>> okay. i think we're going to

try and get going if folks want to take a seat or stand that's okay to. it's a simulated condition on muni bus. can you hear me all right. okay. well good evening, everyone welcome and thank you very much for taking time out of our evening i'm sure there's other things to do with your time but appreciate it. overwhelm edward reiskin the director of transportation at the mta we're using this and other venues to provide an opportunity to share our budget process with you the public and get feedback from you as well as we deliberate and work towards

delivering a balanced budget by may first. so i have a presentation to walk through to try to explain did capital budget and then the balance of the evening for as long as everything wants to stay to ask questions and give us opinions that's the purpose of this evening without further ado, i'm going to start walking through that. this is what i'm going to cover. a little bit about the agency and about our budget our status and what opportunities with rehave with this budget and a next steps and really the important part for me will be the questions and feedback that you have. so you probably all know the scope of what we do at the mta

we're the cities transportation department and do transportation engineering responsible for bike and pedestrian safety and parking and management and operate muni the nation 7th largest transportation stem and regulate the altercates we have a strong responsibility for the transportation in the city that's in the course around the country some places their scattered the slide shows some of the assets and the amount of service we provide not to meant to be a comprehensive list but the scale and scope of what we're responsible for that managing and delivering so how

do we manage such a big and a diverse scope. the way we do it primarily is within the framework of a strategic plan the sfmta board of directors their governed by a board of directors appointed by mayor and they adapted a strategic plan covering 2013-2014 to 18 that's the guiding document that's meant to embody our policy and resourced allocation decisions this is against all odds us the programs and the processes and the services that's the strategic plan. there's a document that's the plan really kind of the core of the plan is the vision that's

san francisco the great city with excellent transportation choices and that's recognizing the important role that transportation plays her in san francisco and the desire for the people have options to make choices that abstract to san francisco being a great city. the board adapted 4 goals as part of the strategic plan that's broiven the work of the agency its about safety this is the first time goal because safety of the transportation system is the most important thing no matter what else we do to try to help people move around the city but safely whether they're on foot or driving a bus or car we want people to be able to get around the city safely.

the second goal is really meant to be an actualtion of the cities first policy which was adapted by the board of supervisors in 1973 in the chapter and our responsibility to really make transit biking and walking and other sustainable modes of transportation attractive and better options. the third goal reflects the roll that the transportation system plays in the economic and quality of life and 2r0ib8g to the nodes of our agency that we recognize to support and empower the workforce so people are

motivated and can achieve their goals. that's the framework in which we're managing the agency and in which we're developing this budget. so just some things that we're doing that are underway in line with those goals. obviously the core and you'll see this when we look at the budget slides the core of the agency a muni the biggest part of the agency moves the people in the city. one of the core things we're working hard to improve muni service and the infrastructure and it relies on how we communicate with people about it to make it a more attractive means of traffic for more people and more trips. we're improving communications

to people it's not just about the busses and trains about the information when the buses are coming and if there's a disruption out in the streets so we've been working on improving our website we have a twitter feed and next bus system trying to put more and better timely information into the hands of people who want to reside muni so it works better for them and part of what we're talking about today is the fiscal management of the agency where we've developed a 20-year capital plan where we look at the assets and the buses and traffic signals and stop signs and the overhead wires we evaluate the needs to bring them into a good state of

repair or rehabilitate them that's the frame of how we're going to be good studies that the public has encompassed us to manage that comes our 5 year capital plan and the operating budget are the fund we need to operate the agency to provide the service and the right-of-way to work on making the city's transportation system safer. we're also working to improve the transportation in san francisco working to improve taxi service put more taxis on the street and improve them easier to access such as though a new electronic hale system that we're putting into place now. in terms of bicycle and

pedestrian safety we've been hearing about that in the news seeing unfortunate collisions that are taking people's lives or seriously hurting people that shouldn't be happening. we're developing improvements in the bicycle and pedestrian network so people getting around on to the and bicycle we can do so safely. and lastly but more importantly we're really trying to change and improve and transform the way we engage with the people who pay our salaries and people who pay their muni fairs our customers the people of san francisco i think we have a great opportunity in this agency to much better or proactively more system masking better connect with people not only for

us to talk to people but to engage in dialog with people to get feedback from the public to make sure we understand what's not only in the best interests of the technical system for residents and those are just works of some things we're working on to advance the strategic plan those numbers relate to the goals. those are the things we're doing to move the agency forward. so we're talking about here primarily is the budget and the budget is the strategy plan it's the guiding framework that's the main policy involvements it's not just numbers on a piece of

paper in our case our fiscal cycle starts july one 2014 through june 30th, 2016, is the fiscal cycle we're talking about that we're developing. so the budget process is what we're in now, it's when we work with the public with our board with our staff to bring forward a budget it balances the revenues we can anticipate at the expenditures we expect to have and that's basically, what we're doing now. the budget is where i bring those together and balance them. like most is other organizations except the federal government we have to balance our budget every year to the board of supervisors and the mayor by may first of

every even numbered year. starting with the operating budget this is a picture of the revenue prospective. this the the revenue projects their $950 million that's a big operating budget. the breakdown of the revenues is about a quarter of those revenues coming from transit my muni fairs about a quarter of fairs pass through a general fund your property taxed and real estate transfer tax those are monies that go into the general fund by formula 0 portion is directed to us we have the single most biggest fund their fund that go to open

space and childcare and the biggest one comes to us to operate muni and the rest of the transportation. a quarter of general fund and about a third is from parking that's from parking meters and civilization and we get a share of the off street parking tax there's a 25 percent tax on off street we get 24 percent and those 3 things represent a third of our budget. we have a little bit we get in operating grants some from the sate and a little bit from our local savings that runs our transit program and that's from advertising and taxi permit revenues but the big cars transit fairs general fund my parking that's the majority of

our budget. i guess what i would say within the general fund revenues the amount of those who we don't control equip the transportation is an important part of economic will vitality in the city when the economy is doing better we get more and if the economy is bad we get less. we establish those fairs so we have control over those and parking revenues aside from the parking tax the meter fees and citation amaze we set so we have control over those as well. so that was the review side this is the expenditure side this is the basin budget that's not a proposed budget it's taking what we know this year and rolling it forward to the next two years so

the totals they're not the same so there must be some - okay. so this is the basin those are the revenues for next year and the xuchdz if you take what we're doing this year and role forward i'll show you what's included and not included. you'll see those are lower our basin we show a surplus and muni is the largest are part of the budget more than half of the agencies budget and the sustainable street which has many of the functions that you know as department of dp t is the biggest chunk where the bike and safety the transportation and parking and traffic and management enforcement all this is within sustainable streets.

another big category is it is custodial agency wide it's the general things like insurance it's our legal foes and some of the money we pay to the city for h.r. services and payroll services for the city controller services and the things like that it's overhead services. that really will accounts for most of it and the finance and technology group that manages our money and technology and our real estate and manages our procurement runs the customer service center downstairs and a number of other division but the big church is muni and parking and pedestrian safety and agency

wide my finance. so that's our basin expenditures taking what we have and rolling it forward. a few things we're assuming some adjustment in a good direction. based on trend we're seeing we think the amount we're paying out no adjustments and settlements is going to go down our workman's comp is going down the more we keep people from getting hurt in the first place we have an upward trend but we've set aside previously money we were looking at we're that you haven't aside in receiver.

we're like any organization we or any fiscally responsible one we have a policy a fiscal policy that requires us to keep an consequent of 10 percent so in a $800 million budget we will need motorbike for the disasters so we can keep the trains running we drew down on that because of the recession we've been putting money boo book into the reserve. we've met the 10 percent requirement we no longer need to add additional fund into the reserve so here's things in the

opposite direction a number of labor costs that we're not fully realized in the previous budget a big chunk of our organization people represented in our organization as well as throughout the city we entered into labor agreement a couple years ago that gave them some staggered raise one percent after a half year and another half percent when you annual lists that to 3 percent raise for all of those two to three employees that has a cost into the budget and number of other costs like premium pays and holiday pays that are in the contracts down below there's friendly benefit increases we're seeing generally, the cost of the benefits like health care

that's rising faster inflation. going back up there are a number of contracts new services we're putting in plays and new things that have costs we're do in taxi to better manage our garages and parking meter and payment we make to bart and caltrain all of that together represents american people there over the current budget. there are capital fund coming from different sources and impact fees we get from development and neighborhood and now that the economy is picking up we're getting additional on the revenue and expenditure side. finally work orders is a term we

use to industry the process we pay for other agencies to provide us service we pay the city attorney's office to pay for legal services and the police department for muni security. we pay a number of different agencies to do a number of things so we put a place holder expecting because of the costs increasing nor city staff those things are assumed. there's a number of things not assumed when we go later and a show a surplus there are things that are not assumed in the bachelor budget. first most important our employees 5 thousands are represented by unions who collective bargaining agreement are expiring we're in the

process of norwalk not labor agreement for our entire workforce. we guarantee don't know what the cost will be there is likely a cost our transit operators are 2 thousands of our 5 thousand employees they've had no wage increase in the last 3 years they've been flat as the economy and a cost of living has published u picked up. we'll anticipate that's a non-zero number a cost as of the negotiations. we have a structural deficit and try to explain what we mean by that. in order to provide muni service are to maintain our street

infrastructure let's stick with muni we need a bus and driver to pick up people but there's a lot of people involved the person who supervisors the derivative and the person who cleans and fixes the bused and cleans the restrooms so there's all those other costs if he were fully rours the system commemorate with the number of services we would have that number higher. when times were difficult we cut a lot of other supporting services. so we have a deficit in this regard of $150 million if we provide did level of services

the level of janitorial services and cleaning we'd have a lot more expenditure. we haven't anticipated any work order reduction so we're also looking ways to reduce the cost of those services. one significant thing we've not included in our base budget is the increase in transit service. many of you who ride muni there are muni lines that are crowded and there's a lot more demand for muni service than the service we're providing. the basin assumes the same level of service bus the demand from a person's prospective demand more service and the basin budget we've not anticipated any service. finally all the other divisions

the folks working on bicycle and safety and communication function those will have not been strong enough and technology services we think we could do more to enhance the service we provide to advance our plan none of those are included in the baseline budget i want to be clear what's in the baseline. so accounting for where we are this year and keeping in mind all the things we not accounting for in the baseline we start off are revenues exposing xuchdz so our baseline budget starts us off positively for this city in

many, many years so that's a good thing we're starting off in a better place than 4 or 5 years ago. that's a great place to start but so we have basically, if we don't change on the revenue side we have $22 million more we can extend and $50 million more in the second year but remember here's the things not included the structural gap is on the order of $50 million we have to close that and within the scope out the surplus if you look at the muni budget if we wanted to there service by 10 percent that's $50 million also that will more than within the scope out that projected surplus so we're starting in a good place

but also have a lot of needs to address. so i mentioned transit fairs about a quarter find our budget is one thing we have complete control over obviously anything has too fast the reality of the market patrolling place if we put the fairs too high people won't ride. historically the fairs stayed flat for a long time until deficits built up big until until the front yards were hiked up and we go and do it didn't. after the last time when 9 fairs went from 45 to $60 the mta board of directors figured it was noted a good way to sustain

our revenue. we know your expenses go up every year but the main revenue should go up every year they've implemented a system that basically index is by inflation. there's some rounding so the $2 fair had not gone up for two years but generally fairs index up over time and parking citation fees and permit costs index over time we have a consistent systematic predictability that's in line where we expect our fees to go

but the voter gave us authority to issue debt roche our capital needs were great we couldn't fund those nooepdz needs with our operating budget alone. this indexing policy was one of the things that the loan folks thought was strong and we can get low interest rates to improve the assets we have so the indexing policy generally speaking is a very good thing for everyone not that the fees people want to go up. so our opening statements when we look at fairs the