>> okay. are there any other comments, directors, before we go to the final presentation? okay. next. >> here, again, i think we have an opportunity to save and preserve discussion. in talking about vision zero and talking about, you know, what it will take to get it to a fast and frequent network, i think tom and i were trying to paint a picture to the board on where we need to go in the

short-term. we also through the day tomorrow are going to be talking about capital projects and capital priorities, so you have just a brief opportunity to hear from us on some of the places that we see that going. next slide. and the renewal, as i said, is one of my highest priorities for my work as transit director. for too long, i think we've looked at the subway as pieces of work when, really, we need to be looking at a five-to-ten-year potentially $1 billion investment. the good news is a lot of this work is underway, and where we still have uncertainties, we still have studies funded to guide our investments. next slide. state of good repair is also

going to continue to be something that you hear from me a lot, and encourage you to think through as we talk about tomorrow's prioritization. one of our state of good repair programs is our vehicles. we did not get there by accident. really, the next phase of our program is getting to a spaced-out bus purchasing program so that rather than letting everything get old at the same time and everything get new at the same time, that we're moving to annualize purchasing of our buses to continue the kind of order of nag mytude improvement that we've seen in vehicles. the second kind of discussion that we'll have has to do with our facilities. it's always difficult when you have something as massive as facilities to be allocated

resources for state of good repair, but i encourage you to do so because our facility constraints are creating major challenges in terms of how we approach the work. these are not modern facilities. they are not good for things like urban maintenance and efficiencies, and we need to invest in this work. next slide. the muni forward program, we see as continuing to have huge potential to get to our transit vision in the short-term focusing on the temporary transit lanes and the corridors that we have not already addressed. next slide, but as we build

into our ten-year program, what we'd really like to do is envision a frequent transit network where the bus is only stopping between stops, and that we've given so much protection and really optimized technology in a way that people can really count on our transit service. there's also some, you know, megaprojects that are going to come out of connectsf, and we'll have a lot of time in the coming years to talk about that. next slide. and then, i want to very briefly turnover to -- turn over to tom, as well, because all of this requires to learn from our lessons even of the recent past and make sure that we're really creating accountability and project

delivery. tom, do you want to touch on this or do you want to wrap up and let the board tackle questions? >> so this -- this is a quick [inaudible] of some of the lessons that we've learned from projects like vanness, central subway, the twin peaks tunnel, things like this. by no means, an exhaustive list, but we're starting to see what we need to do to at the m.t.a. to deliver projects up to the scale expected. i won't go through all the details here, but this is a mix of internal improvements -- i think julie and i are pretty open and honest about the fact that we need to keep breaking down silos in the agency.

there's a role in the folks who design and plan the infrastructure to work much more closely with the people who will ultimately be responsible for the maintenance, ownership, and operation of the infrastructure. that's a two-way street working with the folks in the construction and operation division, and this is a topic that you'll hear in 21 -- or 22, rather. >> and with that, we'll turn it over for discussion and thank you for your patience as we made our way through some pretty dense material today. >> okay. directors, does anyone have any comments before we move to the last segment? seeing none, i will move to public comment. moderator, are there any commenters on the line, and

madam celaya, if you could repeat the announcements for people that are on the line. >> sure. dial 8 # 8-808-6929. the access code is 996-1064, and you will need to dial one, zero to be added to the speaker line. the answer time, this is actually the public comment period. moderator? >> operator: you have seven questions remaining. >> first speaker, please? >> hello, directors. my name is jodi madeiras, and i'm the director of walk san francisco. thank you for all of your work and the board for vision zero. there is so much in this presentation that we're happy to see.

first off, we're grateful to see cost effective, proven solutions, and the need to reduce speeds and more quick builds, yes, yes, yes to all of that. i do want to echo director eakins' ask. we believe that's what's needed to directly save lives. i do want to comment on the holting steady on the numbers and feel that we're doing better than other cities. we should never feel okay with even one life lost. this is not a very complete picture of traffic violence in san francisco. the question that's asked is

where should the resources be focused? a quick reminder, it's only 10% of the department's overall budget prioritizes the [inaudible]. we're hoping to see by the end of 2021, we're going to see 100 complete on the solutions that we saw on the dashboard tonight, and i just hope you come out of this ready to protect the funds in vision zero, and let's make 2021 a year of real progress in saving lives. thank you. >> thank you. next speaker, please. >> operator: you have eight questions remaining. >> next speaker. >> yes, how you doing? this is sterling haywood. i'm a parks control officer. so being born and raised in the city and then working for the

city, seeing the changes that go on, and what's happening, and then just listening to you guys' presentation, honestly, i just wanted to say -- i just feel like you guys are completely out of touch. i just feel like you guys are not in touch with the people that are actually working out there with the people and actually in the building, doing things to help the city try to go with this pandemic going on. now i know nobody's ever dealt with a pandemic like this, and nobody's ever dealt with a situation like this, but, you know, this is a time where you really need to listen and take value to what the people on the ground are doing. as a parks control officer, even before the pandemic, we was getting assaulted, we was dealing with all of these things, and even with the

pandemic, we're still steadily getting overlooked. you know, morale is a big thing, and the better things are, the more out of people you'll get. i don't really have a question, because the questions never get answered. i don't know why, but on our end, it never gets answered, and our concerns never get addressed. it's something you should all think about, about talking to people on the ground and really seeing what's going on, because right now, what you guys are talking about, just listening to this whole thing, it just seems like you guys are completely out of touch, and we're going to be the ones that suffer. thank you. >> thank you. next speaker, please. >> operator: you have seven questions remaining. >> next speaker, please. >> this is bob planthold. you've been talking through this session a lot about

outreach, and there's this glaring neglect, ignoring inreach. you're talking about staff, but you're neglecting the muni multimarket. nobody on the board and nobody in upper management thought to have a policy that you will always, no matter what decision comes, that you will always present to the interior groups, muni, access committee, and p.c.c., present to them before decision, and even better, before you go to outside groups because the people with disabilities and the seniors may help shape staff

presentation and thought when they go to -- thought. when they go to outside advocacy groups, you're getting ideas from outside the core. we people in special abilities, we have special rights. you say you're going to take care of us, but you don't talk to us until after making a decision? make a policy that we get talked to first before you talk to outside groups and before you make a decision. bye. >> thank you, mr. planthold. next speaker, please. >> operator: you have six questions remaining. >> next speaker. >> edward mason. i'd like to reflect on vision zero. last month, when returning from an essential shopping trip, i was waiting for the j inbound at 30 and delores and observed

three motorcycle officers, and i said -- and reflected, when was the last time that i actually saw one motorcycle officer? well, i boarded the j, and as we approached st. paul's church on church and valley street, there was a large accumulated crowd there. evidently, there was a funeral in process, and there were two mounted horse patrol policemen behind the priest that i could observe. my question is, when are we going to engage the police department in vision zero? you've got the highway patrol out catching motorists going over 100 miles per hour on the fridays. i observed a tesla accelerating on geary boulevard, and i

couldn't believe how they accelerated. we need to have more visibility of the police department on sight. doing it by mechanical means and a camera does not have the same effect as visual observance of a police officer that's there. back in the 50s, there were always numerous motorcycle officers patrolling the city, as i recall. so my comment is we have to engage the police department in more enforcement to reduce the amount of deaths that we currently have. thank you. >> thank you, mr. mason. next speaker, please. >> operator: you have six questions remaining. >> hello. hayden miller. lots of issues to talk about in these three segments, but first, i just want to mention that i'm standing outside of the presidio yards, and i don't

know if you read the letter i sent you, but the revenue van that likes to park on the sidewalk here, it's still on the sidewalk. that's not vision zero, when we have cars that are driving on the sidewalk to park on the sidewalk, especially when it's city employees. it's very disappointing. but then, on transit service, as it returns, i think the agency so far has been doing a decent job with the lines that they have brought back, such as the 27, looking at how there's real ways to redesign the lines, to maximize time savings and infrastructure benefits. i think we should look at other lines and how we can redesign them. the 57 line, that's an area that does not have a lot of coverage right now. that line is very, very confusing. it loops all over the place. we need to streamline it. so maybe it doesn't serve daly

city and west portal, maybe it only serves one of those communities. i think also, when bringing stuff back, we were aggressive last time with the metro service, and it failed, and, you know, we're not going to get a chance to fail again. if we fail when stuff reopens, people are going to drive their cars, people are going to give up on transit, and it's really going to be disastrous for the m.t.a. if they don't get it right, so there really needs to be a good look at having the service ready when it needs to go, but not being overly ambitious to the point it's going to fail, so that's all i have to say, i guess. >> thank you. next speaker, please. >> operator: you have five

questions remaining. >> yes, this is barry toronto. good evening. i appreciate everybody asking great questions. i actually want to side with the parking control officer, i want to say ditto to everything he said. in my e-mail to brit tanner, asking about the infrastructure plan, we wouldn't have known about the changes, and it's sad that the outreach has been horrible. regarding the slow streets, i think they're here to stay, i agree, but they can be tweaked. for example, the one in duboce triangle and noe street, i go through it all the time, all the way to duboce. i violate it all the time because there's no other way for me -- excuse me -- to get to the north part of the city

or to continue to where i need to go with the passengers without having to go straight through. [please stand by]

>> welcome to the workshop. please call the roll. director borden. >> here. >> brinkman. >> present. >> eaken. >> here. >> heminger. >> here. >> hinze. >> present. >> lai.

>> present. >> yekutiel. >> here. >> you have a quorum. the next item is communications. >> we are on sfgovtv. >> we will be on at 2:00. an online video is available at sfgovtv/watch. i will give my covid-19 announcement. due to covid-19 health emergency this meeting is held virtually. everyone is participating remotely. in our notice for the meeting and on the web page we ask you to leave a voicemail message. all comments received prior to today we have received them and appreciate those comments. thank you for honoring our request. we continue to urge the public

to write the board at any time. m.t.a. board add s.f.m.t.a. com. if you have attended the meetings you know the technology is not seamless. we have challenges. you may get cut off, phone line might go dead, audio problem. be patient and bear with us. when somebody happens in public comment is cut off we will restart public comment and allow people to call in. thank you for your patience and understanding. i want to thank everybody on the team who works hard to make these calls happen. there is a large group of people behind the scenes with the phone line, sfgovtv, microsoft teams and more to make this happen. thank you.

>> for the public information i would like to remind them of the instructions for making public comment. the phone number is (888)808-6929 code 996-1164. we ask that you please make sure in a quiet location, turn on of your tv or radio or mute the sound if you are live streaming so the board can hear you. when prompted dial 10 to be added to the speaker line. the auto prompt will indicate question and answer time. this is the public comment period. when prompted callers have the standard two minutes to provide comments. i will repeat the instructions

for how to make public comment again. some members may join late and may not have heard the information. item 9 is presentation and discussion regarding the s.f.m.t.a.'s operating and capital fiscal and structural deficits and possible options to address. >> this is the jeff has an introductory statement. if not, i will go into it. >> i will frame it up for you. this is a reminder. this is a two day intensive budget exercise to help us frame priorities for the coming 18 months or so. yesterday we described the economic issues that are faced by the city as a whole. we spoke about the specific economic challenges at

s.f.m.t.a. julie and tom talked about extraordinary success over the last year during the covid period and some of the dire challenges that we will face over the next 178 months. we -- 18 months. we summarize some of the specific challenges and high level questions we have for you. i think we have been able to demonstrate that we know how to address every one of the challenges we pays. we know how to deliver the san francisco transportation system. we do not have the funding or staffing level needed to do so. we need to make some really hard choices. we ended the conversation yesterday talking about values and the need to make hard choices rooted in the values. we know that the next 18 months

are a period of unprecedented uncertainty. we are entirely dependent upon outside federal funding to dig ourselves out of the covid financial hole. we have no idea what level of funding we will get. if we don't get the funding we hope for, we will need to use our values in order to make dramatic cuts to the agency in a way to create the least amount of harm. if we get substantial funding and are able to restore services, we will still need to make hard choices about what services do we restore first and do we bring the system back exactly as it was in 2019 or do we bring it back different, better, more in alignment with our values? today we are going to have more discussion than we did yesterday. i know we promised a lot that we would cover a lot of material

today. today, staff are going to go over more detail about the fiscal reality we are facing as an agency, including how we have to deal with risk. this uncertainty about how much federal funding we might get is forcing us to think in different ways about risk. our first priority as we said yesterday being to avoid laying off the worke forcer. we also, of course, assigned homework last night to take a very complicated messy budget spreadsheet to help frame up how we might make those hard choices. i want to emphasize and we will come back to this later. that was not about making decisions about cutting this program over here and investing in that program over there. it wasn't about establishing the budget but rather helping us to understand what your priorities are and how we should be framing the hard choices as

we move forward in the coming months with those budget decisions we need to make. i would like to turn it back over to jonathan, our acting director of finance and information technology who can talk to you all in some detail about our budget reality. thank you. >> good afternoon, board members. jonathan here. senior budget manager and acting cfo. i am going through two quick presentations today. i am happy to take questions in between them. the manager of budget analysis will join me and our manager of asset management will be joining here and there. first presentation is short term in nature. how do we get through the next 18 months. the presentation after that is what do we do in the long-term? how do we start the process and

planning for tackling the long-term deficit? just going through this again. we are going to try to be as transparent as possible about the deficit and the future we are looking towards. there is no perfect answer. we do not have a crystal ball. we use a number of data sources to help us make decisions. one is looking at mobility. considering how people make transportation decisions. you will see here this is why we have shown the board numerous times. we update each time we come to you. the second wave has caused a new peak decline and loss in transit. that path we talked about revenues growing, slowlier than projected. month over month we did start seeing decline consistent with this behavioral change.

this is due, one, to the holidays and the impact of the virus and the closures and changes in behavior. you will see this in comparison to other cities. you will see when you look at the partners across the united states and the local cities. new zealand and see a little and london. the service we want to take this into account. next slide. here is the choice. you will see that pattern. interesting to see driving and walking and those choices. this is different with the apple mobility data. google automatically pings your phone based on destination.

we get a chance to see where people are going. across san francisco this is based on what people choose in the form of direction. you will see a curve and things changing. the noticeable drop in driving is something that was aligned with our parking revenue. that is the specific impact. >> now, i want to talk about the deficit specifically and the messaging since the beginning of the fiscal year. this is a very graphical version of the data we look at with regard to the financials every month. the gold and blue line is revenue and expenditures based on the budget. purple is the cares funds, green is parking and traffic. red is transit fares. on the right in that chart you will see the peak months that we

were hoping to hit in this fiscal year based on our projections. growth hitting the peak at the end of the fiscal year. when looking at that we hit the deficit, unclosable deficit when we began the fiscal year. we needed to wait to see what was happening with federal relief. when we entered to the model this is what it showed by april or expenditures would out pace revenues. that is when we started the budget. you will see here if you want to go back and forth between month one and two. you will see the trend that we began to see. our expenditures were down. you will see in august, september that line dropped. that was the budget plan you had approved. controlling hiring, looking at expenditures, mission critical

activities and reducing over time. we did see reduction in expenditures and you will see the result was that stretch out of cares fund from october to november. at the right it went down. we were starting to see the pattern we hoped to see the expense dip turreductions and the austerity measures we would see the decline in deficit and the revenues catch up. the plan all along. by fiscal month three the pattern continues. what we started to see the revenues were not growing fast enough. while that deficit went down it is picking up again and hitting the period of time that you will see separation. in april not as steep as before. use of care funds through november. we were looking month by month to see if our revenues were

tracking on the pace to hit the peaks we talked about before. by november -- by the october board meeting we changed parking revenue assumption. we were hoping to hit a month of $23 million. you will recall we came to you and said it is likely but the pattern of growth the month over month it was probably not possible for us to hit that. you will see looking at our expenditures considering the path of revenues. if that line starts to decline, deficits start to catch up really quick. you saw the deficit grow again. you will see by november we continue to see the decline in parking revenues. we lowered to $20 million. we also lowered the fare revenue expectations. updated the board during that month. you will see the impending impact on the deficit. you will see at this point that

we were going to go over in march. revenues were never going to catch up with expenditures and cares money gone. fiscal month 12. that is growing now to $18 million. we corrected the revenues. you can see that this is when we made the decision to come to the board and say we are at a point where we do not see any possibility of not having the worke forcer reduction. that deficit grew so much based on revenue trends and expenditures. in december we updated the board the trends and you will see the data monthly financials pointed us to making decisions that we have made up to this point in time. that said this is where we stand

now. this is a little change in the way you have seen it before. we want to be clear where we stand. revenue loss now column reflects total revenue loss. expenditure savings we project currently and we did realize in fiscal year 2020 you will see the federal relief column. this is what we assume to date. it doesn't mean there won't be more, but the best expectation on the what we are planning to ward are those amounts. you will see now that this leaves the final deficit we cannot close of $134 million. when you just add up those columns, you will see we have lost almost a billion dollars. there is still a possibility we will hit the billion dollars over the course of this

pandemic. the agency 20% through efficiencies and cuts. this is a conversation we will have whether or not we want to continue that level of austerity. to be clear, the adopted budget assumed a service reduction. this 20% reflects reduction on top of that largely. not completely because we did again plan we might have to cut back. that is on top of the original budget plan. you will see two-thirds covered through federal relief to the state to keep us going and keep us stable. we have 15% we are looking to close. i want be to be clear we still have the $129 million reserve that we have yet to use. we will have to take that deficit column and some of that is covered by federal relief or some through additional efficiency reductions which we

can talk about, and we do not know that revenue loss amount will not increase. what i will say is that after november and the month of december and january we saw revenue decline. to the levelings where it is almost like we are starting back with the summer. we went through six months. slowly climbed and then we just have gone back to where we started. that extends out the period of revenue recovery. therefore, it results in a loss of revenue against the planned expenditures. again, just quickly the board has senthis before. where we thought we are with revenue losses. federal relief from hr133. covering the $144 million to get us to net zero as we close the fiscal year. just guessing now about $230 million from that bill, but

it could be more. we have to wait and see what happens with m.t.c. that leaves $86 million with a deficit of $134 million to solve in the short term. again, this is the budget plan that the board adopted in the final budget june 2020. we have eliminated the board reserve. that was only if revenue was higher. we plugged those expenditures in. we assume off the table. we continue over time control. that is a huge part of the labor cost savings. we have implemented hiring freeze and focus omission critical positions. we will have a discussion about that toed. we are continuing expenditure controls. we hope through those measures to realize $118 million of savings. we set up and provided update on the capital program and capital

revenue losses. appending approval of revenue bond at board of supervisors that is delayed one week. we will wait to see if the board of supervisors will approve the final legislation to allow us to move forward. we think there will be room to exercise the ability with our federal grant to shift capital funds to operating one-time so that is now on the table as an option. we also have the rainy day reserves. if we stick with the 30%. that is $38.7 million. we changed some things on the worke forcer cost reduction. it is likely that there will be deferral of cost of living increase next year. we need to see if that shows up. there are discussions of furloughs. all energy to avoid layoffs in any which way. there will not be any in 2021 to our planning and work over the

next couple months there should be none in fiscal year 2022 either. these are the options. as director tumlin notedded. we don't want to make decisions today. we are looking to put packages together for the board and talk with the public and our employees about the impact of the changes. we have assumed the $19 million of that board reserve which was expenditures that came in higher than anticipated. we are talking with caltrain. they made clear the deficit. we were under the assumption we would not have to make any operating contribution in fiscal year 22. we have that on the table, but we will have to work that through with caltrain. that is a possibility. we are waiting to see if the labor agreement cola is

triggered by the march joint report of the controller and mayor's budget office. that is $10 million in savings. we want to make sure the revenue bond refinancing is possible. we don't know. to save up to $35 million. estimated somewhere 20 to $35 million amount. the austerity measures will not be $118 million next year. we know that is not possible to save that amount two times. aggressive austerity measures we think we can save up to $71 million. we will have a discussion about the impact of that decision. you will see the capital revenues shift, rainy day reserves. we did do an estimate of furloughs. we have looked at labor agreements. not all of them have an outright ban on furloughs.

usually when the city negotiates the arrangements it is consistent across the unions. this would be based on the labor agreements that allow us to do it. that may beings it complicated. if we were to pursue that it is possible to achieve $8 million in savings. $198 million of options to close $134 million deficit. just really on top of that i want to cover the capital losses. we did report to the board we anticipate capital revenue loss $202 million over five year cip. it is roughly $500 million in the period of the capital budget fiscal year 21 and 22. with luck the revenue bond will help close part of the losses through financing to continue the projects funded to pay

contracts against. next slide is almost the last one in the section. this is a response to the board on the state of good repair costs. what we did was we had shown you in the previous average of state every pair investments across our capital programs. these numbers on slide 19 reflect actual. each row reflects how much the agency should spend based on the useful life of those assets in those fiscal years. this is not after age. this is actual. the blue row shows what we invest in the capital improvement program. that last number is a little wrong. $76 million gap that should be red. what that means we willed an additional $76 million to our back log which is why the backlog continues to grow.

year-over-year we will not spend what we need to with regard to the assets. you will see the assets that require investments here. last slide in this section. again, we have shown you mobility data. this is the monthly financials which we use for projections and why we messaged and have taken the actions in the first year of fiscal year 21. again, the deficit will be closed in fiscal year 21. there will be a deficit remaining in fiscal year 22 we are looking to solve. we provided options to close that deficit and we will have public discussions and internal discussions about those, but any feedback on those options would be appreciated. then we did have a plan. we had actions we prepared for. now what we want be to do is prepare deficit reduction plan

for fiscal year 22. we are in the middle of two year budget. we do not have to submit anything to the board of supervisors this year. what we do want to have in place is some sort of plan as to somehow we will close the deficit in the second year of our two year budget. with that you can stop sharing. i can go on unless there are questions on the short term. this just gets to the next 18 months. >> we have board member questions. we will start with director heminger. >> thank you, madam chair. jonathon i want to start with federal aid. i think it is confusing to track all of the bills. according to my tally, we have had two bills passed. cares act and the appropriations bill. there is a third bill that president biden is negotiating with the congress, correct?

>> correct. there is a $1.9 trillion proposed additional stimulus federal relief that is including $20 billion for transit. >> so to bring us back to our level, the numbers i have indicate that the m.t.a. received about $370 million from the cares act which was round numbers about 30% of what the bay area received. >> that's correct. >> your number for the appropriations act, i believe your assumption is $230 million, you said? >> correct. >> that number is about 23% of the bay area total so why are you being so bearish on how good a negotiator tumlin is.

>> the formula is fluctuating and has been with m.t.c. we don't want to take the risk we don't get the money and have no back up plan or no options on how to close the deficit if we don't receive what we anticipate. today if you asked me as a bet 70% chance we could get more than that. there are limits within the legislation itself about how much we can get. i believe transit agencies in urban areas were not to get more than 75% of total operating budget peak in 270s. there is a flexibility in rather that remains. >> it sounds like you are acknowledging upside potential there. getting to the biden package, which i think is the more important variable here, as you said that is $20 billion more

for transit nationally, which is midpoint between the cares act and the appropriations bill. by itself if everything flows according to flan from federal to region to the mt a, if anything close to what the president is recommending gets passed, that wipes out that $134 million deficit in a hurry, doesn't it? >> yes. >> so it seems to me, look, i know you are trying to get us focused on the structural deficit as well, but we are human beings to look at what is in front of our eyes. that is that deficit that could be substantially reduced, it seems to me eliminated if we do get a bill passed in washington.

if i were a betting man, i would bet we will get something passed in washington one way or the other. it strikes me that it might be better for us to focus on a biden path and non biden path because if the biden path takes care of near term deficits, then we turn to be the structural deficit which we can't expect federal aid to keep coming. does that may being sense to you? >> that the is exact feedback that i personally am looking for. we can definitely build packages and that. my technical advice to the board that every action we have taken has been to buy us a couple more months until we got the answers you just talked about. we can definitely prepare options that look like that for you.

>> ultimately the strategy needs to be paying attention to the 2022 ballot. the first opportunity to take a crack at the structural deficit. we want to be asking questions how much risk should we be taking now to build up the agency using federal funding that could put us at a cliff if we are not successful in 2022. >> a couple quick questions on slide 17, the chart with the deficit reduction options. one question maybe to jeff. under the federal aid that we have been receiving, i have been under the assumption that money comes with a string. you can't layoff employees. is that true? >> that is true. what we are hearing for agencies

that are suffering worse than we are, if you don't have the wherewithal to meet payroll, what choice will agencies have other than layoffs? it is one of the reasons why we have taken a very conservative approach at s.f.m.t.a. we are risk avers when it comes to layoffs. we are some ringing through at -- shrinking through attrition to minimize layoffs. >> is it yes, we are not allowed to layoff folks if we accept these funds? >> that is one of the provisions. we also do not understand what would happen to us if we simply could not meet payroll. if we are not able to meet payroll, is the federal government going to ask for money back to have us go out of

business? we don't understand what that provision actually means and if it is enforceable. >> it sounds like we have constraints in the federal law and city law in terms of how we deal with furloughs and layoffs. two last questions on this chart. one on the bond refinancing. you indicate reduction in debt service. does that include liquidating debt service reserve? >> those savings would include liquidating debt service reserve which is not necessary. there is no reason for us to it is on usable cash when we have an active deficit. we would release the reserves to cover the deficit. >> those funds would be available right away, right? >> they would be available right away, yes. >> finally, just please keep me informed on your discussions

with caltrain since i am the representative on that board just to make sure we have a glide path there. >> yes, we plan to keep you briefed and updated. >> thank you, madam chair. >> thank you, director heminger. director hinze. >> i fully support director heminger's direction to game out long-term as well as short term sennary scenarios. assuming we will receive varying level of aid to close the short term deficit. i want to associate myself with that request. one question on the bond. you mentioned it was postponed a week at the board of

supervisors. i just wanted to know any indications as to why that was? >> i will give it a stab. yesterday at the board of supervisors was the appropriation ordinance and the authorization to sell the bonds which require approval of board of supervisors. it was last action. the board had questions very similar to this board. one they wanted to think about why the m.t.a. would engage in additional debt service when we might get federal aid. they wanted to consider that. they also really wanted to understand the impact of interest rates changing if there was an outright delay of the

bond sale. i did make clear to the board of supervisors that our loss of capital revenues are absolute. the bills we need to pay on those capital projects are there one way or the other, whether or not federal relief shows up. the needs of the agency and the market conditions that exist for us to take any debt now are the best the agency will ever get. they understood that. they wanted us to be back next week. >> it seems to me from your side with the charts and i just want to confirm. even if we wiped out the short term deficit we wouldn't be spending what we need to spend to main tape our state of good repair, is that correct, am i reading that correctly?

>> you are reading that correctly. >> thank you, madam chair. >> thank you, director hinze. director lai. >> what is the expected timing on the hr133 allocation decision? >> first allocation already occurred. we are going to get about $42 million. we are working with our transit agency partners m.t.c. on the formula of distrobution for the second one now. m.t.c. hoped that decision would be made by the end of march. that is what their plan was. that is how long we think it will take. >> there are two key remaining question on the allocation. one is what do we mean by true up? in the previous round of aid we had to make estimates of losses

from various sources. the money jonathan referred to was given to us because we underestimated losses. the question is for agencies that overestimated losses does true up mean only raising up people who underestimated or debiting those who profited overestimated losses? i have an opinion on this topic. the second question is we made a commitment in the last roundabout distributing subsequent rounds with consideration of equity. we struggled with defining equity. we put forward in these strange times equity really means number of people being served. here is the af m.t.a. and at transit is we have higher ridership rates in the region and turning essential workers

behind as a result of crowding. we asked the ridership impacts be considered in the funding rooted in how many people are being serve would not just what are our fiscal losses from running buses and trains? >> thank you. that is helpful context. how confident is staff that we will m.t.c. will be able to come to a conclusion on the second part around the spring? this will impact our various scenario planning to the next fiscal year and how we advocate for fiscal year 2022 budget. >> highly confident on timing, uncertainty on how it will workout. >> i want to maybe publicly make sure we understand the austerity measures a little bit. i didn't get a chance to ask

about this yesterday. i think, jeff, you could handle this question. relating to overtime, i understand that we have aggressively limited over time to just be fiscally responsible. i am behind that. can staff help me and the public confirm whether or not overtime is really just applying to operators labor force aris there expenditure on over time with our essentially our like technical staff or office staff? i think the way i understood is that and again thanking staff really your commitment to work over 60 hours or 80 hours a week sometimes.

m.t.a. is not paying for over time in dollar amounts but perhaps occurring vacationer time, right? >> i love that question. >> overtime is a cash payment. you can get compensatory relieve which is what you are talking about. it is still a financial liability. there are hours of work not achieved. compensatory retime costs more than paying over time because as somebody gets cost of living increase they earn 1 to 3% less. when we pay for the time off we pay more. we have all directors across the agency, division directors are managing compensatory retime and over time. it is technical staff and the customer in the field. they review over time

case-by-case basis based on the operational need of the request. >> maybe pointing out that the payout for compensatory retime is longer period versus cash that is immediate. this exercise is about the next 16 months. >> let me point outgoing back to director heminger's question. one problem is immediate crisis, second structural deficit. >> absolutely. second part of jonathan's presentation i am focusing on meediate now. could we talk about the shifting capital to operations the one-time opportunity? is the amount you had presented on slide 17 the $25 million is that some sort of natural cap?

how did we come up with the $25 million? >> that is a fantastic question. i will invite you to add more our budget manager. if you will recall at the beginning of january we gave the m.t.a. board a presentation and laid out. we are losing $202 million. we have in the last budget shifted $50 million of permanent capital funds to operations. you are just starting to place a risk on the system that from a technical standpoint starts becoming dangerous when you talk about state every pair investments, contract commitments the agency has. upon reviewing the project commitment, state every pair investment, the staff were funded by capital projects. considering layoffs, $25 million was the amount that did not trigger any of those other

concerns. that also was based on us going out to the market and shifting dollars around and considering project cash flows. do you want to add to that? that was the reason. >> good afternoon. i guess i have a document. the presentation to the board. we recommended to the board not to shift any capital dollars to operating budget. you will recall mostly because the capital improvement program had $202 million reduction that we are working to try to reprioritize things out. when you take that into account we didn't recommend shifting to the operating budget. $25 million was up to amount we felt comfortable with the least

amount of impact to projects. >> thanks for asking that again. is the $25 million tied to specific capital projects we are shifting away from? >> transportation fund programs is extremely complicated. we are managing cash flow. we look to sources funding partners expect us to spend immediately. no more moneyunless you spend what you have. we work to stretch out cash flows. i need $10 million right now and they said we are only going to pay $2 million of the bill. we will go through cip to identify projects in that situation to free up cash to move to operating budget. >> i do understand that. again, what are those projects?

>> if the board chooses that option, we will absolutely tell us where those moneys are coming from. >> you have a list in mind, you are approximating the $25 million. you will provide a list and we can make decisions on which ones? >> yes. >> what would be the plan on the back end to backfill the capital? >> we are hoping the revenue bond might help with some of that. it does help with our capacity constraints to be able to do that. again, board members do recall the revenue bond gives us flexibility on the movement of capital funds. tim presented a huge form of capital funds are restricted to their use. we have no ability to move to operating budget or spend on anything else. this is why the revenue bond is important to approve. it gives you flexibility to move money around.

>> my last question is maybe -- maybe this is not the right time to talk about it let me know. we do have increasing requests to expand service even in the next 16 months. can staff provide any sort of numerical understanding around what that would cost? for example, if we were to bring back 50% service, 60% service, what would that actually amount to financially? >> we can, and i would suggest the staff will report back if you would like us to lay out those options we can do that with transit division. generally as rule of thumb referring to the muni reliability working group, we costed out generally a 5% service increase.

5% of service at about $33 million. right now that will give you a rule of thumb. we can if the board would like those options we can price each of those for you. >> right. i also want to make sure you understand there are other things to do to expand service. most of them are related to whatever rate of vaccination dph decides to eliminate the social distancing requirement on buses, and have us no longer be forced to take buses back to the yard at the end of every shift for sterilization. those two changes are effectively free and will allow a significant expansion in service. the other factor which we will talk about later today is things to improve efficiency like rapid expansion of temporary transit only lanes to reduce delay that

allows us to expand service. >> i do think that conversation is necessary for us to really be able to quantify some of these options because it seems to me that it is something we are going to have to very seriously consider and respond to in the near term even. if staff could really think about that and bring it back soon, that would be great. thank you, chair. >> thank you, director lai. director eaken. >> i support director's plans. if we get half, nothing we do this. reflecting on slide 17. if you want guidance from the board i saw a couple pathways to get to $134 million.

one is in light of the conversation about staff moral and everyone working over time. i would like the furloughs at the very bottom of any list we would consider to help close the gap. >> director heminger's question. >> could you also break out the f line and cable cars to the extent they have a different cost structure than just meat and potatoes bus service? >> yes, we can do that. >> thank you. >> i agree with everything my colleagues have said at this point. we will ask. yesterday at the board the bond financing was approved? >> it got delayed one week. >> we won't be abl