>> well, i don't know how reliable it is. i have not actually seen one. i've seen pictures, but i have not actually gone to the site to test whether or not the machines are very adequate. i also don't know how expensive they are. >> thanks. >> is there any public comment on this item? seeing none, mr. fratelli, you have three more minutes of rebuttal, if you care to speak again. >> i do have a gentleman who actually did sell to the young lady. he's right behind me. the case, what the police officer did right, saying that age was asked and the young lady did answer the question, saying that she was 16, that is incorrect. that is incorrect. and commissioner, your question

was, how efficient is the register now, since we have changed all the registers to mandatory i.d. swiping. it is 100%. moving forward, that all of the registers will be changed with the new program. without the identification, california driver's license, it will not activate or the sale will not be made without the actual driver's license. and the only way they will be able to make it -- they have to swipe the driver's license, and on that driver's license, that date of birth will be registered on the p.u.s. system. so if there's a receipt being asked, the last two digits of your date of birth will be printed now. so we have taken these precautions after all this. >> i have some questions, but i wanted to allow you to finish your comments during rebuttal, if you have re comments. >> i do have a clerk here who can also testify to say that age was not given.

that's pretty much it. >> so the cash registers -- you took out your old cash registers and you put in the new ones that require the swiping of the driver's license? >> no. it's still the same cash register, same p.u.s. system, but there's a new software system installed. it will limit to purchase alcohol and tobacco both based on the age. it automatically calculates. so, again, you have to understand we have clerks -- these are not college-graduate clerks. these clerks need help to come up in life, and instead of being out on the street i'm coaching and guiding them to make a better life. to make their life easier instead of guessing, whether it's a person over 18, instead of guessing that whole process, all they have to do is swipe the driver's license. and the driver's license will automatically tell the register or the p.u.s. system and say,

yes, if they are old enough to purchase for tobacco or alcohol. if the person is under age, it will not go through the transaction. it will reject the transaction. >> do you have signs up in your shop that show -- >> yes, we do. >> the signs i've seen show the year. if it's such and such a year, then the person is too young. >> i agree. yes, we do have those signs as well. >> ok. and we do have specific companies that actually does this on a monthly basis, just to come and do a secret shopping to make sure that we do follow tross procedures. and it's different days, different hours i'm based on different hours. >> ok. mr. patel, i guess i'm struggling with that most story owners come in, and the clerk has made an error in calculating the years on the i.d. >> sure. >> it seems here there was no i.d. even checked. walk me through what the clerk told you what happened.

>> the clerk -- i requested the clerk what happened, and his response was he asked the young lady, are you old enough to purchase this. again, with the tobacco, in his eyes the young lady looked like she was over 18. and he askedand she nodded her . she just looked down. she indicated to him that she was over a team. -- over 18. >> did you say you brought your clerk here? >> i do have him. the same individual. commissioner peterson: do you mind if he comes up? >> absolutely not. >> this lady came to the store to purchase cigarettes. i asked her if she was old enough to buy a cigarette.

she did not answer the question. she just put her head down. i made the purchase. commissioner peterson: did you ever ask for identification? >> i did not ask that. commissioner peterson: why not? >> i even told her, the decoy, that she did not answer my question. commissioner peterson: thank you. president goh: i have a question for mr. patel. you are 18th and noe. isn't that three blocks from mission high school? >> it is four blocks. vice president garcia: in your papers, you have what is called

a product movement analysis. how is that generated? >> that is based from our ipo's system -- our pos system, whether it is alcohol, confectionery. vice president garcia: it is software you have that generates these figures? you did not reproduce these figures free hand? >> absolutely not. vice president garcia: you mentioned the fine for first sale of up a whole was $1,500. i think it -- of alcohol was $1,500. i think it is $250. based on the figures you presented, did you extract from those figures what the finance that you will pay? >> i did not. i was going to leave that in your hands. vice president garcia: how would you go about doing that?

let us say your profit is -- >> it is 27%, 26%. >> that is all right. it shows the gross product of percentage -- the gross product percentage. it is going to beat 5/6 of that. if you extend those figures, based upon sales of $38,000 -- >> i am sorry? vice president garcia: what are your monthly sales? >> i believe it was $35,000. vice president garcia: you have for this month 38,000. >> it does vary month to month. >> if you -- vice president garcia: if you do a monthly average, it works out to be

$26,000. if you extend the monthly percentage -- >> 30% of that? i am probably looking at about $8,000. vice president garcia: $8,250. that is what you're fine is tantamount to, relative to your sales and based on your gross profit percentage. i just want to leave that hanging. >> can i answer your question? >> i do not know that i have a question. >> if it is a 25 day suspension, i still have to pay for the loss of revenue, which averages. part of the franchise agreement is based on 50/50 of the profits, not net profits, but gross profit. even if it is a 75 day

suspension. i am obligated to pay them that money. >> that does not make sense. you said there would be a loss of revenue to the city. you would have to have an assumption that everybody who bought cigarettes from you would not buy cigarettes for that 25 days. that is not loss of revenue. that is not a reasonable argument. but how can you paper profit you do not get? what profits do you have to share? >> based on the past 12 months of numbers generated for that category. whatever the gross profit was, the average growth -- average gross process -- profits, i still have to pay 7-eleven their share. i do have a representative here from 711. vice president garcia: if in

2010, you sold $20,000, and their profit was 50%, and you paid them $5,000, the following year you owe them $5,000? >> for the current 12 months, that is correct. whatever the days i am suspended for, whatever the loss of revenue that has generated for them, and still have to pay them. that is correct. vice president garcia: i guess that would be a doubling of the fine. ok. >> dr. ogi, you have a rebuttal. >> i do not have any reason to doubt the police services that went to the site with the minor in terms of what transpired.

i am glad the appellant has not denied the fact that they did sell cigarettes to minors. it is strange the did not even ask for the id. the way he was told, the clerk was told that the minor was not 18. he went ahead to sell the cigarette. i think they should take responsibility for the action of their agent. i am going to respectfully ask the court to deny the appeal until probably 25 days have closed. >> commissioners, the matter is submitted. vice president garcia: i am tired of hearing myself might

the same argument over and over again. ever since this ceased to be a police operation and became department of public health, i think department of public health for some reason has blinders on when it comes to the economic effect of the penalties that are assessing on these particular businesses. i think if the facts as presented were accurate, the police department made a mistake, in that the decoy should have said i am not of age. it is not a lie of commission, but a lot of omission. but beyond that, i hope it resonates somewhere in the department of public health but the actual fine is to this particular business. even if we were to have that -- even it were to cut that in

half, or a quarter, and decide that based on the number of years this gentleman has been in business, the fact that he has 7-eleven doing their own checks because he is a franchisee and there remain a partner of his, based upon the fact that he is going to the expense of hiring beverly services inc. in order to be more diligent about not selling tobacco to minors -- granted, the court should have asked for her id. but there are times when they do that and make a mistake. there is an agency issue. it is still very difficult to think somebody deserves a fine of $8,250 when they are very conscientious about trying not to sell tobacco to minors. at $8,250, compared to what

happens during the alcohol and beverage control if you say -- if you sell alcohol -- maybe that is not high enough. that could be a reasonable argument to make. but relative to what goes on in tobacco and the fact that you were supposed to be 21 in order to buy alcohol, relative to the number of deaths that happen on the highway because of alcohol -- granted, there are serious problems with smoking. i do not think there is anybody in the world who thinks it is a wise idea to provide a smoke to the individual under a team. but to find an individual the first time a $250 at the least is totally, totally unreasonable. -- $8,250 at the least it is totally, totally unreasonable.

commissioner hwang: i am a bit unsympathetic, given the business is located so close to a school. we have heard different types of cases come forward where clerks have asked for identification. that is a bare minimum standard for me, and that was not met here. my inclination is to uphold the department. commissioner fung: the question has been asked a number of times, purely on the economic side. it is perhaps an aspect of it, but only one aspect as compared to several of the other issues we looked at in these particular cases. it is interesting, the proportions of these stories.

it appears that most of the stories that come in front of us for these particular cases of selling to minors are not grocery type stores. they deal in these types of products that are a little higher margin. that aside, besides the interest in the economic model presented , it is the fact that this will be the first time the will not support the appellant on smoking case, and purely for the reason that there was no request made. commissioner peterson: initially, reading the brief, i thought 25 days was perhaps an

inconsistent penalty for a first-time offender. but as i pointed out in my remarks, i think this is the first time where i have heard a clerk not ask for the identification. mr. patel seems a very specific -- a very sophisticated business person, as well as 7-eleven, which is a well-healed company. it is unfortunate the franchise agreement is written as such. there is almost something blase about of holding these rules. i would support the proposal of the department. president goh: i do not have anything to add. commissioner peterson: i would move to uphold the department. >> do you want to base that on a finding that the sale to the

minor occurred and the court did not ask for identification? >> if you could call the roll on that, please. >> the motion is from commissioner hwang to uphold the 25 days suspension on the basis the sale was made to a minor and id was not requested. commissioner fung: aye. president goh: aye. vice president garcia: no. commissioner peterson: aye. >> the boat is 4-1. the 25 day suspension is upheld on that basis. >> thank you. call the next item, which is

kalesilassie bebresilassie -- gebresilassie versus the municipal transportation agency appealing the denial of a taxicab medallion. the matter was continued so it could be considered when all five board members are present. mr. alexander, you will have three minutes. >> three minutes? madam president, mr. vice president, when we were here last, the question was, if given the opportunity to do so, would we be able to show he complied with the current driving

requirement for consecutive years. we did not know it would take this long. when we were here in april, he was prepared to show that he can and has complied. he has continued to be driving, while we were waiting for this hearing. the mta does not dispute that. he has met the requirement. he is a full time driver in every sense of the world. this has now been pending since 2008. his record is spotless. he has had other apparel people help him. he has complied with every purpose and regulation that has ever been in place. the most fundamental purpose of all regulation -- it is clear the public will be well served if he is admitted to the ranks

of medallion holders. conversely, no conceivable public purpose will be served if he is further delayed, denied, or made to produce further proof that he is a driver, fully qualified to be a medallion holder. all practical purposes, if he is denied, he will not have another chance. one of his last act, when we were here in december -- the taxi commission expressed the m.t.a. would find another way to resolve this. that way is now at hand. the mta does not appear to have serious opposition to the board taking action, reversing the decision, and awarding the medallion. you have the power to do it. i urge you to please do it, because only good can come of it. vice president garcia: what is stipulated to buy a taxi for your client?

>> from 2008 through april 2011. vice president garcia: so he has already met 11 even though we are only -- >> yes. he has made it in spades. he is still out there driving. he had made it by april. vice president garcia: thank you. >> mr. marie? -- murray? >> jarvis murray, taxi services. what mr. alexander has said is basically correct. the mta position is that when he came up for his medallion in 2008, he did not qualify.

there has been no evidence he qualified during that time. at that time, he needed to drive three out of four bang years to show he qualified. -- three of four years to show the qualified. he did not. if the question is whether he qualifies if he were to come up today, as mr. alexander stated, he would qualify. there is no debate he has given since 2008. in to the five and 2006, he did not drive enough hours. in 2007, he was not in the country and did not drive. 2008 was the only year he presented at that time where it could be shown he had badly driven. for the mta, the issue for us -- if you would like to choose that he is eligible as of today, that is one story.

at the time of his application, that is a different issue. we are not prepared to unilaterally allow the wait time. if you choose to do so, the mta will not question that decision. commissioner fung: your last brief did not rehash 2008. you are in concurrence with the appellant that in 2008 he grove -- he drove the requisite number of shifts. >> it was said by the previous hearing officer that it satisfied requirements. commissioner fung: in 2010, the appellant's brief indicates he did not drive the requisite number of shifts, but you indicate he did. you stand by your numbers?

>> in 2008? commissioner fung: 2010. >> i believe he had turned into us -- we have him at 890 hours. we stand by those numbers. commissioner fung: his brief indicates it was less than that. >> i do not recall the numbers mr. alexander dave. commissioner fung: but according to your records, you stand by those numbers. >> correct. >> thank you. is there public comment on this item? seeing none, the matter is submitted. vice president garcia: i personally find it reasonable to apply the current transportation code to this particular case. there were interesting things

presented to us in the papers having to do with the original intention of proper k, written by then-supervisor copp. moseley had to do with trying to eliminate medallions from passing to the hands of people who were not drivers. i think the account has demonstrated he is an actual driver. he is making his living as a taxicab driver and has tried to meet the requirements. were we to apply it to our transportation code, he certainly has met it. that is in terms of the driving requirement. i would personally want the mta to grant it. commissioner fung: it is interesting because this case has dragged on for a while.

there was some incentive in order to be able to -- that said, i would support it. i would also state that as far as i am concerned, for mta purposes, perhaps, in my own thinking, this is not as acceptable to me in the future to put something drag out until someone conforms. commissioner peterson: i do not have anything different to say, except the fact that he is trying to conform in the and to show he has a certain understanding of what is required. that would help my decision. also that we are in safe territory to apply the current transportation.

i do not think i am clear on what mta's position is. >> our position is that when he became eligible for his medallion, he did not qualify to receive one. commissioner hwang: the m.t.a. position is to deny the medallion? your position as the agency would be for this board to apply the standard at the time he applied? >> correct. vice president garcia: that is not exactly what you said the first time you spoke to us, is it? >> i am sorry? you mean today? vice president garcia: just moments ago. >> that is what i said. i said our opinion is that when

he became eligible for a medallion in the fall of 2008, when his application on the wait list came up, he was ineligible. vice president garcia: do not add that were the board to apply the current transportation code, the m.t.a. would not be opposed? >> i did add that. commissioner peterson: thank you for that clarification. commissioner hwang: on principle, i do oppose using the standard of the day, simply because there is an incredible incentive to get driving quickly, when the whole idea of the standard that was implemented prior to the current was to allow full time -- existing full-time driving workforce taxi drivers to get the medallion. now, that is benefit from the privilege to the city. notwitnd