if there is a need to schedule a hearing on a timely

basis, this happens from time to time. this is very flexible. i am try to understand what the impediment maybe. >> we can help with the language in terms of the legislation. if this was the will of the committee. this is in the appropriations process. that level is up to the board of supervisors. in terms of a monitoring, since the legislation has been put in place, the monitoring will go on forever department, and certainly the top five. this represents 88% of the overtime. this is the lion's share of the overtime. this is looked at in the monthly reports and hearings that take place at the financial committee. >> i have a couple of quick

questions. i asked about comparisons to the other cities, and did not want to create additional work for you. >> we just make them work. >> if it is possible to compare the rates for the departments, the two that are jumping out -- fire departments, and other transit agencies, it would be helpful to compare this. i know that the departments are looking at this carefully, but the other question that i had, you mentioned that there are some departments that make the claim that using overtime is cheaper than hiring new people. i hear this as an argument, but there -- i wonder if there is an analytical framework that will document and justify this?

>> we have an hourly rate, for these costs. we're happy to do that. >> this has been prepared by the fire department, a number of years ago, and was reviewed by the comptroller's office and the mayor's office. this is a financial analysis. not necessarily human-resources. we can bring this to the committee. this is only the one department, the fire department that has made this analysis. and they have shown that this is cheaper. this is largely based on the cost of recruitment, the cost of trainees who are doing training and so forth, and the kind of payment that firefighters received, what is on the pension and what is not, what is subject to the additional benefits. we can certainly bring this back to the committee.

>> i would love to see this. fire department's salaries are 18% above the market and the wonder about the impact on this analysis. supervisor? >> to follow on this comment, but he was speaking about is that fire is the only one that is articulated this way. i have heard this from multiple departments. we want to bring more people on board. if this is one department -- i have heard this from many departments. my earlier comment, the financial analysis on this basis -- i get this. has anyone overlaid the 20-year staffing level of each department, and how we will ultimately do this? is this overlaid as well?

what's -- >> we look at the full number of positions, and we have an analysis to show the change. each department is responsible for succession planning. the mta and police and fire, we try to anticipate the recruitment, if it takes eight months to hire and train someone. this has not been done on a city-wide basis. there is the number of expected retirements -- >> we have the work force

analysis we do every year. we look at projections in terms of employment and will provide those. >> the theory is that i understand this. at a certain time, you have to bite the bullet and retain new employees. i don't want to burden future boards with biting this bullet. i would be interested in looking at this report. >> i have a final question. i wanted to ask yo uwha ti -- you what i asked h.r. has your office analyzed how the fire department was able to do their work and only spend

$7.2 million in fiscal 2006. and then 26.6 a couple of years later. the department indicated that they had not done this analysis. has the comptroller's office? >> i would have to go back. it had to do with the brownouts. in that particular fiscal year. stations browned out over the course of the year to reduce the budget. a lot of the savings is in overtime. >> that would be great. let's turn it over to our fire chief. he is here with monica fields, a deputy chief, and the chief financial officer. and if i may, i was thinking

of thanking you and the fire department personnel, who dealt with the fire in the mission. thank you, and your members, for the work they did. >> thank you. >> go right ahead. >> it feels like deja vu. they -- i totally appreciate your questions on overtime and the fire department going in the wrong direction. i looked at the overall budget, how we budgeted. i looked to president chu's comments, how the trend was looking in the fire service. at the time, we had approximately the percentage of overtime to general funds, this was 4%. now this is around 11% and 12%.

we did an analysis. it is counterintuitive. it had to be explained to me, over and over again. the mayor's budget office. the comptroller's office assisted us. overtime is a negative connotation. to see the trend increasing, from $7 million to $26 million. the most dramatic reason this ent up, let me give you the count. we had 772 uniform members, now 1402 members. supervisor farrel is saying,

we are having the first class in 5 years. in terms of efficency, we have never come back for suplemental. we live in the budget. we do not anticipate needing to come for this. we live within our means. what we do, we dsave on the salary side. we are able to offset the overtime. and so, what we run the risk of doing is that -- we talked about it before. a sweet spot in terms of staffing. there are times we don't need the full-time equivalents. they are hard to maintain. i am being honest.

public safety -- the pensions are at age 55. benefit and fringe packages are rich. and so, we took a look. i was convinced after a lot o f debate about the increase in overtime. these have proven to be more expensive. we don't want to drop to the level, going to 1403. we are trying to match the new hires with retirements. i am happy to answer any questions. i just wanted to give context. this is a dramatic decrease. this is why overtime is going up, and ove r300-- over 300 +

drop. >> if you had this many firefighters today as opposed to 1403, do you say you'd end up with more money or less? >> that is wha ttht the analysis has shown. you see, over the 30-year projection, an increase in pension and benefits. we will need to do an analysis. i think 1403 is very lean. i am happy to walk any of you through this process. this is the direction i would take -- to drop my overtime for more fte's. this would be well-recieved and

i know labor is concerned about the numbers dropping to this level. we are tryi9ng -- trying to continue to protect lives and property. we are mindful of public safety benefit packages. we are allowing ourselves to increase our overtime. we and increase our over time. we had -- we have staff on overtime over 20%, which is an outrageous number, but the analysis is they are not paying out of pocket the salaries, benefits, and the pension. that is why i believe in our analysis when we vetted through the budget analyst, we have been allowed to continue this practice because it has proven to be more financially

efficient. >> how did you do it -- president chiu: how did you do it in 2005. you said earlier it was staffing, but what made that difference? >> 350 more employees. we did reduce spending over time. but we were spending more on salary. supervisor farrell: thank you. president chiu. right now the base pay compared to other jurisdictions higher than other cities and counties. if you factor in overtime, a special pay, that nearly doubles. you are talking about a special

rate that is 30% higher than our counterparts. so, in 20008, we were at 8% over market. now we are at least 18% based on salary, 44%. i am wondering if it is a lack of parity. i wonder if that is driving our ability to either hire more folks. can you comment on that? >> the chief is very much an interested third party. on and not responsible for negotiating -- on and not responsible for negotiating wages and benefits. i believe the director of human resources would be more appropriate. i believe it was in the early to

mid-1990's, based on numbers in the police department, fire department, based on parity language, negotiating a package at that time. it has not dropped off. so, i think it has been negotiated. so, at some point, dhr works the local 7798. i believe that you raise a very good points. our hands are tied in terms of being able to respond to that situation.

president chiu: do you have a response to that? [laughter] >> i am under a bus right now. i am the chief of fish eater of the employees' contracts in 2007. let me say that in 2007, we had great difficulty with a police rate of pay. we did engage in a process to bring them to market. our -- i consider ourselves to be at market. i am sure you would agree that the situation officers encounter are not the same as those encountered in berkeley or some of these others. so, we have, as the chief indicated, the fire has on an

annual basis received the same rate of pay as police. we did make a proposal to break that parity, and we were not successful. it may not appear apparent to you, but we changed be overtime basis to reduce the overtime. president chiu: in fire? >> in fire, yes. we changed the period to 2 or 3 weeks. it is a technical point you can do under federal law. we think it was a good point to make. i think we have not broken parity. it is in the labor agreements.