informing them of that and the consequences of that. we are starting to see a little bit of turn around in terms of attendance coming around and prospects look optimistic, but tomorrow should be much better, but i know there's been significant hardship in the meantime. but in terms of a couple of things that have not been clear. the first is the city charter prescribes a process under which all collective bargaining is done for the city and county not special to this union or to muni but for all the labor organizations with whom we have collective bargaining union. that process is that we negotiate in good faith until we go to in pass and enter into mediation and that's governed by a panel that consist of three members and one pick by the

city and one by the union and one neutral and out of that mediation process for any items that have not been agreement upon, the -- it was not the mta proposal or the union's proposal, but what came out of that mediation process that ended up in an all day mediation a few weeks back that ended with a recommendation that included the wage increases that are apart of that agreement, a number of other changes as well as a retirement swap. what we call requirement swap, which is the second thing that i think has not been clear in the media and even to the operators and i think it has been unfortunate,

i think the operators have opinion given bad guidance in terms of understanding this process and in terms of understanding the substance of what was put before them to vote, so i've asked the city's director of human resources to give some perspective and explanation on this retirement swap issue because it seems to be coming down to a key issue that's of concern to the operators that i don't has been communicated well to them. i don't think that the public understands it, so with your lead, i'd like to ask our director to explain how we got to this point and why we're doing this. >> director callahan. >> good afternoon, mr. president. commission members, thank you for the opportunity to be here today. what we call the

pension swap or the retirement swap is fairly complex so i'm here to hopefully clear the air and make sure that everybody understand what it is and what it entails. i want to start -- forgive me if i'm telling you things you already know, but i want to start with the fact that we have a defined benefit pension. there's two pieces to -- two ways that money goes into the pension fund. from an employer contribution and from an employee contribution. the employ contribution is standardized at 7.5 percent, that's the basis contribution and the -- that currently is for our next fiscal year, maybe an effective contribution for the employer including the mta and a quarter percent

for the employee percentage. last year it was as low as zero. the pension -- back in the late 90s throughout the city including mta workers, the city reached agreement in lieu of wage increases to pay the employee portion for employees so if of the two pieces, the employee said in a tigs -- we would pay the employee portion. the thinking behind it was you get more money impact for the -- in your pocket for the same outlay from the employer. it's because it's pre-tax so it's relief from the pension contribution from the employees and have the increase of take home pay. that was the standard for several years, and then when there were concessionary periods, it went back and forth. sometimes the employer was paying

the employee's portion called mpnc and sometimes the employees were paying that. all of the city contracts including mta's had an ending of that concession, of the concessions where the employees were paying their own contribution in 2006. in 2006 the city took the position or offered the employee groups to instead of having the city resume an employer paid member contribution of seven and a half to give a wage increase cost equivalent to the employer, so slightly lower number because for every dollar that we give in wages, we must payroll up costs, he call them. worker's comp and social security and pension. so it's a salary sensitive items that two up, so for -- that's why the cost equivalent

cost to the employer for that employer is less than the pension contribution. this is offered to our labor groups and in 2006 they started agreeing to it. reason they started agreeing to it because it increases their salary. the salary upon with i their final pension is based is going to be higher by that additional money, that raise they get. it's a higher base rate for future raises built on and they'll see the benefit in overtime and in premiums so that's why the unions wanted to agree to it. from the city's perspective or the employers perspective, people aren't seeing it. we want people to see how

much money we're spending. i have documents here and they're technical so i'll provide them to the secretary and give them out and i'll be happy to answer questions but the number that's neutral to the mta which we assess them in deriving is the seven and a half percent by the employees by their own pension plan and they'll siefb a point 05 increase in their salary. the reason for both employer and employ agree to it. my understanding is that it was apart of the mediated agreement. we agreed to it and presented it to the members and it's possible that some confusion about the relative benefits of the -- of this change would be to the employees and so that's my intention is to clear the air. it's a

fairly complex issue, so i'm happy to answer questions and if you would like me to go through the elements i can do that as well. that's another piece of information -- the last group setting aside the operators and possibly the supervisor, some of the supervisors at mta. the last city group to have an employer paid member contribution of any size is a registered nurse and on thursday night, they agreed to discontinue it. from the city perspective, it's a standard to have employees to pay into the pension, to pay the pension contribution and in fact, that is public policy, the state of california. there has been pension reform locally and state wide, the public employee pension reform that went state wide and effects most other agencies and does include preventions for ending of the employee payment and having

employees participate in their part of the pension. so i hope that was helpful and if not, i apologize, you i'll be happy to answer questions. i do have our city compensation member here. speaker: thank you very much. that was helpful. i'm not sure if this question is for you or director riskin. do we have a message to reach out to clarify this to the employees or has that somewhat already happened because as you said, the concern is it's confusing and i know as an employee as a large corporation, it can be confusing to figure out the benefits. i hope we have a good method do we need to rely on the union to clarify on that. >> i'll weigh in because that's what i do. there's limitations of what an employer can do in

terms of communicating to employees during bargaining. it's direct dealing which is when you go around the union to go to the employees but this is public information of what i just described and i believe the press is reporting on it but i believe with he have to be careful in terms of what we say directly to the employees. >> right. >> heinicke. >> i have a question which i think is for director riskin. these last few days have been madding. it's very important that you thank the workers who did come to work despite that and i'm glad you did that and it's a continue sign of your positive leadership. and explaining what the true facts here is really good. you did

clarify that this sort of coordinated sick out is illegal, which it is and i understand that the agency is taking the view that these days won't be compensated unless the operators can prove that there was -- that they were ill with a doctor's note or something like that, and i'm glad we're doing that. i will say personally i'm not sure that simply denying pay for this illegal act alone is enough especially if this continues or happens again. and so my question or request of you is could you and the city attorney look into and report back to us whether it's an open or closed session on what additional discipline is available to you and to we as the heads of this agency especially if this continues to happen again. what discipline is available to someone who uses a sick day when they're not actually sick and when it appears that's

part of an illegal labor effort. that would be useful information to us and i'd ask that you get back to us on that. >> yeah, i'd be happy to do so. >> so i guess just to summarize, if there are no more questions, what is -- the point of the negotiation is now is what was arrived at through a mediated process with both parties and the retirements swap or pension swap is basically trading the cost of the mta pays the employees contribution, instead stopping -- swapping and having the employee pay the employee's contribution and the mta pays the employees portion but compensate in salary to what our cost has been for paying that. it's an even

swap for us, it's more money in the pockets of the operators which as director callahan said, means the higher base for a retirement, higher base for overtime, for premiums, for future increases so i think those things have not been at all clear to the operators and the public and i think it's important that we wanted folks to understand that that's what's on the table. so the next step in the process is arbitration. the operators did bring this to a vote and they rejected it. there was an arbitration scheduled for saturday and we will be at that arbitration hoping to get final ruling from the arbitrator which per city charter would be binding. if no more questions on that, i want to thank director callahan and steve who has been helpful to us in this process. >> i would like to say a word

on the whole thing if i may. just in observation, someone who rides the system everyday, i'm profoundly aware of how vital this system is to so many people. for some of us, it's an inconvenience and for some of us, it's a crisis and i hope everybody is aware of that. you see people there who would not be able to go anywhere without it. and i hope to see arbitration -- i hope this is all over today, but the arbitration is over and back to work full-time next week. thank you callahan. >> that was really just focusing on one bargaining unit, but what we're doing here today is another requirement that i believe is in the city charter which is to publicly disclose the agreements with are we have concluding the negotiation process before you consider them for a vote. we had seven

agreements in total that we were bargain and we participated in the additional ones with the city. but we had seven of our own, three of them were transport workers union units. the operators which we discussed, the fare inspectors and the supervisors and managers. we also were negotiating with sciu, local 1021 and the association local 1414 and ibw local 6, the electricians and the municipal executive associations so those groups represent -- sic represents pco and station agencies and car cleaners, a lot of the administrative staff, 1414, represents a lot of the mechanics, local 6 represents electricians and mea represents managers. we went through that

process, that charter process that i described. four of the agreements will be disclosed today, that's 1414, and the machinist, local sixty electricians and mea, the other three units are in the process that i described before heading into arbitration. so just to summarize these agreements which we'll make publicly available for close of business today, so that they have 15 days as required for public inspection before you consider voting on them. what they all have in common are three year terms so they would start this july 2014 and go through june of 2017. they all have -- they basically follow the city pattern of four wage increase which is three percent starting

in october. 3.25 percent in the second contemporary starting in october. and then some where on the rain of 2.25 to 3.25 based on cpi in july of the third year. for mea, the the machinist and the electricians, moving them to standard city health contribution model which is where the city pays 93 percent of the cost for an employee or employee plus one health option or 83 percent for an employee plus to or more option. the fi ucon tract is -- the contractors paying 96 percent for employees plus one and 80 percent for employee plus two or more. a difference that the city agreed to for the

rest of the contract because most fiu members are lowest wage earners in the city. there were some other specific wage increases to address equity issues and different aspects of these contracts and the machinists union change of note was eliminating the cap of employees who can work on the weekend and we introduced our continued language to reduce pay rather than a being off which works when employees are home not working, that limits our ability to deliver our service. the total cost ' impact for the four agreement is $6.4 million in the first

fiscal year, and $9.1 million in the second for a total of 15.4 million for the two year budget. once we have the conclusion of the other three agreements, welcome back with a rebalancing plan for our budget because as you know, we didn't anticipate exactly these numbers in the budget that you approved back in april, so these agreements will be available online at sftm.com by 5:00 today and before i move on, i'll be happy to answer any questions about labor agreement. >> one more. arbitration on saturday, is there any experience -- do we have any experience -- an arbitrator making a decision and the union not going along with it somehow? >> yeah, that happens not infrequently. it happens the last time with the same collective bargaining unit where there was

a decision reached either in mediation or arbitration and went to vote of the membership, the membership vote it's down, then the arbitrator imposed it. so that's not uncommon. >> i think it's more like continuing a sick out if they don't like the decisions of the arbitrator. i'm talking about director heinicke's point there. i think if that would happen, if there would be a continuing sick out with after the arbitrator's decision, that would be serious and we would need to consider other actions. >> we can ask legal advise from council in closed session. the two are somewhat unrelated, sick out is illegal regardless. and the arbitrator rules is -- >> it seems to me that would

move it to a different level. >> again, a sick out -- either before or after an arbitrator's decision is illegal. in closed session, we can get advice from council on what our legal avenues might be. >> i'm interested in that as well and supporting whatever we can do to get the service back and up and running. people deserve it. >> that's our goal. i'll say the president of the union sent out a communication to union members today urging them to go back to work, so i had a discussion with him earlier today and i think if there's one point of an agreement, at least from our conversation is that we all want operators to get back to work so we can provide service to the people of san francisco, so we're hopeful we're on a path towards that and we're hopeful we'll see better service tomorrow. >> a couple of quick things. on may 22nd, the california

transportation foundations 25th annual award ceremony at that siragusa mown eeshgs the bike share was named pedestrian bicycle to jekt of the area. the foundation recognizes all those from the state and private sector all year. they were recognized and that includes the air district, the mtc, and red wood city, san mateo county, and santa clara and the mmta. the bay bridge, new east pedestrian path was also a finalist, but we're happy that the bike share was named the project of the year. we see it as a project and we do it with partnership with the region. it has taken off mostly here in san francisco. i think we have half the bikes at 90 percent of

the usage, so great. kudos to keith who is our director, and charlie rim, and the core team who have ushered bike share here in san francisco. so great recognition out there. i wanted to just note that we had a pretty significant -- pretty significant work and work with cal trans over memorial weekend. it was great work by our enforcement team to try to minimize the impacts of that. and what we're doing now with them related 280 is re-stripe the

lanes from the san jose off ramp. this is a project that has been championed my supervisor wiener and neighborhood residents to make that a safer corridor for biking and walking. right now it's a two lane off ramp and if anyone has tried to ride a bicycle there, you feel like you're riding on the freeway. it's not a comfortable place to ride. mayor lee and a number of us rode that stretch on ride your bike to workday. it has opinion under way for a decade. i know our former director sustainable streets and d pt has worked on this for years and supervisor wiener finally has been making progress with cal trans. there are some street closures associated with this in the vicinity of that off ramp, but we very much look forward to a much better and safer bike and

pedestrian as a result. and finally, our central subway tunnel machines are arriving in north beach. we are planning an event to celebrate this really huge mile stone. this is the combination, not the finish, you really the high point of the 230 something million dollar contact to bore the contracts through market through the city and to china town and north beach. we'll be having an event with the community and the public and as many of you that can be there for the historic day at some point in the next couple of weeks but a huge mile stone for the project that continues to proceed extraordinarily well. that concludes my report. >> thank you. members of the public. >> yes. >> only one, herbert winer. >> if there's members of the

public who wish to address the board to riskin. >> two things. i would like to have a report of late buses, switch backs as part of your report. i'd like to see that added and i think the public and the board should know it. the second thing i want to say in light of the last two days from my own perspective, i've just got a review of the project and what it will come to. thank you. >> anyone else wish to address the board on the director's report. >> thank you. >> moving onto item 8, citizen advisory council report, mr. chairman, they'll be no report today. item 9, general public comment, this is an opportunity for the public to address subjects but not on today's calendar. we'll start with ron

followed by herbert and followed by patrice m. >> good afternoon, smith. >> good afternoon members of the board and thank you for having me to present this afternoon. it's a difficult issue that i'm coming with. the classic f-line, favorite of tourist and residents have become a source of imitation for all riders and the tool in the war against the poor. in recent weeks, i have witnessed four to six fare checkers in as many as three san francisco police officers board the f-line, remove a bare chested barefoot homeless man, forcing him to stand in the cold as he struggled to produce id and be ticketed $110. i have witnessed another man lounge from the car and across market and van ness intersection to avoid such a fine. i sat next

to a latino woman from modesto brought to tears as she struggled to produce id. across the aisle her husband found his transfer and the driver acknowledged they had paid. they had come to the city to visit relatives. i have seen four to six fare checkers swarm around a woman with a questionable id strung around her neck and they picked up the it from her chest to examine it. she seemed unable to answer. seemed in fact emotionally disturbed. her and tourism watched. how much i wonder does the city pay these four to six checker and one to three police officers to insure $2 fares. in what universe is that responsible and in what society

is it humane. the director of housing opportunity has said he spends hours trying to expunge these fines from homeless people's records because they cannot pay. >> thank you. >> sir, that is your time. thank you. >> we'll be happy to see that. if you gave us something in write, right. >> yes, you have. >> winer, patrice, erik scott. >> herbert winer. i believe there is one member missing from the board. i believe there is one position that is open. since one person quit, i'm sorry i can't recall her name. but if there is a new member that's going to sit on the poured, -- sit on the board, i would like it to be a motorist because they're not represented on the mta board. you have two members of the bicyclist, but

no one represents a motorist, so they can weigh what is happening through the motorist of this city. currently parking spots are gobbled up like space and we need to have the motorist point of view. actually, mr. behind ski sympathized me two years ago and i hope it remains the same. i would like to suggest that a motorist fill in the empty sit. >> every time i go home and talk to my wife, i here the motorist view loud and clear, so i have sympathy. >> patrice. >> [inaudible]. >> that as not my suggestion. >> patrice m followed by erik scott. is patrice here? >> yeah. >> okay. >> good afternoon, directors. my full name is patrick musud.