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 putting up -- they're cleaning up the graffiti in the non-add spaces and they're working together on the buses at the same time on the shift. i'm not clear as to whether there is an argument as to who should be cleaning up that individual piece of the graffiti, but they are working to clean up the bus at the same time. it is unclear what else we can do there. >supervisor campos: colleagues, and the other questions?

>> we are not going to go through all of the differences. most of those are covered in our transmittal letter, said the have any specific questions, we will respond. none of the information is new that was just presented right now. i do want to say on a couple of the points, one is on the monitoring of the contracts in terms of available advertising space and what actually gets sold, our report we believe is quite accurate. with clear channel, which advertises on the transit shelters, there was a high variability in the amount sold every month we thought was really important. to work with clear channel and make sure the maximum number of spaces are sold. with tight and, they do provide -- with tighten, they do provide the information monthly.

but they do not compare sales to available advertising space. we maintained mta needs to make sure they're making all possible efforts in the space. the other one is on the issue of the minimum number of shelters and kiosks that are required. this is problematic because the contract sets a minimum that is not achieved. mta gave multiple reasons why this was not, but the bottom line is part of the compensation and value of the contract is maintaining these shelters and kiosks and they are not maintained at that number. there may be all sorts of community reasons or planning department reasons, but we did look in and permits had not been pulled. we did not feel there was an active case there. on the audit -- some of these we don't actually have a major disagreement.

on the issue of the audit, the response, i don't believe they told us they're planning to do the audits every two years. that may very well fill the spirit of the recommendation. supervisor campos: a final question -- with respect to the number of shelters, there is a minimum requirement in the contract and we are not meeting that requirement, i think we should either modify the contract or, it seems to me, we have to make sure the letter and spirit of the agreement is being applied. >> certainly, a supervisor. to comment on that. we definitely want shelters up for the writers where we believe it is inadequate. -- shelters up for the riders. those shelters have been

removed and the communities have asked to remove shelters. having said that, our mag is so high that where we put our shoulders up are dependent on the service needs of our r iders or the system. our revenues are so high that we don't think we should put up a shelter just to put up a shelter unless the community wants it. there are some new shelter locations and we are actively working with dpw on the new shelters which is taking much more time than we thought. we should be seeing some new shelters going up across the city soon once we resolve the power and permitting issues. supervisor campos: i appreciate that, but if that is the case, if your position in terms of what is needed is different from what is outlined in the contract, the contract should reflect that. >> i don't think the contract

says -- maybe i am wrong -- i can't go back and look at that whether there is a dollar requirement or shelter requirement. supervisor campos: finally, what i would say to m theta, i'm glad there is specific responses but i feel there is room for improvement. there has been a lot of talk about the need to improve service and the need for additional resources to make that happen. if we can make improvements and changes around this issue, you are talking about a significant amount of money that could be added to the system which could in turn helped with the service provided, so i hope they recommendations and findings are take into consideration and, to the extent improvements can be made, that those improvements are made. why don't we open it up to

public comment? any member of the public would like to speak, you each have three minutes. >> good morning, supervisors. i've lived in san francisco for 59 years. i would like to thank the budget and legislative analyst for this report. as usual, they give us the real picture. my interpretation is that it is mainly bad news. is it a fact that the ex head of public works is now the current head of mta? you can make a decision whether that is a good move for bad, but based on this report, one has to ask the question of whether this is good or not. at least the question is being asked. second, i found it interesting, the reference to the city

administrator's office, why the contract was being closely watched their. i would like to pose the question as a private citizen, was a recent city administrator during such a good job as being claimed publicly? because it seems to me like today's report indicates that was an area where there was not any monitoring, obviously, to the detriment of the city's income. thirdly, i would like to ask question, if the city is not doing a very good job here, maybe we should fund more audits on a regular basis so we can get more reports like this and find out why the city has so much alleged waste and incompetence and try to get that fixed.

like a supervisor farrell says, $5 million is $5 million. if we can find it here or there are chances of finding it somewhere else like public health and general hospital is very good. as a matter of record, i would like to point out that even the president of the united states approved enthusiastically that government assistance to cylin dra, it is a matter of fact that the government paid a visit to them this morning. it does not mean those projects are adequate or even good for the economy. what i would recommend is that this committee called the audit and oversight committee, increase its activity to make sure that we do not have more

instances of cylindra coming up, because realistically in san francisco, every dollar lost hurts the poor that need it. supervisor campos: thank you very much. anybody else would like to speak? seeing none, public comment is closed. colleagues, would it be ok to continue this? we have a motion by supervisor farrell. we can take that without question. clerk, you can call the next item. >> item number two, ordinance amended the san francisco administrative code. supervisor campos: thank you very much. this is an item that has been introduced by both myself and supervisor farrell. i want to thank supervisor farrell for his work on this item. what it does is that it addresses an issue that has come before this committee a number of times, as well as the entire

board, and that is the issue of overtime. we know that in the last fiscal year, the amount of overtime that departments went above that which was budgeted, which was about $40 million, which means that city departments spend more than $40 million in overtime that was actually budgeted by the board of supervisors and the mayor. right now, there is no process in place that requires that any amount of expenditures that goes above the budget be approved by the board of supervisors. this legislation would require that approval and would create that process. i want to thank the controller's office for their good work in helping us put this item together. from our perspective, this is a good government, best practices, a piece of legislation and makes a lot of sense. we have a budget process in place that requires presentation

by the mayor to the board and approval by the board of supervisors. we want to make sure that that process is applied to the issue of overtime. supervisor farrell, i do not know if you want to add anything to that. i will turn it over to the controller's office. >> good morning. monique from the controller's office. on a monthly basis and semi- annually as well, the comptroller's office provides reports to the board of supervisors as well as the department of the actual use of overtime compared to the budget. the board of supervisors did pass legislation this week also related to the maximum amount of overtime hours any employee can work. this companion measure would limit the overtime to how much is a budget and would require a real appropriation to change the

amount or to increase it. because this legislation was pending before the committee during the budget process, we took a hard look at the actual overtime in each of these departments and recommended an amount that is consistent with the prior year's spending. we're hoping that the apartments will very carefully monitor their overtime and not exceed those amounts. and if they are on a pattern to over-spend, we will certainly be monitoring it and advise those departments to come to this committee. one of the things that we have proposed that the overtime appropriation legislation pertain to annual operating funds, which is clearly the vast majority of all the funds in the city and county. we do have capital funds or special funds that are sometimes used for overtime.

currently, our reporting capabilities do not allow us to separate out that over time, budget vs actual, and i think that if we limited at this to the annual operating funds, we would achieve 96% to 97% of all of the dollars in most of the cases. >> just a couple of points. this legislation applies to the departments that spend the most in overtime, and that would include the airport, the office of emergency management, the fire department, police department, department of public health, public utilities commission, department of public works, recreation and park department, and the sheriff's department. it does not include the sfmta, because, legally, we, as a

board, do not have the authority to approve specific budget items. we're limited to approving yes or no, their overall budget of an agency. >> that is correct, mr. chairman, however, we do it -- include the mta in all of the reports. supervisor campos: which is the third item on the agenda, urging the mta to take appropriate steps, and we will get to that shortly. colleagues, any comments or questions? with respect to the issue of capital projects, my understanding is that the amount of money in overtime that is expended on capital projects is about 7% or 4%, 6%, depending on the fiscal year. >> correct.

supervisor campos: i do not have a problem with that approach in terms of going forward and excluding capital projects, to the extent that we are talking about a smaller percentage of the amount of overtime. but i do think it is important for us to deal with the issue of overtime when it comes to capital projects. maybe there is a different process that we should put in place, or at least a separate discussion. >> we can begin to report on the actual overtime within those continuing funds. often it is more efficient and cost-effective for departments to use overtime, rather than hire additional staff to complete a capital project that may take just a few months. in many instances, the overtime is preferred, rather than to hire additional staff. but we can report the dollar amount to you and work with you over the course of the next

number of months if you like to make some changes to the appropriation methodology for those funds. supervisor campos: ok, thank you very much. why don't we open it up to public comment? if any member of the public would like to speak, please come forward. >> good morning, supervisors. my name is douglas. i would like to thank the chief sponsors for this item. i think it is long overdue. in fact, when i think about it sitting here, i am asking myself why two so-called experienced fiscal watchdogs on the board have not come up with this idea sooner? this current item, so i am wondering about that. secondly, i think this is something that is long overdue. basically, if you ask a private business how they are going to

control over time, they have a simple answer. the call on the employee. they tell them this is a need to be done. is it the constraints. these are the time requirements. we would like you to do good job. and if you do not do a good job, then we will find someone else who can do a good job. i think the very real excuse to keep hearing around city hall that it is cheaper to pay overtime then bring in new employees is a false idea. did it ever occur to anyone that may be those new employees will be better employees than the employees you currently have? because if you take that point of view and follow successful companies, like apple and google, companies like that do not tolerate or even keep employees that cannot meet budgets and goals. i think is pretty simple. if you ask a doughnut shop

operator how he controls over time, he is basically going to say either the job gets done within the goals and requirements or else we're going to find much to do a better job than the people we have now. so maybe, maybe, you should ask steve jobs to volunteer for the city, have him sit down and look at all these operations and say, maybe you can come up with a few suggestions for the benefit of the city of san francisco. realistically, i do not think it takes a lot to figure out if you cannot do the job within the restraints, maybe you should not have that job. what is the problem with bringing in outsiders from the city government? is it a fear that maybe those outsiders are better workers than most of the city workers we have now? [bell chimes]

is a politically correct to ask the question that maybe we should be hiring based on merit other than so-called agenda connections, which always gets us stuck in city hall but nothing gets done about it. what is done with hiring people that can get the job done on time? thank you. supervisor campos: thank you very much. is there any other member of the public that would like to speak? seeing none, public comment is closed. colleagues, we had the legislation before us. the question has been raised on making sure that the legislation reflects that we are talking about operating an operating budget. is there a motion to make that change? >> motion to amend. >supervisor campos: motion by supervisor farrell. for purposes of the public and the folks watching this hearing, it would be adding the words

with an annual operating fundswi operatingthin annual operating funds." it would read, the annual a pretentiousness shall contain a separate appropriation within an annual operating funds for overtime. i am concerning with the city attorney and the controllers that that is the language that would be added. >> correct. supervisor campos: we take the motion without objection. and now on the underlying legislation, as amended. we have a motion by supervisor farrell. we can take that without objection. thank you very much. again, thank you to the controller's office, to lead to the city attorney. thank you to supervisor farrell and his staff. thank you to sheila and my staff for working on this. and thank you to president chiu for your support. madam clerk, call item 3. >> item number 3, resolution

encouraging the san francisco municipal transportation agency to develop a plan to manage overtime expenditures in 2011- 2012 and subsequent fiscal years. supervisor campos: first, a quick question on item two, and that would be a motion to move forward with the recommendation. that is not going as a committee report. item three, please. let me say that, with respect to item 3, this is an item related to item two, as was just noted. we on the board of supervisors do not have direct oversight of line-item budgets within the san francisco municipal transportation agency, which is why we are accompanying the legislation with this resolution that is urging the sfmta to take all necessary steps to address the issue of overtime. as has been noted before,