into processed and the audit procedures revealed that as a result of manual entry errors and to the time sequencing system, and accurate they could reused to compensate employees. this resulted in average over payments of $63 per error had an error rate of 0.26%. we found that there were 10 errors out of 3888. the rate of error was low in that regard. the average over payment and error rate was used to project across all 273,000 k records, so for this particular fiscal year, that potentially would estimated to an overpayment of $44,000, so what we recommend it was back eliminate manual inputs into the city payroll system by partnering with the comptroller to systematically load the department's times system into

the city wide payroll system and automated interface will also reduce the risk of manual errors. supervisor campos: how many departments do manual in putting? do we not know? most? >> [inaudible] supervisor campos: if you could please come forward. just a sense of how many departments do manual in putting. >> all of the department's except for at this point, in the system, fire will be one of the apartments that does interface. supervisor campos: i would imagine that if this is happening with the fired apartment to the extent that the manually in putting that information is a very real possibility happening with other departments. >> i would expect so and we're

determining which are extraneous at this point and which ones we need to have to avoid that kind of error. supervisor campos: thank you very much. >> what we also found was that approximately 65% of the total fire department's special pay codes and tests are basically not used to pay employees. what we have recommended to the fire department was to request the controller to temporarily remove those pay cuts, but again, we also recognize this is going to eliminate some of the concerns and issues that we are having. additionally, they premiums that a majority of employees received

can be administered more efficiently. 82% of employees received a holiday premium pay. as the premium is manually entered into the kind system, there's a risk for overpayment or underpayment. we are asking that the department identified these types of premium pay that the majority of their employees receive and that those cuts actually be automated into the system. supervisor campos: thank you. just a final overall question, do you have a sense of what other cities do with payroll? is there a manual in putting that happens that is typical in other cities?

>> this is the implementation of human capital management, functionality that goes across human resources, payroll time, and labor and absence management and benefits. what we have found is that most large municipalities do have some sort of automated time system. many still do direct time entry into the system as opposed to having employees automatically into the data or enter it into a local system and an interface it. anytime you have manual entry into any system, whether it is online or through some sort of a paper-based system, you are going to have some errors, but you can reduce that by increasing the number of edits and reducing the possible selection for codes to be used to into that time.

supervisor campos: is there a process where you have at least a second set of eyes looking at least what has been put into the system? >> we do in two places. we have a system looking to determine if the rules are being met, and the second is the department itself. supervisor campos: thank you. do you want and add anything else? great. why don't we now hear from the fire department, from deputy chief fields. as i was noting, fields this campos in english. >> i have been sharing that with my co-workers, supervisor.

good morning. just in response to the audit report, the fire department worked diligently and cooperatively with the audit team for over three months. we recognize the enormous task that they were given. as you can see in the audit report titled recommendations and responses, the fire department concurs with most of the audit and recommendations. as a result of the recommendations, we have begun to implement some of the issues that were outlined. in addition to that, there are also recommendations that only conversation to the city -- particularly dhr labor relations and local 798 -- can result. we are ready and willing to engage in those conversations.

once they have come to some sort of resolution regarding these issues, we are in a position to implement them immediately. today, i have with me the fire department cfo and our human resources director to answer any questions that you may have. supervisor campos: thank you. i do not know if we have questions, but i wanted to ask a couple of points. first of all, with respect to the suppression, non- suppression payment and there was a finding that, for instance, for -- let's see, for payout -- you know, there was an overpayment of possibly $150,000 if you compare what you are paying versus what is required

by the mou and the same thing with vacation accrual. you have an overpayment of $146,000. how was that decision made in terms of paying above what the mou they require? how does that happen? >> i just want to say again that we agree with the auditors' recommendation that these accruals share bid just upon retirement for non-suppression employees, but we would also like to note that in the report, the audit team reviewed 23 non- agression retirement payouts for fiscal year 2009-2010, and they performed a sample, and using the fire department figures, with vacation conversions that their figures, without, so they arrive at that difference of the

four samples and took that average and used it as a multiplier we believe that figure is an extrapolation of those numbers and we are not in agreement there was an overpayment of $150,000. supervisor campos: let's say it's half that. how was it decided to pay an employee above what the m.o.u. requires? >> this is a longstanding practice and it's the assumption that the majority of that time was burned when that member was in fire suppression. it is historically in the fire department to go to fieldwork administration. they make that transition in the latter part of their careers. it was decided many, many years ago that it would be unfair to

penalize them and pay out at the administrative rate. supervisor campos: i think one overarching question for me is, is there someone in the department that looks at the m.o.u., not only with respect to this issue, but every issued covered by the m.o.u. to make sure you are following the m.o.u. and identify those areas where there may be an overpayment or underpayment in terms of what the m.o.u. requires? >> when -- several years ago, this came to the chiefs attention. i will speak on her behalf. she approached the comptroller's office and the city attorney. she spoke with local 798 and

expressed her concern. this did not appear to be normal to her. she was basically told this is past practice. this is how we do things. supervisor campos: i appreciate that. i know that chief takes these issues very seriously. one thing i wonder is was the board of supervisors and formed that decision had been made? >> i cannot answer that. >> i think the comptroller wanted to add to that. >> actually, there was a hearing at this committee many years ago on the issue of both the accrual rates for vacation we are discussing and the issue of non suppressions staff on retirement. i think the outcome was there

was a commission to go forward with a meet and confer that is required because its past practice and that has not happened. supervisor campos: what i would ask as the chair of the committee is for the fire department to look at its operations and to see if there are other areas where it is past practice to pay above what the m.o.u. requires and to let us know if that is the case the that at a minimum there can be a discussion at the board of supervisors level where the city is making over payment. i think in these tough financial times, we have an obligation to make sure we are as cautious

with taxpayer money as we can be and we clearly need to fill our obligations under the m.o.u.. where there is discretion, i think it's important that the elected policy-makers are aware of that and i appreciate the fact that a prior board of supervisors knew that. but i know my colleagues and i would be interested in at least knowing where that is the case. maybe what we can do is come back and do a follow-up hearing on this item. any questions? unless you have anything else to add, chief, why don't we open it to public comment on item number two. any member of the public who like to speak on item number two, please come forward. seeing none, public comment is

closed. i would like to ask we can continue this item to the call of the chair. if we can have a motion. we have a motion, if we can take that without objective -- without objection. thank you to view in the fire department for your hard work in making this information available. we look forward to hearing on the progress on these issues. madame clerk, can you call item no. 3? >> item #3 is the hearing on the controller's staff report on the budgetary overtime costs for the largest apartment and use of overtime hours. >> thank you. this is an item continued from our last hearing. the issue of overtime 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