be at at 11:00 a.m. we do call item number 3 in four, please? >> item number 3, a hearing on the controller's 6-mother retired refer this bill year 2011-2012, including the municipal transportation agency, fire, police, public health, and shares departments are greatly exceeding their budgeted over time including whether it's a vicious stabbing or other staffing issues our primary causes, and a discussion on whether hiring sufficient, permanent, and skilled staff is a smarter policy than spending millions of dollars on overtime to item four, hearing on the status of current and projected overtime costs for city departments. supervisor chu: thank you very much. both items were brought to us to hear the controller's succession of overtime report. one of the items, number three, is called by supervisor campos. item number four is called by me. of these items pertain to overtime, so we thought we would schedule and hear them both at

the same time, given that there the same topic area. i know that supervisor campos is probably on his way, so if we could just told one minute and give him some time to get here. supervisor chu: supervisor campos has joined the committee. i want to introduce again, we have called both items over three and four. both items are hearing requests with regards to the overtime budget before it began in the presentation, supervisor campos, wanted to offer you the opportunity to say a few words. supervisor campos: thank you very much, madam clerk -- madam chair, i am sorry. my apologies.

it has been a long day already. i want to thank the chair of the budget committee for scheduling this item. i also want to thank the members of the committee for giving me the opportunity to have a hearing on this matter. we have been talking about overtime for quite some time, and as you know, supervisor farrell and i introduced legislation last year to address the issue of overtime. it is not that we think that overtime is not appropriate. there are times when overtime is indeed an appropriate way of dealing with staffing. but we do have a concern about the trend in overtime that we have seen in the last few years. and i want to thank the controller's office for the record that they have put together, something they have been working on for many years. and they keep us informed of how things are going. the specific hearing request that i put in talks about what we have seen.

and if the current trends continue, the department's here in the city are projected to spend 167 -- $167.4 million on overtime, which is close to 40% more than was actually budgeted for overtime. that, by the way, is $23.4 million more than what was previously spent in the prior fiscal year. and a specific concern to us is the fact that the five city departments that have used more overtime, and that is something that has been consistent in the last three years, are the municipal transportation agency -- and i want to thank the director of transportation who is here. the fire to permit, and i see the chief is here. the police department, the department of public health, and the sheriff. something else that the report from the controller showed is

that about 858 employees are on track to exceed the requirements of section 18.13-1b of chapter 18 of the administrative code, which actually prohibits departments from allowing employees to work overtime hours in excess of 25% of their regularly scheduled hours. the last thing i will notice that we do also want to know more about the issue of how as- needed employees are being used and exactly the extent to which departments are relying on as- needed employees. the use of as-needed employees may be appropriate at times, but it also raises some concerns about the use of those employees. it is not only an issue of saving money, but it is an issue of making sure we're treating employees fairly and that they

are accorded the rights that they are entitled to under the civil service system. thank you very much, madam chair. supervisor chu: thank you very much, supervisor campos. perhaps we can begin by asking the controller to briefly speak to the overtime report. >> good morning, supervisors. i am the controller. thank you for the hearing today. as you are all aware, our office is required to provide a report to the mayor and board of supervisors regarding overtime spending by city departments at 6 and nine months. we have a copy of this six-month report that our office issued about six weeks ago. there are copies available on the podium, and it is available on our website. as supervisor campos indicated, as of the six-month mark, if current trends continue our office would expect that the city would spend approximately $167 million on overtime in the current fiscal year. that is a straight line projection based on spending to the first half of the fiscal

year. at $167 million, that would mean that the city exceeded our budget for overtime in the current fiscal year by $47.2 million or approximately 39%. this would represent a proximate $23 million increase from the actual level of overtime spending the year before. as has been the case for many years, over time is predominately employed in our five largest -- five over time using departments, approximately 88% of our overtime is incurred as a city with in those five departments. and we're talking about the mta, the fire department, the police department of the public help, and the sheriff -- department, public health, and the sheriff. the final page has a summary of spending by department. over the last couple of fiscal years and our projections in the current year. of the largest five departments,

four of the five are anticipated to overspend their budgeted over time and in the current fiscal year. and under the revised ordinance introduced by supervisor campos last year and approved by the board last fall, each of those departments is required to come back to the board of surprises to reach appropriate funds available in permanent salaries and -- board of supervisors and to reappropriate funds available in permanent salaries. it provides information regarding the status of caps on individual use of overtime in city departments. as you may recall, the city has an admin code provision that limits the use of overtime hours for any individual to know more than 25% of that individual's earned hours. at the six-month mark, we have 252 employees with in the city's work force that have exceeded

that cap, and many have been granted exemptions which are allowed under the ordinance by the department of human resources. additionally, we would anticipate, based on use of overtime hours there the first six months, if those rates of individual use continue for the remainder of the fiscal year, we anticipate that that number would grow to more likely 850. halfway mark of the year, we have 250 employees who had exceeded the cap. if individual use grades continue, that number will increase in the belief in the second half of the year. that is outlined in the report on pages three and four. that is a high level of what the report tells you. i know you have any departments here today to answer questions regarding their individual use of overtime and numbers you see in the report. supervisor chu: thank you very much. supervisor campos? supervisor campos: yes, madam chair. thank you. thank you to the comptroller and his office.

i think it would be important to hear from some of the departments that are here. some may have something to present. i think it would be appropriate for us to hear from them. i also would like to, once we hear from the departments, i would like to ask the department of human resources some questions. i think, for me, the main question with the departments is that the goal of the legislation that we wrote with supervisor farrell was to reduce overtime with the understanding that, even though you're never going to be able to avoid the use of overtime, that if you do have proper staffing and you have the right level of staffing at different agencies, you could have a situation where the use of overtime is a more stable. and i give the example, you know, the private sector of the company after a number years, if

they see that they are relying extensively on overtime, you know, they ask themselves the question of -- you know, is my staffing appropriator and do i need to change my staffing to deal with that situation? if it is ok with the chair, maybe we can hear from the departments that are here. supervisor chu: sounds good. there are a number of the mind the crowd. i know there could be more determined than this. perhaps we can focus on the highest over time using departments. i think the controller's office mentioned the mta, fire, police, and the sheriff. if the department have a comment about the overtime report, to be fair, and i understand we did not necessarily ask the department have time to provide a presentation, but some probably have a few words to what the overtime is about. >> good morning.

san francisco fire department, joanne hayes-white. i did want to make a few comments to provide some context regarding the overtime expenditure in item five, which will be coming to you shortly to request a reallocation. it is a reallocation from salaries into overtime to this is the ninth budget i have been involved with presented in preparing. we have never come to you asking for more money than what we were originally allocated. i think it is important to frame what we're discussing today. we have never exceeded our budget. however, i do have one slight that i think tells a pretty interesting story. it has to do with the methodology by which we are staffing. what i have here that i am putting up is basically our full-time employee count, and it is for uniformed members from

2002 forward. we had a high of 1845 uniformed employees in fiscal year 2002- 2003. president, we're down to 1374. that is significant -- present day, we're down to 1374. that is again but that is why our overtime expenditure is at the rate it is at. another thing that has come up, and supervisor campos came up last year in the gao committee, started the discussion regarding overtime. for me, it was very counterintuitive. about four or five years ago, we changed the way we staff. we have a higher percentage of overtime. we have worked with the mayor's budget office, the comptroller's office, and the budget analyst to do this analysis. and over time has been proven to be more efficient in terms of the bottom line and with increased pressure for every department to reduce their operating budgets, we have

relied on overtime more than hiring full-time equivalent. i am here to tell you that we're at a point where we do need to reinvigorate our work force. and you will see in our submittal for the 2012-2013 budget, we're calling for one class of 42 firefighters. we are at the point where we're doing mandatory overtime, and that is not good for several reasons. i wanted to point those things out to you. and i will be back for item number five. i would be happy to answer questions. supervisor avalos: thank you for being here. you touched upon my question. is there a sweet spot that we have where we do not want to go below a certain staffing level? >> at one point, we had1845. candidly, that is higher than we need. sweet spot, staffing and overtime is still more efficient

if you look at it from the numbers only because of the french -- and supervisor avalos: at some -- because of the fringe -- supervisor avalos: at some point, we need to look at this. you said mandatory overtime. >> yes. in terms of a higher number, we think we should be at 50 or 75 more. the class of 42 will help, but it is a band-aid solution because we have retirements that will be coming forward. we would like to be higher, and that is something that will be cut -- we will be coming to you with. supervisor chu: thank you, supervisor. supervisor campos? supervisor campos: thank you. that sort of got to my point. in the presentation you made before, the department i did find that there is a sweet spot where overtime may be more cost- effective. but that also necessarily means that there are situations where

overtime is not necessarily the way to go. and i think that when you compare the staffing levels, you know, of 1845, even if that is not the necessary amount, 1300 + that you're talking about, that is pretty significant. and you still have, i think, within the fire department, 286 employees that are exceeding 25% of their regular hours in overtime. and i understand that there may be reasons for each case. but nevertheless, you know, if we're going to have a rule that says you're not supposed to spend a certain percentage of your time in over time, i think we want to get to a point where we are following the rule. even though you're not talking about expanding your budget, you are talking about expanding your overtime budget, even if you are staying within the means of the overall budget. i think having the staffing strategy is very important, and i hope we can get to that point.

>> right, and it sounds like i had the support to have these classes because we are at an all-time low. from an operation perspective, and with the anniversary of the earthquake, we want to make sure that operational we have enough staff in the event of a recall and that sort of thing. another thing that i wanted to mention is that come july 1, we will be re occupy station 35, which we have not staffed for about three -- two years. that will put some pressure on, and until we get more people hired, we will be staffing the station on overtime. with the controller talk about in terms of the exemptions, we have worked very closely, and i appreciate the oversight of the department of human resources. the director and i have had discussions related to overtime. there are members that had exceeded the 25% cap. i believe it is 520 for a 40- hour work week for the

firefighters that generally work 48.6 hours. the cat -- you're right, we have people over the cap. we have three exemptions approved by the department of human-resources surrounding the reason why some of those employees are over that cap. supervisor campos: thank you. supervisor chu: thank you, chief, for your presentation. why don't we go to the next department? >> good morning, supervisors, members of the committee. ed risk in from the mta. i want to first paula -- ed reiskin from the mta. i want to apologize for being unable to attend the last hearing on overtime that was at the gao. i was scheduled to be there but was unable for reasons i cannot

control. what i was planning to do here today if it would be helpful is to provide an update from that presentation i messed. there is a lot of detail, so maybe i will move through it quickly. but i think there are a couple of things you will see that i think speak to some of the comments of supervisor campos in his opening remarks. that over time when you see your running overtime at a certain rate, you have to ask yourself if you have the right level of staffing. i think we have started to ask and answer those questions. the big picture, this is in the current year. we have a $780 million budget, of which the personnel portion is about $462 million get our current overtime budget is 30 two million dollars, of which $22 million is scheduled

overtime with and muni. this is over time that is built into our current schedules, which is necessary for us to provide the service. the scheduled overtime is the largest budgeted portion, but some of the other drivers are what are listed on this slide. special events have continued to be a significant driver of overtime. i will speak a little bit more to that. and to the point that the chief mate and supervisor campos made, we have correctly -- that the chief mate and soubriquet -- supervisor campos made, we have shortages from previous hiring freezes that leave us unable to meet all of the demands that we have on our 24/7 system of regular time work, so we end up back filling those through overtime. they are a combination of these

three things. either positions that are not in budget propositions in the budget but not filled, or positions in the budget and feel better not at work because they're on some sort of leave. these are all things we're working on. we also, as anybody who uses the city's transportation system knows, we have significant amounts of old assets and deferred maintenance which causes the need for us to expend a lot to keep the system running. you will see that in the numbers. these are the numbers. the middle columns are what we reported last time. we were about $25 million over budget on the overtime, so we were trekking towards a $57 million. a little bit better picture as of a month ago, $2 million, almost $2.5 million better. we're continuing the downward trend. but still far in excess of what

we are budgeted. you can also see that the single biggest driver is a vehicle maintenance, which is where some of our biggest maintenance deficiencies are. some of this is a reactive. when we had a vehicle breakdowns, but some of this is also a pro-active and a deliberate where we are given the amount of full-time employees we have, and we are scheduling overtime to focus on vehicle repairs so that we can improve vehicle reliability. in terms of transit operators, we're actually fairly close to our scheduled overtime budget, and that scheduled overtime budget will be coming down in time through the use of part- time operators. then you can see the other components here. down below, the enforcement, which is largely the parking control officers, much of which is driven by special evens. that is the picture today.

we expect it to be better by the end of the year. regardless of where it ends up at the end of the year, it will be within our overall budget. so then it just to quickly walk through each at the lion's -- lines. in terms of the transit operators, the single biggest thing -- there are two things that we need to do to reduce overtime. one is hiring. prop g and the contract was subsequently negotiated negotiated250a, transport workers union enabled us to use part-time drivers, which means that some of that is scheduled overtime or we had to settle in overtime to meet some of our demand, and that can start going away. we have got three or four classes of part timers now training and in place. as fast as we can get them hired and trained in on the road,

we're doing so but we're also endeavoring to keep up with our full time operator hiring and training. a number of years ago when that there were cuts to mta service, and then the service was restored, we were not able to ramp up the operator hiring as much. so some of that relied on overtime to fill. the main thing we're doing is trying to hire and staff and improve attendant -- attendance of dealing with sick leave and workers' compensation issues so that we can deliver a larger part of our service plan through regular time operators. and while we are relatively within budget on the transit operators, i want to point out that that is almost half of the overtime in the agency. to walk through some of the

other areas, i mentioned vehicle maintenance is where we are over by the most. you can see a number of things that we have done here. one of the most significant is trying to accelerate our capital fleet plan. the previous fleet plan would not have had a new bus hitting the streets of san francisco for another five years. given that we have some 20-year- old vehicles, that did not seem acceptable to me or to the agency. so we are trying to redo our fleet plan and work with our funding partners to see how we can get new buses on the road faster. these old vehicles are extremely maintenance and tens of. many of them do not have -- maintenance intensive. many of them did not have parts that are commercially available in the longer. there are parts that are very labor intensive for repair, including circuit boards and other hardware and make it very expensive to give these vehicles on the road.

but we have our charter mandates to deliver service. and given limited resources at maintenance, do -- we do use overtime to try to keep the service on the road. what we have done in the budget that was approved by the mta board yesterday and that will be submitted for your consideration next month is significantly increased the level of maintenance, mechanics, staffing in the agency. this speaks to the point you raised where we see that we are continually coming year-after- year, spending so much on overtime. part of the issue is shifting, bringing more regular time resources online so that we can do the significant amount of vehicle maintenance work and other maintenance work more so with regular time resources. what we're also doing in next year's budget is we are increasing the overtime budget. currently this year, we have a $32 million overtime budget.

we're checking at $53 million to $55 million. next year's proposed overtime budget is a $42 million. so it is a big increase in the budget, but it will represent a big decrease in actual spending from the $50 million range in have been in. we will be going from $50 million-7 this year to $42 million next fiscal year, and i hope it meets the spirit of the legislation that you all put in place. more or less, this same story on the rail side. some of the good news that is happening is that we're doing some rehabs of the rail fleet that are reducing the maintenance costs, particularly the doors and step mechanism which had the biggest failures. we have a contract with a vehicle manufacturer where we're putting in all new components. the ones that have come back

from that rehab are performing much better. there lasting a lot longer between failures, which reduces the maintenance costs. it is helping to reduce the need on the operating side. we're also -- in the maintenance area, we did have some of vacant funded positions. so we have been working with our hr folks to prioritize those positions for hiring so we get regular time bodies in place wherever we have funded vacancies. in the right away from muni, the tracks, overhead wires, signals, switches -- again, we're targeting hiring. but a lot of the over expenditure in this area has been deliberate spending for things like the eureka curve. anyone who writes the light rail line from west portal will notice that the trains slow

considerably as they come into castro station but that is because the rails there are worn and are not safe to operate at full speed. at night, we send a crew on overtime to replace those rails, which is the most cost-effective way that we can do so, but it does generate overtime. in terms of the management, the street supervision for muni, we have a pretty significant mismatch between our budgeting and how we are deploying resources. we are planning to change our whole approach to street supervision in a way that will significantly reduce overtime. i should say that this and many of the other steps we're taking our big culture changes for the agency and will not be well- received or popular by those who have been receiving and have been earning the over time but that has been part of their work

life, some of whom may find their way to city hall to complain about the way we're doing this, but we believe it is better for the agency fiscally and operationally, but it will be a pretty significant disruption and change of culture for the agency. so i will just warn you in advance of that. finally on the enforcement side, we're making sure we are recovering our costs. we're trying to do better on cost recovery across the board. nearly half of the pco overtime is reimbursed. this is special event where we have reimbursement. we have also been stepping up on the pco's to make sure any vacancies we have, we can fill and reduce the amount of overtime. finally, in terms of compliance with the admin code, we have put in place in overtime management plan to make sure