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tv   [untitled]    January 31, 2013 10:00pm-10:30pm PST

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what was the actual rate? $1.02 before. what was being proposed back in 2011? i'm trying to figure out if there -- since that time, i don't think we're quite satisfied with what the rate was and it changed during the ensuing negotiations that happened. >> okay. so, thank you for that question. so, there are some changes between -- in terms of the term of the previous agreement that you considered and today. in terms of the actual rate there was no change in the rate. so, at that point it was also proposed to go from $1.02 to $1.19. there were some changes in terms of the length of the agreement as well as the cap issue. i can go through those if you like as well. >> if you could briefly, i would appreciate that. >> sure. so, before the fast pass agreement was going to go from -- retroactive back to january 2010 to june of 2018. and then the cap would be structured based on the reimbursement rate itself of
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10%, but not on the total amount. so, for example, if the fares were to increase 10% in rider ship growth were to be 5%, then the total amount increase would be 15.5%. and then the future reimbursement rates would be tied to the percentage of growth in bart fareses similar to the way it's been historically structured. * those were the terms of the past agreement. >> thank you. and then the mta has already budgeted to provide a retroactive payment for these agreements? >> yes. >> the agreement? >> that is my understanding that is correct, yes. >> thank you. >> thank you, supervisor avalos. we have been joined by our colleagues, supervisor campos. supervisor campos. >> thank you very much, mr. chairman. i was watching the hearing and appreciate the work that was done by the mta, by bart, and i also appreciate some of the
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questions -- actually, all of the questions that were asked by my colleagues. and i know that this has been something that we have been working on for quite sometime. and you know, as i said when we first had this item come before the board, you know, we want something that is fair and reasonable for both agencies. and i appreciate the fact that, that both agencies have been working, you know, to get to that point. i'm not really sure, to be honest, if we're necessarily there and that's not, you know, because of a lack of trying. but i wanted to just point out a couple of things that to me are sort of interesting and certainly raise some concerns. i do have a question about why, you know, when we -- when we sent these items back, there was an idea that if we have an agreement where we're paying bart and we have an agreement
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where bart is paying us, that there be some similarity, or at least, in terms of what each agreement looks like. in this case you have two agreements. one has a term ending 2014, another one has a term ending 2020. you know. i don't understand why that is. if you look at some of the amounts that are being paid, the cap in terms of what the city is responsible for paying bart is $14 million, as i understand it. which is about 52% more over the next two years. and then if you look at what -- where bart is paying the city, that is capped at 5%. so, i'm not saying that it should be 5%, but there was a
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big disparity between 52% and 5%. i think the budget and legislative analyst had a recommendation in terms of the fast pass agreement of 10.5 million which would have made it 14%. and, so, again, i'm not saying that it should be this number or that number. but in terms of parity between the two agreementses and the approach, i do think that there are some questions that jump out, you know. and, so, just wondering if you can comment on that. >> yeah, i would be pleased through the chair. to a number of comments all very good and fair comments and questions. first i want to get to the letter i sent you late last night, which i know was just a few business hours before the meeting today. i take full responsibility for the delay on that.
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it was some kind of back and forth between us and bart and making sure we were getting what's kind of a complex issue boiled down to clear, understandable terms. so, i apologize for that. we had anticipated getting this before the previous budget and finance committee. we went through a round of briefing all of them and the board composition changed. we endeavored to get the new committee members briefed. so, we accept -- i accept responsibility for that. in terms -- both supervisor mar, supervisor campos brought up the issue of one is 2014, one is 2020. so, again, a couple things. one is that we requested from bart that they agree to a shorter term for the one agreement pending the kind of resolution of their fare policy which we expect to be coming within the next couple of months. if that comes into place as bart staff will be recommending
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to bart board, we would want to negotiate an extension out to 2020. so, we would get them on par that way. in terms of the question, would it be better to have both of them short term, both of them long term, as i said before for purposes of the staff time that's involved and the process even in securing approval for these agreements, and also for budget certainty for the next few budget cycles, it would be my strong preference that we have longer term agreements that have a framework that can account for changes and conditions that keeps things i think on a fair footing. in terms of the idea that things bump up when bart increases the fare, arguably what the fast pass does, if you buy that fast pass, you're paying us to be able to ride on bart system. bart's fare increases ostensibly represent the cost of bart providing the service.
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so, as bart's costs go up, i don't think it's unreasonable that that cost may go up. it's true, we don't control bart's fare increase, but i think it's also fair to say that bart's not making its fare policy decisions based on, you know, what it's going to get out of this agreement. i know you weren't suggesting this, butedth fact that we don't control it i guess my point is i don't think is inherently a bad thing. and then finally, the final point on the cap, i said before supervisor campos arrived, we in bart are willing to accept the budget analyst recommendation to bring that cap down to be closer aligned for the two years that the agreement is in place. if we extend it, we would come back with perhaps an adjusted cap. >> so, mr. rifkin, supervisor campos, sorry, do you have any follow-up? >> no, go ahead. >> so, a few comments on that. one, in terms of our payment to bart is based upon their fare
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increases. their pitv to us is based on a cpi growth. * payment that to me seems bizarre. i understand they're paying for their service, but they could do -- i'm not saying they do, but they could do a lousy job of curtailing costs or working to drive efficiencies in our own organization and we bear the brunt of that now. we do the same, we could work hard, but they don't -- it's not reciprocal on both ends and we have our own constituencies to deal with. whether it be political or working with your own staff. and to have ours -- their payment to us based upon cpi growth and ours based on whatever they decide to charge their riders, i'm not to say it's whimsical, not making light of that, but it seems unbalanced at best. >> and that's one of the reasons why we didn't want to extend beyond until we saw that they had a fare policy in place that was maybe kind of like ours. that is just an inflation adjusted fare to give ourselves some of that protection.
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it's just they are different agreements. you know, one of them you're taking a muni ound fare product and riding on bart. fact you've taken muni to get onto bart using a muni fare product. * they're not exactly aligned in terms of the agreement because what the agreements -- the underlying kind of mechanisms that we're trying to bring to the two systems and trying to improve integration of the transit system, they're just different things that the agreements are for which is maybe why there's two different agreements in the first place. >> understand. to the points about the terms of the contract, i guess long term contracts are better for saving staff time, i fully understand that. the other part that i'm still uncomfortable with, and i just don't understand why we wouldn't be bargaining for this. we have a -- they have negotiated to us a maximum of 5% cap annually. depending upon how our federal
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debt situation, cpi could erupt past that. right now we're not hitting that at all. and we have no cap on their increases. so, how do we think about that? >> there is a cap -- there is a dollar amount cap right now, but there is also a percentage cap in terms of what they can -- they pay us. that seems to be a lot -- a lot of lower threshold here that we don't have. >> then again, we in bart are willing to accept that lower cap. maybe bart can speak better to why from their standpoint the dollar cap makes more sense. their thing is it can be much more variable in terms of the one agreement, things they see they don't control. but bringing it down to 10-1/2 million as the budget analyst recommend i think would bring it closer in parity to the other agreement. >> okay, thanks. supervisor campos.
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>> thank you very much, mr. chairman. and i think that i share your concerns in term of the parity. and i appreciate that you're willing to go to 10.5 and 14% over the next two years. you know, i don't know that it should be 5%, but they're basically capping it at 5% and, you know, why shouldn't ours be at that level. i'm not saying that it should, but it's just a question that's there. but let me ask you a question. to the extent that we're tying the feeder agreement -- that we're focusing on the fareses at bart. where is bart in terms of its fare discussions right now? >> my understanding is that they will be bringing to their board i think maybe in march or so a proposed fare policy. maybe i'll let bart directly
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answer the question. >> and if that's the case, the question that i have is, you know, why not wait until we actually have a better understanding of what the fares are going to look like at bart? that's sort of a question that i -- >> well, i guess the answer to that is we could wait. we don't have any kind of real hard deadline here. as i said at the beginning, we started working on this a year and a half ago when grace and i first came into office. we're withholding payments from each other pending resolution of this. it's something that we've spent now a lot of time getting to this point. it took awhile getting through this process get tog this meeting. we're eager to get this done so we can close this and move forward. that's the reason. it's not a hard deadline. we're already long past that. and then i can let bart speak to the timing. >> please. thank you. >> good afternoon, my name is pamela [speaker not understood] and i'm here to speak on behalf of bart.
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so, first, to answer one of the most recent questions, we anticipate taking to our board sometime in this calendar year a renewal of our inflation based fare increase program. and this program raises fares every two years at the rate of national and local inflation less one half percentage point. so, there is some well crafted -- i can't speak to the board for our board as to whether they would approve that, but that is what we plan to take forward to the board. in the fast pass agreement there is a well crafted clause that when we get to the summer of 2014, two years into a year and a half from now, and we have not reached agreement going forward on a reimbursement rate, the reimbursement rate will continue at this inflation-based fare increase level. this is inflation less a one half percentage point.
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so, that is, that is what sfmta would look at going forward should we not reach some other type of reimbursement rate. so, and again, we anticipate taking a renewal of the fare increase program to our board, but as of yet we haven't taken it and they haven't acted on it. >> thank you very much. i was wondering if i could ask mr. rifkin just a follow-up question. and, again, i really appreciate all the work that's gone into this. i think it's great that we are where we are. i just think that, you know, there's some questions that remain. maybe you said this already and i apologize. but for the benefit of people who are here watching, where is the mta's payment with respect to the fast pass agreement? is that coming out of operating budget? >> these are all operating budget item. >> and how much more would -- or last, you know, would the
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mta be paying annually under the term of this agreement? >> i believe -- is it the fy '12? yeah. on the summary sheet, it's the information we provided, we'd be going on the fast pass from 7-8 to 9-1 for the last fiscal year. from about 2.6 to 2.7 on the feeder agreement. >> so -- i guess i do have a question on it, this is fiscal 12. we should talk about the future, what we project on the 13-14. i think they got the better of us right now on the negotiating
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to be perfectly blunt. we have a retroactive contract value where they're getting an additional 15% off of what the old value was and an increase of looks like 1.3, 1.3, $1.4 million, and we're getting an additional $75,000 and an increase of about 2.9%. it seems to be very inequitable. this is retroactivity, right? this seems to me like a gift. this is an agreement to be good natured together. that's a lot of money. that's a big difference. >> well, we're retroactive buzz the agreement we broth forth a year and a half ago was rejected. so, we didn't -- we're kind of further in arrears now. what we're -- what we're trying to do, the two agreements are different there. they represent different passenger activity. so, that's a little apples to oranges. that's why there are two different agreements. that's why the terms are different. we believe that this is fair and equitable what we assumed
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in our budget. so, this is an additional cost beyond what we've assumed. what we negotiated we believe is fair for muni and bart and to encourage and facilitate regional transit coordination. >> okay. >> if i may. i mean, i think i understand exactly what you're saying, mr. rifkin and i think your team has done a great job with this. i do -- the question for me, right, is if i, if i were to vote on these two agreements and a muni rider asks me, you know, whether or not we are protecting them as much as we can in terms of what comes out of the system, what is paid by the mta and in turn what the
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mta has to pay bart, i'm not sure, to be completely honest, how i would answer that question. and i understand that there is a negotiation in good faith and that you have two parties that each has their own financial challenges and constraints and you have two agencies that are trying to work together. but i do worry that we're kind of getting the short end of the stick to an extent, you know. if i can be honest, and that's the concern that i have. again, i appreciate the work that you have done and i understand and respect where you're coming from. >> i'd echo that as well. i respect the work [speaker not understood] put in on this. if we want to get to an agreement, although i fully concur with the sentiment here. question for you. what happens if we don't agree
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to this? what happens to payments for the terms of the existing contract? do we go month to month? where do we go? >> we would -- i believe we're both withholding payments from both right now. at some point we're going to have to reconcile because we're kind of screwing up each other's budgets and that's not in anybody's best interest. so, maybe we would make some sort of tentative agreement on to try to clear out retroactivity. although both sides are going to be hesitant to make any kind of agreements not knowing what the ultimate agreement is. so, it just leaves us in this less than ideal state of being years beyond previously expired agreement after spending all the intervening time negotiating what we believe is a mutually agreeable, acceptable, fair and equitable solution. >> and i understand that. i appreciate that sentiment. i think from i guess what i
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don't share is the sense right now that this is a fair and equitable agreement. while we're basing them, again -- we have a difference of opinion. we're basing them on bart fare increases which have been, again, they're increasing -- they're getting a retroactive increase of 1.3, $1.4 million. we're getting retroactive increase of $75,000. that to me doesn't seem equitable. similar to what supervisor campos said, i don't feel comfortable saying this is a good deal for us and this is something we should be doing retroactively increasing their values. aside from the go forward stuff that i think we focus on quite a bit as well. >> i guess i'll adi hear what you're saying. * many [speaker not understood]. that's what these agreements are about. and i think we don't look at this as we'll see what we can squeeze out of bart or bart is looking at what can we skis out of mta.
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we're really looking at what makes the most sense. especially to facilitate the connections between the two systems. so, i don't look at it as the muni riders are subsidizing the bart riders somehow. this is really about the riders that are moving between the two systems. and it's something we want to encourage because our transit system in the region, it's a regional system and many people move between the systems and that's what these agreements are meant to facilitate. i realize if you stand one next to the other they're looking equitable. again, they're different agreements achieving different goals or facilitating different movement of passengers. >> again, i appreciate that and that perspective. i think from my seat -- the longer term thing we're going to have to improve budget this year and that affects our budgets. if we focus on the free muni debate last year and the dollar amounts involved with that, the small dollar amounts involved in that $1.4 million goes a long way right now, sunday
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parking and things we've been very contentious about. so, question to the city attorney. we today -- there has been -- the bla has recommended a number of items here, but we are not -- am i correct to assume prior comments we're not actually allowed to amend them ourselves? we can send them back with instructions to amend, but we're not allowed to amend all of these item? >> deputy city attorney john givener. you -- because the parties have indicated that they are, they are willing to make the changes, you can make the amendment to the resolution today. you would have to hold another hearing because these are -- these amendments would require renoticing of this resolution. so, if the committee says you could adopt the amendment and then continue these matters to a future meeting.
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>> okay. colleagues, any questions or further comments? okay. mr. rifkin, thank you. thanks very much. at this time i'd like to open up to public comment if there are any members -- i'm sorry about that. before public comment, mr. rose. legislative analyst report. >> mr. chairman and members of the committee, i would point out on page 5 of our report that the, that the proposed feeder agreement wherein part is paying the sfmta, mr. chairman, that is a totaly voluntary agreement so that bart does not have to enter into the agreement the feeder
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agreement or where the sfmta is getting a payment. it's totally voluntary. * that is in contrast to the fast pass agreement. on page 7 of our report regarding the -- regarding that feeder agreement as shown in table 1 on page 7 of our report, that without the 5% annual cap on the payment increases, the payments would increase approximately 6 percent annually, and would result in a total of $33.3 million in payments in bart through sfmta. that is an increase of about 1.2 million in payments over the term of the proposed feeder agreement with the 5% cap in place. and while we believe that the 5% cap is reasonable, we note that there is currently no floor limiting how much the
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annual payments by bart and sfmta would decrease over the ten-year term. so, that's why we've made a recommendation regarding that issue. on page 8 of our report, we point out that as shown in table 3, the -- based on the estimated payments for both the proposed fast pass and feeder agreements, that the sfmta would pay an estimated 26.4 million in total net payments to bart from fiscal year 10-11 through 13-14 which represents the overlapping time period of the proposed fast pass and feeder agreements. and then on page -- at the bottom of page 9 of our report, we point out that because the sfmta's 11-12-inch correctthval revenues of 3.6 million from the proposed $10 additional fee for purchasing the fast pass with the bart option are 5.6 million less than the sfmta's
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11-12 payments to bart of 9.2 million under the fast pass agreement, for that reason we consider approval of the proposed resolution to be a policy matter for the board of supervisors. that is regarding the fast pass agreement. so, to recap, our recommendations on page 10, we recommend that you amend the proposed resolution. this is file 11 86, to amend the proposed resolution as specified that the proposed feeder agreement would be revised. this is simply to correct the formula for the bart payment increases from 12-13 through 19-20. we also recommend that you amend the proposed resolution required that the proposed feeder agreement be revised to include the floor, as i mentioned, but no more than 5% on decreases in payments. these would be annual payments from bart to sfmta and then we recommend that you approve that
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resolution as amended. regarding the fast pass agreement, 12 11 87, we recommend you amend the resolution to impose to reduce the cap from 14 million to 10.5 million for a reduction of 3.5 million. and then i would also point out that we did not recommend approval of that agreement. we say that approval is a policy matter as amended. >> thank you, mr. rose. and a few questions the clerk and city attorney understand that the file has already reflected the revised formula for corrected payment so we do not need to make that amendment ; is that correct? >> that's correct. >> okay. and, mr. rose, just in thinking about this, putting a 5% floor since the contract is based upon a cpi, assuming a 5% deflationary annual number, is that correct? this would be protective of deflation of 5% or more every year?
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>> that is [speaker not understood] for changes in rider ship. formula includes rider ship. >> thanks, okay. >> colleagues, any questions of the budget legislative analyst? thank you very much. appreciate your report. and i know bart actually would like to come up and speak again. so, thank you again for being here. >> thank you. i just want to reiterate that we fully support the comments from mr. rifkin and mr. lee. and i appreciate mr. rose's summarization there. so, we do agree to the amendments that have been proposed. and thank you also for the clarification. the feeder agreement, as it is set up, is not only tied to increases or decreases in inflation, but also rider ship. so, it's not just adjusting by inflation, but also by the number of riders connecting from muni to bart. and then going back to the fast pass agreement, before our time, the fast pass was initially accepted on bart in 1983 to help alleviate capacity problems that sfmta was
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incurring along the market and mission corridor. so, bart provides a valuable service to the riders of san francisco and to sfmta in providing a direct service along mission and along market bringing passengers from balboa park all the way up to as far as embarcadaro. this is the fast pass was not available to be used on bart. sfmta would no doubt incur additional expenses to carry those riders on their buses. so, we are providing a service. sfmta does set the price of the fast pass. not only the original price, but also the differential pricing that was put in place a couple of years ago. they control the price of the fast pass and level of service that they offer connecting to bart stations. so, we provide supplemental capacity in those corridors and i believe it is a valuable service. so, and then lastly just to


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