city. from 2004-2007, the park was named monster park and the city received $3 million. but despite renewed authority it to enter into naming rights agreements after a voter- approved ballot initiative, the san francisco 49ers have not exercised his authority. therefore, the city is forgoing a potential 50% net naming rights revenue, which based on past experience, average about $1 million a year. now like to turn it over to my colleague, sarah duffy. supervisor farrell: can i ask a quick question on the forty- niners? what is the solution here? >> we spoke with recreation and park department and they threw their hands up a little bit. the only solution is to put pressure on the forty-niners

through the commission itself, perhaps. but there is not any way they can compel the 49ers into a naming rights agreement. supervisor farrell: so this was a bad deal entered into a while ago? >> we had some concerns at that time, yes. supervisor farrell: do you know they have not made any efforts? >> the recreation and parks department did not know the official reason why they did not make an effort, but there is speculation that trying to find a naming rights agreement is not one of their priorities at this time. supervisor farrell: again, the question is do you know they have not made any efforts or they'd have not succeeded? >> we do not know if they have made any efforts or not.

one other thing -- when we talk about the policies, we did make a recommendation and the city administrator agreed to begin to coordinate and centralize to some sort of uniform standards to advertising which is currently lacking. >> good morning, supervisors. my name is sarah duffy. and going to go over the findings related to the mta advertising contracts. mta has three advertising agreements. the first is the transit shelter agreement between clear channel and outdoor, the second is for vehicles and parking garages and the third is a memorandum of understanding betweenmta and

bart -- between mta and bart. this shows the revenues associated with those three agreements generated during a 10-year time frame through 2010. you can see over the past four years, the revenues have increased by $7.4 million. the increases are largely related to mta's success in negotiating a financial terms for contracts, which in part resulted from good economic climate in place when the contracts were negotiated. the transit advertising generates a majority of revenues for advertising on city property. as a result of the audit, we found mta has demonstrated a

lack of success in monitoring some of these advertising terms. for example, advertising for five of the city parking garages under mta management, titan has not sold any advertisements in these parking garages since the beginning of the agreement in 2009. titan has reported little interest in purchasing advertising space is in parking garages given the poor economic climate. but we noted the airport, their agreement resulted in advertisements located in elevators and passageways in the airport. these parking garages titan has the possibility of selling advertisements and are all located in downtown san francisco. in mission and other very high traffic locations. supervisor campos: was there any

analysis over what is happening with privately-and parking garages and the kind of advertising had that -- kind of advertising that happens in those places and whether or not they are able to secure advertising? >> we started looking at that and we did not have much -- we looked more at the publicly owned parking grudges in other cities. >> we tried to benchmark with other cities. all lot of this is proprietary information and we had a hard time obtaining it. we did call different advertisers in different areas in terms of their procedures, such as chicago, which has a large number of publicly-owned parking garage is. we did some spot checking, but i would not call a meeting any sort of audit standards. >> based on making calls to advertising agencies that

advertise in parking garages, we advertise conservatively mta could receive revenues of approximately $250,000 in advertising in these parking garages. also, mta receives monthly sales reports from tighten but does not have information on actual compared to advertising. unsold advertising space not only result in lost revenue potential, but also in graffiti that tends to be up in spots like transit vehicles where there is no advertising. supervisor campos: i know the finding is sfmta is not maximizing revenue in terms of these dollars. can you just summarize why that is the case?

what is that finding based on? >> our finding is based on the fact that there are not any ads that have been sold in parking garages and another term of the agreement is that titan has the possibility to sell digital display and in the advertisement and we did not see any of that. more oversight on the part of mta in terms of overseeing the ads with the two different contracts. in response to those recommendations, mta said it tightened is working to maximize sales and in the challenging economic times, it's difficult to sell the maximum amount of advertising. >we also looked at compliance.

most of the city's advertising agreements that have the infrastructure in good repair. present terms of mta and dpw, advertising companies have not complied with removing graffiti and vandalism in a timely manner. neither mta d norpw monitored the compliance with removing graffiti and vandalism. we found graffiti on transit shelters and commercial kiosks and found torn and missing advertisements and we found at least to public toilets on market streets that have been out of order for over two weeks. that would be part of the dpw agreement on maintaining public toilets. we also discovered news racks, which are part of the dpw

contracts did not only hold the newspapers but were being used as storage for trash and other things. our office had five recommendations intended to improve compliance with inventory maintenance and other requirements under the existing agreements with the exception of mta. all of the the parents agreed with our recommendations to provide an example of mta's responses -- recommendation 4.3 in our report is that mta should initiate quarterly site visits to inspect advertisements and associated infrastructure. mta says staff reviews these items as part of the regular duties, but the visits are not documented and the advertising space remains an issue. our office maintains all seven recommendations made to mta as

part of the ottoman terms of compliance and revenue generation remain feasible -- as part of the terms of compliance and revenue generation remain feasible. we like to thank the department for their support. supervisor farrell: backing up one slide, the green newspaper racks, -- those are dpw's? who is in charge of all the standalone racks? >> dpw has a contract with a clear channel to install those racks with the newspapers. they are in charge of maintaining them weekly. obviously they have not been doing that very well. we asked them for their records

how they are sure they are maintaining them weekly and clear channel does submit some form of records involved, but we found racks -- supervisor farrell: you are talking about the new, green ones. i'm less concerned about those. they are a vast improvement even if they are somewhat dilapidated according to report compared to some of the stand- alone. the ones that are filled with graffiti and our big eyesores, i wonder who's in charge of monitoring and taking care of it? >> we look at the agreement they had to maintain the news racks, but we don't know about the others. supervisor campos: any other comments before we hear from

mta on this issue? i get a couple follow-ups, just a couple of points on the budget analyst. one of the things that jumps out is the question of who in this city overseas, generally speaking, issues involving advertising? is there someone who is monitoring overall compliance with policies and procedures in the maximizing of revenue for the city? >> no. planning department is responsible for monitoring signs in the city. our finding was nobody is responsible. we recommended the city administrator become responsible, not so much for compliance, but setting the standards and making sure all the departments know what the standards and policies are. then each department becomes responsible for complying with city standards. supervisor campos: i think that

would be very helpful. it concerns me that there is no uniformity of standards citywide. it concerns me, for instance, that it seems for of the six departments implicated here do not, for instance, have standards that prohibit advertisements for political purposes, guns, and as problematic. i don't know the best way to make that happen. if a letter from the committee to the city administrator would make sense, but i do think is important to have a point person city-wide who is at least monitoring these issues. >> the city administrator did agree to be that point person, so would be good to appoint them. >> with respect to the dpw 7% issue, i think it makes sense for us to comeback and hear

directly from dpw in the near future about what efforts have been taken to address that issue. you are talking about millions of dollars, a significant amount of money. one of the things that was interesting to me was that departments do not always require approval of the ads that go up. from my understanding, the airport is the only one that does that? >> that is correct. supervisor campos: in terms of the best practice, do you have any idea if that makes sense? i would think before and that goes up that there should be someone who at least looks at it and decides whether or not it is consistent with the policies of this city. >> i don't believe we have best practice information on that particular piece. again, that would probably be

part of the standards the city administrator would set, whether doing, setting standards doing post checks and giving approval before would be best. >> i know it -- supervisor campos: i know that's sfmta require some approval of ads, but not necessarily everyone. trying to understand what the best practice should be is important. why don't we hear from the sfmta? we have the cfo with us. thank you for being here. we know we heard from the budget and legislative analyst of the six departments mentioned in the report. the mta is the only one disagrees with some of the

findings. >> thank you for letting us comment on this review. first, let me say there are a lot of areas where you could find fault with the mta, but we don't think this is one of the areas -- our revenues have gone up 5000%. we have over 10,000 to 15,000 had spaces. some of the -- dead is site visits are not feasible given our resource constraints, so we have not agreed with some of the commons because we do not believe the best practice for an advertising type like we do, with some ads and faces, we have embedded all the requirements in to the contract so that by

making sure the contract is complying with our advertising policy, which we believe is very strong, and all the other restrictions, we have significant liquidated damages should and our contract has been requested by multiple systems as the best practices, so we feel very confident our contracts -- i would say internationally as well, in terms of the areas of maximizing revenues, you know advertising is one of the areas we are absolutely focused on because if we don't maximize advertising revenues, that means community services and we actively monitor the advertising. unfortunately, the advertising market is not as strong as you would like to be, what we had

in 2011 exceeded revenues by over 15 million and both of our contractors are succeeding and every dollar above, we get 65%, so we have a strong revenue contract. i would say as an overarching comment, unless you want me to go through point by point, we feel strongly about our advertising effort. supervisor campos: i appreciate the perspective and i think a lot of effort has been made, but i think the effort raised in the report, it makes one wonder whether you are in fact maximizing revenues. let me give you an example. one of the things the report says is that the mta does not have information on available advertising locations compared to actual advertising locations.

they're saying you do not have the information of what you could potentially use as advertising in terms of locations. you only have information on the actual. can you respond to that? >> we know exactly the number of ads bases and sites available on our buses and transit shelters. we know the entire universe of sites that are available and we've asked contractors to provide us with what they actually advertise on so we know the difference of what they're not advertising on. second, our mag is so high that even the advertisements on those bases -- we would not hit mag, so those are the two points i would make. >> -- supervisor campos: wouldn't you want to know what the contractor believes are actual advertisments sites so you would have a way of comparing of what they think is a potential advertising site relative to what you think --

>> de give us every month information by type of ad, the location of the ad, the location, so let's say clear channel -- we have 1100 shelters with free ad sites on each shelter. we know there are 3300 possible ads basis. we know clear channel will be selling 10,000 spaces to yahoo! at these locations. we have these that are free and so we know for the next three months in advance who is selling, the buyer, the site, what is empty and what ever is anti automatically becomes public-service ads. we monitor that because -- automatic wet -- what ever is empty, automatically becomes public service ads. i'm not sure we communicated

that effectively to the budget analyst, but we feel comfortable we know how many ads are sold and where they are and who is buying them. supervisor campos: it seems like there is a disconnect in terms of the information was provided because that's different than what the report says. something else the report says is you have not audited the contracts. have you audited the contracts? >> when they did this review, they did this for fiscal year 2009 and 2010. both contracts had just officially been initiated. we are in the process of auditing the second year now. having said that, every year during our fiscal year-end audit, the outside auditors that control the audits go to our contractors and ask them to verify the revenues and audit the revenues to make sure what we are reporting in our books is what the contractor has indicated, so we have an ongoing

process and we are initiating are already full process and the contracts are now over one year old. >> i think it is good you are conducting the audit. one of the things the report says is that the agreement specifies every year a certified public accounting firm may conduct a verification of advertising sales reported by tighten, but the mta indicated that was not cost-effective and wonder if you can comment on that? >> one contract says every two years we're going to do that. this year, we have an audit firm actually doing the process. we thought a two-year review would be good on that particular area because the length of the contract is a 20-year contract

and the cost of doing an annual contract which could be $100,000 to $200,000 was not very cost- effective, so we have a biannual review process. supervisor campos: something else it says is that clear channel has are required it to maintain the number of transit shelters and no one is performing routine side checks to make sure the shelters and kiosks are in good condition. >> supervisors, there are 1100 transit shelters that were actually part of the contract. we have had to take five down at the request of the committee and board of supervisors. that is what the budget analyst is recommending is that we are a little bit below that 1100 because of the removal of some of the shelters, particularly in the tenderloin area. having said that, there is a website that was part of the

contract where we know exactly the maintenance of every shelter every day. for us to have to visit every shelter every day, four and t a staff, we don't have that as a normal -- for a mta staff, we don't have that as a normal process. our staff are out there on a regular basis and we also have the website that tells us on every shelter when it was maintained. you can go to the web site, look at the shelter on the corner and from of city hall, we know the maintenance shelter, when they picked everything at and what time the person was there, what they found, so we believe our review is pretty strong. we also have a staff member who does do random reviews, but not on a regular basis. supervisor campos: i would say having that information is great and helpful, but i don't think that can replace an actual,

physical inspection. i think this is a point that i hope the mta takes into consideration. while it is difficult and challenging for sfmta staff to check these sites on a daily basis, i don't think anyone is saying that's what needs to happen. the public does have to go to these sites on a daily basis and it seems to me there has to be a way in which you can physically verify that the information you have in your database is actually correct because the fact is data is reliable to a certain extent because sometimes the wrong data is input into the system, but i think a routine physical inspection would be an appropriate consideration. >> we will look at that in terms of our prioritization and budget

process, we will put that into the mix of request. supervisor campos: in terms of information about annual revenue data from the contractor, can you comment on that? do you have that information? >> absolutely. not only do we have that, but we meet with the quarterly revenues, the auditors reviewing it, and we also have the revenues reviewed by the city's auditors. on the revenue side, we feel very comfortable we are getting -- our mags are so high that some of our contractors are making a loss because they have to pay us some much. supervisor campos: with respect to bart, it says you're not currently requiring bart provide ionization of advertising sales at -- ionization of revenues. what is actually paid is inconsistent with the revenue sharing agreement.

>> what we do have from bart is a monthly spreadsheet, a calculation of how they came up with their number. we have asked for bart to find out if a audit the contract and what they are reporting to us is accurate. they do not actually audit their contracts, so they do they gear and review that we do. based on the information we get, our auditor verifies that and other than that, i'm not sure what more we could do with bart in terms of requesting additional information, given their contract with the vendor does not require that level of information. supervisor campos: i would think maybe we could work with our to make sure there is a requirement for that information from the vendor because to the extent we are relying on a percentage of those proceeds and there is no guarantee that those revenues

are being maximized, i think we have an interesting and we could have that conversation was part to make sure there is a way of ensuring the highest revenue possible, not only for us but for bart itself. i would encourage you to have that discussion. >> certainly. supervisor campos: with respect to graffiti, there is a point about coordinating efforts that are better and more effective. do you have any comments? >> i wish we could address graffiti better as a city. when our director of operations came on board initially, he did not like any advertisements. now he's a fan of ads because it pushes the burden of graffiti cleanup to our contractors and so, we have a constant challenge of graffiti on our buses and the contractor does a much better job of graffiti cleanup and our

forces are able to do. to the extent we can get an asset in a space, that helps with our internal graffiti cleanup. we have a dedicated group of people who do nothing but graffiti cleanup. we spend almost $50 million a year on graffiti cleanup. supervisor campos: the final question i have is that there seems to be an implication here that there is not of coordination between the folks at mta who manage the contracts and the folks working on graffiti prevention. that seems to be the suggestion. i'm wondering if you can respond to that. >> i'm not sure i can be very conversant about, but what happens every night when the buses come into the arts, the advertising contractor is there a long with the cleanup crews. they are