is a very important one. we wanted to hear directly from the chief financial officer. i know that mr. ford could not be here today and not just myself, but president chiu and a number of other supervisors pretension to what is happening with muni, so we will turn it over to muni's ceo. >> we appreciate the opportunity to give a summary of our over time. i'm going to give a general overview on the numbers of our overtime and, with me, i have my colleagues who can speak to specific issues with the transit division and enforcement division who are major over time users.

supervisor campos: for the record, we have been joined by supervisor mark farrell. >> we want to focus on the transit division and talk about overtime in other divisions. to give you some numbers about the compliance and the ordinance -- highlights of the key consideration and finally end up with the management strategy on how we are addressing over time. supervisor campos: i want to apologize -- there is an overflow room. more people want to watch the hearing and there is not enough room in this committee room, please go to the board chambers said he will be able to watch from their and, during public comment, you can also speak and

come to this room to speak. my apologies. please continue. >> on this slide is a snapshot of the mta-wide over time. this is the annual budget for this fiscal year, the actual nine months and projected year end totals. the budget is about $33 million. we spent $36.8 million to date and we are projecting $54.1 million by the end of the year. the transit division, you can see by the pie chart is a majority of the overtime user in our agency. on the blue pie chart are the hours. you can compare ours $2 and there are pretty close in terms of usage. the transit division accounts for 94% of overtime and 93% of the hours. we are projected to be about

154% of budget at the conclusion of the fiscal year. this is the year to year comparisons for the first nine months this fiscal year. fiscal mine, 10 and 11. we have been averaging about 700,000 hours of overtime -- of overtime for the first nine months. this year, we have a spike, at 731,000 hours. on expenditures, our expenditures are going up, because of the salary and benefit increases to do with overtime. you can see that represented on the bottom left of the graph. the budget actual on the budget right for fiscal 2009, in fiscal 10, what happened is we did increase our budget in fiscal 2010, so we were able to be below our budget. in fiscal 11, we reduced our

overtime budget because to balance our budget, we felt we could reach a lower budget but so far we have not been able to. this is a picture of the transit division for the current year. the three major areas that drive over time in the transit division, the biggest part of the pie chart is transit operators. they account for about $20 million of the overall over time. we have the vehicle maintenance staff and waste staff that accounts for about 10 million of the operators. another half of the vehicle may tenants overtime is also captured in st. inspectors on the street. in terms of overtime hours, you can see the picture is different because of the pay differentials. it is a much larger piece of pie

on the overtime basis. the graph shows the annual budget of $31 million. we have overspent for the first nine months at $34.6 million and we expect to incur expenditures of about $48 million by the end of the year. 70% of the overtime is consumed by operators, and supervisors. we are projecting them to be about 157 of the budget. supervisor farrell: thank you for the presentation so far. you are tracking to be 50% over budget right now for the transit division. thank you for the data, but the bigger question is why? >> we are going to go to that the end of the chart.

after that, the director will come and speak to some of the reasons. let me quickly finish -- this is a year to year division of the -- year to year vision of the transit division. once again, in fiscal 2009, we have $654,000 of overtime. we are projecting to be about 681,000 hours of overtime. you can see the division's driving the overtime. the operators are the biggest driver of overtime. we do see some overtime and other areas, particularly in mechanics and transit supervisors who are out in the streets, car cleaners, maintenance techs and station agents are of 5% of overtime. this slide is the other side

decides transit. we have divided it into three buckets of our functional areas. the biggest is in our trade -- in our safety training enforcement and mostly driven by the parking control officers. the parking control officers actually drive about 46% of the overtime in our non-transit division. the other group that is a large driver -- supervisor campos: if i could ask folks to please note there is a hearing in progress. he could be as quiet as you possibly can. there is an overflow room, the board chambers, if there are not enough seats in this room. you can go to the chamber and watch the proceedings from there. but again, i would ask you please know that there is a hearing in progress.

if i may ask for your attention so we can proceed with the hearing. thank you. >> on the bottom of the power point slide -- the other divisions are seeing a reduction over time for 2011. if you can look at the dollars on the bottom, we have occurred -- have incurred more overtime for these divisions. in terms of the executive directive, in terms of compliance, all of our noncompliance are in the transit division -- 71 operators have exceeded the threshold, 14 transit supervisors and mechanics. these individuals would account for the noncompliance of the legislative directives. now we're getting to the meat of

the issue. what is actually driving the overtime and why does the mta and muni have so much overtime? as we are looking at over time usage, muni has been a number one overtime user in the department. there are multiple reasons, but one of the biggest issues is we use over time as a tool to manage service delivery built into our over time -- supervisor campos: i would simply ask members of the audience -- there is no speaking because we're trying to listen to the presentation. out of respect for the people who are presenting and to the process, you will have an opportunity to speak when the item you are here for comes up. we simply ask you to please make sure we can listen to the presentation. >> john haley can speak to this a little bit more, but the overtime and to the runs --

especially during peak times as our service during peak times -- we use that to mitigate service and to -- as a tool for day-to- day service delivery. the lack of part-time operators presents scheduling challenges and we are looking to include them in the negotiations because of our peak. schedule. we're having a significant issue of selling our front-line positions. we're having some challenges in identifying the hiring process. both john haley and reggie mason can speak to that in more detail. we also saw accelerated retirement because of the sunset of the wellness program. we are still using overtime to fill a significant portion of our run. the other area that has hit us unusually this year is that a lot of our front-line

individuals actually participated in the agreement which requires furloughs and so we are seeing the impact of the furloughs, particularly on mechanics where on average day, individuals are taking furloughs and so we need to back fill them. those are one of the things happening this year that is exacerbating overtime. the other area we have is, as a city, we have a significant amount of special events. almost every weekend, there is something. this is service above and beyond this regular schedule and we have traditionally funded that because of the cost-benefit perspective. it is actually better to fund these events over time, but it is incredibly resource intensive because it requires a large number of our workforce to be participating in these special

events. >> if i may interject -- lots of events in san francisco, but you know what the events are. you have a sense of what events will take place in the year and budget for those years. notwithstanding not -- notwithstanding that budgeting, you are talking about a budget of 30 million and overtime, 48 million. so lots of events, but isn't that supposed betaken into account by your budget to begin with? >> absolutely right. we do take into account special events, but this year we had the world series in the first part of the fiscal year that we did not budget. the world series happened in fiscal year 11, at the end of the fall. those are the kinds of unbudgeted special bins we have to deal with. special events are part of the budgeting process.

we probably do a little better at tracking that and mr. mason and mr. paley can speak to how they handle special events coverage. -- mr. haley can speak to that. our fleet of facilities are in the latter part of their life cycle and require a lot of maintenance attention. i did not put this into the key consideration, but some of our labor contracts until recently, they were scheduled monday through friday, but we need electrician's available, so they are working on weekends to provide service and that is being changed and we had a workweek monday through friday even though we had a 24/7 service delivery. we're trying to chew up our

contracts to make sure we have a service delivery that is much more than monday through friday schedule. supervisor farrell: a lot of this is referring back to labor contracts and i guess -- why are we referring to those in the first place when electricians on the weekends since muni has been around. why won't -- why words those discussed before? it seems like poor negotiating beforehand. it's not an excuse to say we are just realizing these things. >> by a understanding of what happened is the electricians contract is a citywide contract. so muni employees are part of the contract until recently when we have taken over the contract from the city. i think the city led bargaining in terms -- the muni employees participated in that.

that is my understanding as to why the contracts and a being monday through friday. we were part of the citywide contract and maybe my colleagues can speak to more of the details, but right now, we are separating ourselves from the rest of the city and recognizing our service is much different in the main city employees. supervisor farrell: is that with this contract itself? the contract is a significant driver as well. >> for example, the sciu covers collection receivers and when the global contract city-wide includes furloughs, the affect -- it affects our city-wide employes. we cannot have fire control officers on furloughs because we need to provide that service level but we have to backfill. we are trying to figure these issues out where we are different from the city and figure out a way where we can

break out from major discussions on these contracts. >> a lot of the issues we're talking about here are true of the city-wide contracts. the issue we're talking about with electrician's is prevalent in many of our contracts. there are many other provisions that drive overtime use in different ways, some positive and some negative. to the question of how we end up in this situation, it's a better question for a labor negotiator than for me. generally speaking, in a collective bargaining process like we have in severance is good, -- like we have in san francisco, the best way is with your offering wage increases and money on the other side. when the city is asking for money back for our employees,

work rules are often what we suffer from as a trade-off. that is a very long process and many of the provisions we are talking about here stretch back many, many years. often and, some of these were secured at moments in time when employees are taking significant pay cuts. maybe as part of the conversation for the work plan in the coming year, we can talk about whether deeper view of some of these contract revisions -- we have even been talking internally about how this is a possible projects for the coming year. >> i don't know if you are the appropriate person, but in terms of all of the contracts we're talking about that affect muni, how many are city-wide that muni is an ancillary participant and impact in ways we are not anticipating on a citywide levels as opposed to ones are specific to muni.

>> we have 50 different labor contracts as a city. the proposition carved out and creative comparable units which are comparable to what the city maintains for the same class. there's an electrician in any other department by the mta is handled by city-wide electricians contract and now the mta negotiate a specific electrician's contract. the same is true of our 50 labor contracts in the city. we have something approaching 100 contracts with the mta approaching 100 and the city voting 50. mostly comparable, but still some divergence. supervisor farrell: forgive me, but being newer to the board here, these contracts are the ones where -- are they governed

by the other city contracts and therefore there is no flexibility to say we can work hours we know we do, this is inappropriate for our contract, or are you down to these negotiations? >> the controller mentioned the proposition where we can now create our own work rules. we are now implementing the mta work rules. local 6 which we just implemented now makes the work hours different from the city electricians. we now have a seven-day work week and will no longer be getting overtime on a electricians' we typically have been. as we are rolling over, we are renegotiating them. >> what year were those propositions past? >> ea was in 1997 and e was in 1999. the bottom line is the way we manage overtime. very similar -- i heard the

presentation last time, a lot of the big departments that have a lot of overtime, we sort of managed at salary and benefit bottom line because of some of the vacancies and we cannot hire. we traditionally have been able to absorb over time through savings and salary and that will be the case this year as well. to the extent we are able to hire up, we will have to revisit the way we budget. but as of today, we actually look at salary to manage the bottom line because of the flexibility over time does offer us. we have all these other issues. this is the last slide and then i will ask john haley and mr. mason to come up. we are looking to fill vacancies in the parameters of

our budget and we're having a significant difficulty in attracting, recruiting, training and identifying individuals. mr. haley can speak to the number -- like operators that enter into recruitment and driving a new large difference between the number of operators to end up driving between the ones who actually initiate interest in the position. the board is receiving monthly overtime reports and their drilling down on these overtime areas. we are also working to schedule -- working to manage unscheduled absences. that increases over time needs. we have significant issues with unscheduled absences for a variety of reasons. we are trying to drill down and look at those areas. as i mentioned, we are looking at our scheduled practice and contractual requirements. for example, we are able to

implement part time operators that we would see some reduction in over time because there is over time where we could staff the peak time schedule as well as local 6. when the contract comes up next, we would be looking to break away from the city in terms of our needs there. a lot of the overtime is driven not by contractual requirements and scheduled practices of the transit system. the other question we are trying to get our arms around is what is the sweet spot for overtime? what does -- where does overtime costs outweigh the benefits? in the service model of muni, there's always going to be over time, but what is an acceptable level where you have to hire two people instead of one with overtime? we start recognizing the significant additional cost because of the additional play.

hopefully the next several months we will have a better idea of where that sweet spot is because we are always going to have a level of over time, we just don't know where the level appropriate for this service model we are providing. we're happy to come back to you after we do that analysis and we can talk more about, but at this point, if you want your from director john haley. supervisor campos: yes. >> good morning. i am at your disposal in terms of questions. i am john haley, director of operations. >> i am reginald mason and i'm the director of safety -- safety

in treading enforcements. supervisor campos: the want to take questions or do you want to add to what has been said? >> if it pleases the board, we're happy to take questions. supervisor campos: why don't we turn it over to president chiu? president chiu: overtime has affected different apartments for many years. elected officials may come and go but this is something your department has not been able to get a handle on for a long time: so if we could try to drill down a little on that. do you know with other jurisdictions: are the best practices and what are good agencies doing to manage overtime? how did the percentages compared to what we've got here? >> in our system, and this amplifies to some of what was said earlier, over time is not a

four-letter word, if you will, in transit because especially the service plans driven by the amount of service and operators and applied the work rules and we have the ability to have someone working 12 hour day. the nature of our business is reischauer, so if we stretch that to have one person work, inherent in that is over time. in terms of the best practices, most of the transit system's i'm aware of, especially on the bus side deploy part-time operators to be somewhere between 10 to a quarter of their workforce because of the peaks in schedules. as a benchmark for ballpark as past practice, that is a way to build efficient schedules, the use of part-timers.

we do not have that available to us right now. that causes some of additional scheduled overtime. the other variables that take into effect to build on what was said is the things like the quality of the service, if you will. when you have a lot of delays, that causes additional overtime. one of the other things is as well as the age of the fleet, in terms of the fundamental practice of providing service on a transit system, best practice is most people looked to balance some percentage of old- timers and part-timers on both bus and rail molds somewhere between 10% to 25% to balance

the peak times. muni is a little bit less peak- intensive than other systems, but in general, that is the principal best practice in that regard. president chiu: you are saying we're not doing what our best practice is another's jurisdictions to handle this? >> i think that is something we need to get to in terms of the schedule. i would say it to use a term of art, the ability of the management to control how it is going to deliver the service once the service standards dictate we're going to have this many vehicles at this time and how that service is run, management in this particular case needs what was described as more flexible work rules in order to -- i would submit to

you -- in order to effect best practices. >> i assume these are discussions you are having with the union on how to handle this? >> all the time. i would suggest to the board this is not a static process. it is a way that you have to wait between contract and negotiate. with your help and support last fall, we were able to restore some of the service that was cut. in doing so, what we were able to do was aggressively use a reduction of something called standby time which is simply time you pay people to be available but not operated vehicle. that has driven up our cost over time and we were able to take a number of actions within the contract and stretched our interpretation to do that more effectively.

fess it is things we are looking at constantly, but at the same time, to get us to the next level and make a difference both financially in terms of the quality of service, we need to create even more flexibility in the work rules, such as part- timers. president chiu: i've noticed that you have dozens and dozens of workers working 30% of overtime. assuming you have workers working 80 hour weeks for three or four months of time during the year, have you done an analysis with your transit operators for those 70 individuals or your supervisors at work at those bases to understand why? >> i think the other thing that drives that for anything else is staffing loads. on the of riverside, because of