when most of these projects or many were not only behind, but also were above the initial cost estimate. and in terms of the level of oversight that the board provided, how does that compare to what is best practice? >> if the term used was on track -- the term used was on track. that is the approved budget, not the baseline budget. it is the baseline budget that should be kept. the base line figures are in the reports, but they are overshadowed by the traffic light. if they are going to do a traffic light, then they ought to do it with criteria based on the baseline, not the approved. supervisor campos: just a final

question, and we look forward to having this discussion more in depth and the committee, but in terms of the number of days that some of these projects are delayed, a key construction projects are on average 475 days behind schedule -- how does that compare to what is happening elsewhere in other agencies in this industry? >> well, clients and other agencies that have used the practices that are recommended throughout the report, particularly on page 7 will have fewer overruns, and maybe less of a need for that level of contingency. in other words, they may be able to define the project will be enough so they can do it for a

15% contingency rather than 30%. supervisor campos: related to that, you noticed there was no -- noted there was no risk analysis. is that typical as well? >> the project operations manual calls for risk analysis when there are risks there. in practice there are few, if any, risk analysis done on smaller projects. when in fact there is evidence by the overruns in bleakness, there are risks involved in the project. commissioner chiu: thank you. i want to thank commissioner campos and others for recommending we undergo this process.

i do not want to be labor any additional points. and i think the broad point i would like to make, and i think i like to hear mr. ruskin's comments on this is from my perspective, project management city-wide does not really seem to exist as a discipline. i recently as for a budget analyst report that showed half of the major contracts in the city in recent years have seen change orders that did not go through scrutiny here at the board, that resulted in hundreds of millions of dollars in cost overruns. what we see here is part and parcel of that. it seems not only do not have procedures in place to hold accountability on what we say we're going to spend on a particular project and when you're born to get it done, but there does not seem to be a counter of accountability -- a culture of accountability. i think there is a broader

discussion we need to have city- wide about how we really and truly tackle this such that when we say something is going to cost a certain amount of money and be done by a certain date, it gets done. we're not born to solve that here. part of what i am looking for from the audit team is the specific best practices and how this gets done in other places, because i am not convinced we have good solutions with in city government here in san francisco. -- we're not going to solve that here. supervisor campos: if we want to get the opportunity for the director of transportation to come forward. i want to thank mr. reiskin and his staff. the mta has worked very closely with all audit team, and we appreciate the openness. with that i will turn it over to mr. wristband here yet i think

the timing works pretty well because it is just taking over this agency. -- i will turn it over to mr. reiskin. >> thank you. good afternoon. thank you for giving us the opportunity to be here, and think yoank you, commissioner c, for your leadership and coming this process in place. and i would echo your sentiments us the new guy to walk through the door and handed me documentation for how to improve, it is a great thing. i would be lying if i say in departments we love when folks come in and audit us. often the result can be very helpful, and i think that was the case here. i first day on the job i sat

down and one of the things we discussed was the important of mta's ability to deliver project on time and on budget. -- my first day on the job i sat down and one of the things we discussed was the importance of mta's ability to deliver projects on time and on budget. i came into this job not being an expert in transit or transportation, but with significant and it relevant experience in delivery of capital projects and managing a capital program, and it was a very strong focus of mine to do exactly what commissioner chiu is talking about, which is to bring a culture of accountability to the capital projects, and i had the pleasure of joining many of you at

various groundbreakings and ribbon cuttings over the years, and i think we have moved up the ball significantly forward as a city in terms of how we deliver capital projects, and i would argue the success at the ballot a week ago today is to some extent a manifestation of the public's confidence in the ability to deliver what we say we're going to do. it was not that long ago that was not the case, and i think maybe some of what this all that has expose is what was all in the rest of the city not long ago where we would come in with a concept, perhaps not as well defined as it should have been come and put out some numbers in terms of cost, schedule, and we would significantly blow through those.

under the leadership of current boards and mayor's we have really shifted to investing much more in free development work, so that we can better understand what our cost of schedules will be. i think that is part of the essence of what we're talking about here. i worked hard at dpw to put systems in place, just as the mta is in the process of doing now to help support the professional inconsistent management delivery of capital projects, as well as documented all of the procedures, which the mta has already done in terms of how capital projects are delivered, so i think we would probably characterize some of the findings differently, and some of what are considered to be cost overruns are really an issue of the point in time in which the budget is set.

the recommendations contained from this audit are good ones, and we're grateful for them, and i would be happy to discuss further at the plant in program committee. i do have a whole presentation that if you want i can walk through the highlights of, or if you would rather defer that for the committee, we can do that as well and can just take questions at this point. at this point i will pause and see what the will of the body is in terms of proceeding. supervisor mirkarimi: i believe we of questions and comments. supervisor elsbernd: i see in the opening slide that you have agreed or concurred with 17 of the 19, put you partially concurred with two. can you tell me what the recommendations are that you only partially concur with?

>> maybe. i had to refresh my memory. and one of the recommendations was that we organize around as the class's and asset teams. for example, people that are doing rail work, whether way -- whether they are the engineers, inspectors, they are working as a unit so they develop expertise so they have the ability to work together and share information, and there is consistency as we do real projects as a the example. -- rail projects as an example.

one of the things we did was change from an organization where we have the architect in one place, engineers and one place, and construction managers and one place and oriented along of building division and infrastructure division. very much along the lines of organizing and asset management team. one of the differences between the agencies is a much larger and sourced model -- insourced model. the capital programs division within the mta is very small. i think we have a total of five resident engineers who do construction management. for us to break down into different asset classis would be challenging. we need the flexibility -- we do not have been of engineers,

construction managers, project managers where we can take folks and dedicate them to work in a team. we necessarily therefore need to maintain flexibility to have an engineer work one day on a building project and the next day on infrastructure projects. we do not have the luxury of the numbers to organize in a strict asset management way. we are doing that to some extent. shortly before i joined the fleet engineering group was moved in to work more closely with operations with a fleet maintenance folks are. now from project management to engineering to maintenance, they are working somewhat like an asset team. our sustainable streets division, we are doing that somewhat as well. and we do not have, i do not think, the staffing flexibility to be able to do that across the board. we are, however, looking at

somewhat more of a matrixed organization so that we will have at least asset leadership with designated -- designated in our new capital planning process. we will have 16 different glasses of asset management. each one of them has the lead person assigned. some of the benefits we would get from the recommendation we will get from what we're doing. it would be great if we could. and i think we are at least implementing the spirit of the recommendation. the other one, with regard to partial concurrence, was something along the lines of the amount of time that our project managers spend it doing community outreach with regard

to the project. the recommendation was you should use public affairs for that and let the project managers manage the project. usually project managers are much more expensive than community are rich folks, so there is logic in terms of project funding for that. however, it has been my experience that particularly when you were working in the projects in the public right of way, we are very processed-heavy town, and there is a lot of opinions and a lot of festivities that we need to understand from community groups and stakeholders. if the project manager is the person that is one to be held accountable for addressing in meeting and understanding the community needs, i believe it is important that they make the time available to spend at engaging in go to community needs and understanding with the

community concerns are, because of some of the that person will be held accountable and delegate that function to a public relations staff person who was working off of fact sheaf -- of a fact sheet. i think it is an investment of time, even by senior management staff that is worth doing unnecessary. we will certainly look and make sure we are using those high- level staff resources widely, but that is the reason for the partial disagreement. supervisor mirkarimi: any other comments or questions? supervisor campos: i will make just a general comment, and we look forward to having this conversation more and that in committee. i think one of the things that

jumped out was the finding that if you do have a better management, and you assume a capital budget of 150 million for instance, that auditors estimate a savings of 73 5 million-$15 million -- 7.5 million-15 million. you are talking about significant savings that could be achieved if you have the project -- proper management of these projects. that is 150 million, which is smaller than the overall budget in terms of capital expenditures. i think it is important for us, given the amount of money involved in the millions of dollars that could be saved, that we address these issues, especially as we are faced with the fact that we do need to increase service. the fact that there are additional challenges in terms

of what the ridership use are. and before we start talking about increasing fares, i think it is completely appropriate for us to demonstrate to the public that we are doing the most with the money that we do have, and so i think that is one of the big challenges, because we are talking about pretty significant potential savings. >> thank you. a few points on that. the general premise that we need to demonstrate we are managing the agency well, a book on operating side and capital side before we start talking about asking anybody for more money i think is exactly right on. as a taxpayer, i want to see that from a transportation agency come into the extent we have recommendations here that will help us improve the management of our capital

programs, it is all the more impetus for us to implement these as quickly and as well as possible. we estimate our needs to fully get oliver assets into a state of good repair on the order of $500 million per year in terms of capital needs. to the extent we can manage projects better and make the resulting savings available to address more of the deferred and means that we have been building for generations, to make those dollars go for there is absolutely of goal of the agency. i will clarify that when we're talking about fixing the structural operating deficit, which is what some of what has been playing in the media in the past several days, we are really talking about operations side,

and not so much the capital side. it is a different kind of nut to crack. our capital budget is largely funded by the federal government, and what we would be seeking to do with any savings we achieve would be to get more of our assets into a state of good repair. and i guess what i would say as to the numbers in terms of how much could be saved, i will give you one example. the replacement project, which is currently under way, the agency started that as of rail replacement project at that intersection, and some of the initial community meetings when they went out to the neighborhoods got a lot of feedback in terms of non-rail improvements that would be good compliments to the project. that would achieve better principles in line with the better streets plan and policy

that has been approved by the board of supervisors. as a result, the project went from rail replacement to our real replacement pedestrian and bike safety and streets improvement project. that was one of the examples noted where the mta has exceeded the budget. the reason in that case, one major reason is because we added the scope, and we were able to find funds to meet safety issues and community needs. that increase scope are among the dollars are identified as potential savings. there are other examples where we have added scope to projects in response to stakeholder needs or additional condition assessments that are getting work done that is good work to be done, but that is characterized here as cost

overruns. i have no doubt with better management we can stretch our dollars further, but some of the percentages or dollar amounts that are implied from this report in terms of savings that we can just take through better management and use somewhere else would in fact pisco productions, so i just want to clarify that -- when in fact be scope reductions, so i just want to clarify that. some of the numbers and here do not clarify. the difference in the one instance is because of wheat added scope to meet other needs. -- becaseu wause we added scopeo meet other needs. supervisor mirkarimi: thank you.

what i would say is i think the numbers in the magnitude of the issue is i think what leads me to believe that based on the findings here that there is a lot of money to be saved. the 29 projects they have looked at, they were on average delayed by 592 days. that is a pretty significant number. even if it is a fraction of that, half of that would be significant. that is pretty significant. while we are talking about capital funding, that could also impact operational funding to the extent you're talking about going over budget. in any event, i want to thank you for being here and think the consultants for the presentation and my colleagues for their indulgence and look forward to having more and that discussions in committee. any other questions or comments? thank you to mta staff.

thank you to consultants who took lead in performance of it and transportation authority staff for their assistance and help facilitate this process and commissioner campos for your leadership here yen greatly appreciate it. this is not an action item, although it is. let's go ahead and take this with public comments first. public comment on this item, please. >> [inaudible] bob allen. i came from a meeting last week and a tree with fda commissionta commissioner, the f good repair for about an hour and how he encouraged at the kids to take a more active role,

so we're really pleased. you did not see the chamber packed, not because people do not want to go through the audit, but it is incumbent upon the advocate committee to discuss issues like the audit and how we put a better system on the streets. we will be working to do that over the coming weeks. i sat on the advisory committee for the transportation sustainability project, which is an effort to save $100 million in operations for the region each year. i want to commend the ta and the director for taking a similar tack to look at the fleet management and construction costs. we have maintained that the analysis on the capital programs for transit operators are really neglected in the whole piece of watchdog in and make sure we get better service, so we're really appreciative and want to work with you on this effort. to follow up on supervisor campos's point, we also know in

this room when we have significant cost overruns there is a tendency to pull from core operations that has an impact on the ability to put service on the street to implement programs that have broad support try to get our youth to have more accessible transit service, to put the additional revenue hours -- all of that isall of does its connected. we look forward to the next committee hearing, to hear from the advocates. we have seen clear guidance from the fta and the administrator. this is a big area of emphasis. i want to thank you for that. supervisor mirkarimi: thank you. any other public comment? step right up if anybody disasters. all right, public comment is closed. this is an informational item.

we will look forward to the continuing conversations in the plans and programs committee. we like what has been started. madam clerk, is there any other additional items? >> item 12, adjournment. supervisor mirkarimi: all right, are we good? happy thanksgiving, everybody. meeting is adjourned.

>> welcome to city hall. more importantly, welcome to our season of giving. i am pleased that i am joined by very important members of our great city family. i wanted to take this opportunity as we're coming closer to our first of many holidays, i wanted to send a message to all of our city and the rest of the bay area that there is easily going to be a

lot of bad news in our lives. it may be economics or jobs. in san francisco, we think differently. we believe in ourselves, we believe in our faiths. we take up the challenge that in times of bad news and economic hurt that we do things differently in our city. we bring our residents and visitors together closer. to declare this season of giving is important for us to send a different message as we're sensitive to messages that may not be about hope. i want to thank our religious leaders. i want to thank our wonderful social service providers, the intra-faith council, st. anthony's, and so many others, a

salvation army, the united way of the bay area. all of them are coming together including the food bank. we will be working hard together. i started this week with our department heads. in the next few months, as we hear about what is going on around us, in san francisco, we will depend a lot more on ourselves and on our own spirit of unity and sacrifice. i am not going anywhere for the holidays. i am staying right here in our city. i want to join with all the wonderful agencies who have come together. they have been here every season to help