Municipal Transportation Agency - Regular Meeting

and Parking Authority Commission to order. I would like to thank everyone who has contributed to this day. For many months, we have been receiving detailed information that supports our role overseeing and approving the very challenging 26, 27, 27, 28 budget. TODAY WE WILL HEAR FROM REPRESENTATIVES FROM THE MAYOR'S OFFICE, THE CITY CONTROLLER'S OFFICE, AND MEMBERS OF THE PUBLIC WHO HAVE PARTICIPATED IN THE AGENCY'S PROBLEM SOLVING EFFORTS. THE STAFF PRESENTATIONS WILL PROVIDE FURTHER INSIGHT INTO THE PLAN THAT STEERS THE AGENCY TO A POSITION OF GREATER FINANCIAL SECURITY IN THE YEARS TO COME. THE PATH THAT AVOIDS DRAMATIC CUTS TO MUNI SERVICE IS NARROW. and each milestone is strategically timed. This afternoon, we will hear planning scenarios for how we would methodically scale back operations should additional funding not be secured in the November election. While unpleasant, our understanding of the stakes we face will help us as we review the work of staff to ensure that our strategy is sound. In the weeks to come, we will finalize and approve the budget. Today is our best opportunity to provide feedback, enabling staff to present us with a completed budget that both preserves service and protects jobs as we continue to live within our means through this time of uncertainty. As you can imagine, we have a very full agenda today. TO MY FELLOW BOARD MEMBERS, I ASK THAT WE REMAIN MINDFUL OF THE TIME SO THAT WE CAN STAY ON SCHEDULE WHILE ENSURING WE STILL PROVIDE THE HIGH QUALITY FEEDBACK THE AGENCY NEEDS FROM US. SECRETARY SILVA WILL BE HELPING ME KEEP ON TIME, SO IF I DO NEED TO REMIND YOU TO BE SUCCINCT IN YOUR COMMENTS, I HOPE YOU'LL UNDERSTAND. SECRETARY SILVA, WILL YOU PLEASE CALL THE ROLL?

On the roll, Director Chen. Chen, present. Director Felder. Felder, present. Director Hemminger. Hemminger, present. Director Henderson. Henderson, present. Director Hinze.

Present.

Hinze, present. Director Kahina. Kahina, present. Chair Tarloff. Present. Tarloff, present. For the record, I note that Director Hinze is attending this meeting remotely. Director Hinze is reminded that she must appear on camera throughout the meeting and in order to speak or vote on any items. Places you on item number three. The ringing and use of cell phones and similar sound producing electronic devices are prohibited at this meeting. The chair may order the removal from the meeting room, any person responsible for the ringing or use of a cell phone or similar device. Places you on item number four, introduction and opening remarks.

Well, welcome to the annual SFMTA Board Workshop. Thank you to our partners at the Transportation Authority for hosting us in this beautiful room, hopefully not too distracting. This workshop, as Director Tarloff, Chair Tarloff shared, is especially important. We'll be focusing on how to balance our next two-year budget, and this is the budget when we run out of our pandemic relief funding and begin facing a $307 million budget gap. This is the largest deficit our agency has ever faced. BUT WE HAVE A PLAN TO BALANCE THE BUDGET AND ARE DETERMINED TO PRESERVE SERVICE FOR OUR CUSTOMERS. WE ALSO HAVE A CONSENSUS ON THIS PLAN THAT COMES OUT OF ALL THE WORK THE CONTROLLER'S OFFICE DID TO BRING TOGETHER SAN FRANCISCO STAKEHOLDERS WHO SERVED AS THE MUNI FUNDING WORKING GROUP. SO WE HAVE BEEN really benefiting from deep and continuous feedback and outreach on our budget for almost 18 months now. At the end of the day, you're going to hear a presentation on some of the budget-specific outreach, but that really builds on that longer piece of work. I'm proud of the work that we've done to make the SFMTA more efficient, and our budget deficit would have been far larger if we hadn't made substantial cuts and efficiency improvements. There are four sections of today's meeting. First, we'll hear from the city's controller and chief economist about the state of the San Francisco economy, which will help set the scene for the rest of the workshop. Next, we'll hear from SFMTA Chief Financial Officer Brima Horder about our proposal to balance the fiscal year 26-27 and 27-28 budget. This presentation will build on the earlier information that we have presented this fall and this winter, including potential new efficiency measures and agency generated revenue. In the third part of the workshop, I will walk you through contingency plans for a possible worst case scenario if one of the transit funding measures that will be on the ballot this November fails to pass. Although I don't expect this worst case scenario to happen, we do need to be prepared for it. And I need to make sure you and members of the public understand what it would mean in terms of the service and staff cuts at the SFMTA. In the last section of the workshop we'll hear what community members told us in response to our recent budget survey. We'll also hear from a panel of community members who will provide their perspective on the materials we've been discussing today. We have structured today to be primarily focused on board discussion. So we are gonna work very hard to keep our staff presentation short. I know you all understand how important this year is for the future of Muni and other critical transportation services that we provide to San Francisco. My goal is to be transparent with you and the public and to provide you with the information you need so you can make thoughtful decisions about San Francisco's transportation future. Before we dive into the rest of the meeting, I'd like to invite Alicia Jean-Baptiste, Mayor Lurie's Chief of Infrastructure, Climate and Mobility to provide a few additional comments. Alicia has been an incredible partner and has done an amazing job listening to a broad set of stakeholders and helping us all align on a really ambitious and complex funding plan. The mayor has been clear that saving uni is non-negotiable. And Alicia's work since joining his administration has been all about putting that commitment into practice. Thank you for being here.

Okay, good morning, everybody. Thank you for those introductory remarks, Julie, and good morning, Chair Teva, Vice Chair Kahina, members of the board. I really appreciate the opportunity to take a few minutes with you this morning. I know that across the city, policymakers are really grappling with very tough choices. So the city as a whole is facing a budget deficit over the next two years of about a billion dollars. That's a combination of our structural budget deficit as well as the impact of federal funding cuts that we're anticipating and that some of which we've already seen realized. That does not incorporate the fiscal cliff that Muni is facing. And what it means is that policymakers sitting in chairs like yours throughout the city are really going to be grappling with how do we proceed from here? How do we prioritize? What do we think about as core service? One of the earliest decisions that Mayor Lurie made coming into office over a year ago now was that as we're working through tough choices, Muni was not going to be something that was gonna be sacrificed. We understand, and he has said repeatedly, Muni is essential to our economic recovery as a city. It's essential to our environmental and social goals as a city. and it is also essential to our identity as a city. And so very early, he gave us direction that we would be working with your team to find ways to keep Muni whole as we move forward. Now, as you know, what is being proposed in terms of revenue measures for Muni is very ambitious. I think achievable, but also very ambitious. And we also have understood that even with successful revenue measures this fall, we are also going to need to be continuing to focus on cost controls and innovation and service as we are going to have a sustainable system over the long haul. That is work that has gone in parallel with your team over the last year as we've looked at the revenue side to also start to think about the expenditure side. It's work we expect to continue to engage with you all on over the coming years. I think that the Muni Forward program is an excellent example of how we can bring innovative thinking into cost controls and essentially provide more with less. we know we're going to need to see more of those kinds of ideas coming forward over you know over the subsequent months and years so we're really looking forward to working with your team on both pieces of the solution here to the muni challenge i really appreciate both the efforts of julie and the staff over the last year it has been essential to getting us into a pretty good place in terms of our prospects. And very much looking forward to the work that we will continue to do together and to the guidance that you all will be providing through your discussions today as you start to grapple with some of these hard choices. So again, thank you and appreciate all of your efforts.

We will now open public comment on this item for two minutes each.

Members of the public wishing to provide comment will have two minutes each. I will warn you when there are 30 seconds left and when time is up. Any public commenters for this item, the items that Julie and Alicia just spoke on, can come up to the microphone at this time. You'll need to turn on the microphone, Red Star.

Thank you. This is not a public comment, just a request. Could speakers please speak more directly into the microphone? It's really hard to hear back here.

Thank you. I'll also ask staff if we can turn the volume up in the room. Next speaker.

Hi, Joel Kamischer, school crossing guard rep. I know you've heard from me before. Okay, hi.

Can you try the other mic, sir? Thank you.

All right, pretty high tech. I hope my time starts now. As I said, I'm Joel Kamischer, school crossing guard rep. I know a lot of you know me and I can't talk fast enough to get everything I want to say in two minutes at previous meetings, so I'm back for a little bit. I'm hoping that most union members will support the effort to pass the ballot measure, but a lot of us don't work, don't live in San Francisco and can't vote. I'm concerned because, you know, reading some of the things like next door, sunset, there's a lot of people that get upset with the MTA. You're in a very difficult position. Whatever you do, some people are going to get really upset and are not going to vote for these things. But I hope we'll get these passed. I always try to hope for the best and prepare for the worst. And regarding the crossing guards, last year there was a proposal to eliminate the crossing guards, and that was quickly shot down. I hope that won't be resurrected, because the crossing guards only work two and a half hours And most of them are very low income people that often a crossing guard is a second person in a household that helps people stay in San Francisco. I personally will be probably retiring in 2027 and you won't hear me hounding you anymore, but so that wouldn't affect me. But I'm really hoping that even in the worst case scenario, if the bond measures fail and I know you'll have to make painful cuts, I wouldn't want to be in your shoes and have to do that. I'm hoping the Crossing Guard program can be spared because we perform a valuable public service, as you know, and I think that we prevent a lot of accidents, and that saves the city money in the long run. So, you know, like you said, we're a long way off, but I'm trying to kind of plant that seed in your mind and hope that... 30 seconds. I just hope that, you know, I think our budget is like $1.9 million a year. It's a very small thing, and I hope the Crossing Guard program will be spared. Thank you.

Thank you. Any other speakers for this, the introduction and opening remarks? Seeing none in the room, no accommodation requests.

Thank you. Public comment is now closed. Secretary Silva, please call the next item.

Okay. Places you on item number five. presentation and discussion regarding a citywide economic overview and agency budget overview.

Red star, all right.

Clicker, okay, great.

Good morning. THANK YOU FOR HAVING ME. THANK YOU FOR HAVING ME. THANK YOU FOR HAVING ME. I'M GREG WAGNER. I'M GREG WAGNER. I'M GREG WAGNER. I'M THE CITY CONTROLLER. I'M THE CITY CONTROLLER. I'M THE CITY CONTROLLER. I'VE ALSO GOT MY COLLEAGUE I'VE ALSO GOT MY COLLEAGUE I'VE ALSO GOT MY COLLEAGUE TED EGAN WHO'S THE CITY'S TED EGAN WHO'S THE CITY'S TED EGAN WHO'S THE CITY'S CHIEF ECONOMIST HERE. CHIEF ECONOMIST HERE. CHIEF ECONOMIST HERE.

AND WE'RE GOING TO DO AND WE'RE GOING TO DO AND WE'RE GOING TO DO A LITTLE BIT. A LITTLE BIT.

A LITTLE BIT. I'M GOING TO GO THROUGH IT. I'M GOING TO GO But I'm gonna talk a little bit about the state of the city's finances. We did this at last year's workshop and some things have changed and some things have stayed the same. I know that you all are deeply aware of how the MTA's finances are connected to the overall city financial picture. as you have one of your significant revenue sources, a share of general fund revenues. And so we're gonna talk a little bit about what that picture looks like and then kind of what the overall outlook is for the economy. And I'll just say, I've been in this role for two years. I've spent a good chunk of that thinking about this agency and the future of our transit funding. I gotta say, I've been really heartened to see the way that this board, the staff at the MTA, and the city have kind of come together to really tackle this daunting financial situation at the MTA and in the region, the regional transit system. And I'm looking forward to continuing to work with all of you to put ourselves in the right place. You all have a financial picture that is paralleled on the general fund side. The city budget obviously took, COVID had a big impact on the city's finances, the economy that drives our revenues. Similarly, the city had a period of time where it relied heavily on federal funding that was part of the COVID stimulus bills. In a lot of ways, the city general fund side has hit its fiscal cliff. There was a bolus of federal revenues that the city relied on for a number of years. Those have largely been used and depleted. And the city, like the MTA, is kind of in a position where we have still the lingering effects of the change in our underlying financials that started with COVID. So slow growth in revenues and growth in costs that surpasses the rate of revenues. SO THAT IS KIND OF THE UNDERLYING PICTURE AT THE CITY LEVEL. THE CITY, WHEN I CAME TO THE MTA BOARD RETREAT LAST YEAR, THE CITY WAS FACING A VERY SIGNIFICANT BUDGET DEFICIT. THE FORECAST FOR THE COMING YEAR, 26-27, WAS CLOSE TO A BILLION DOLLARS. AND IN THE BUDGET THAT WAS JUST PASSED, THERE'S BEEN A LOT OF PROGRESS IN ADDRESSING THAT STRUCTURAL DEFICIT. THERE WERE EXPENDITURE REDUCTIONS THROUGHOUT THE CITY THAT WERE NOT FUN, BUT I THINK WERE NECESSARY. THERE'S BEEN SOME IMPROVEMENT IN REVENUE FORECAST. BUT I THINK THE OTHER REALITY THAT WE'RE KIND OF GRAPPLING WITH AT THE CITY-WIDE LEVEL IS WHILE THERE WAS A LOT OF PROGRESS THERE, THERE'S ALSO BEEN A SETBACK IN THE FORM OF HOUSE RESOLUTION 1, WHICH IS THE LARGE FEDERAL LAW THAT WAS PASSED THAT MADE SIGNIFICANT REDUCTIONS TO SAFETY NET PROGRAMS, PARTICULARLY ELIGIBILITY FOR MEDICAID. and food assistance and other social safety net benefits. That complicates our financial picture because it's a loss of revenues for services that we provide today. So I think our picture is a little bit that we've made kind of two steps forward, one step back, but we're still walking. So the chart that I have up here shows the city's adopted five-year financial forecast. THIS IS A JOINT PROJECTION FROM MY OFFICE, FROM THE MAYOR'S BUDGET OFFICE, AND FROM THE BOARD OF SUPERVISORS BUDGET AND LEGISLATIVE ANALYST. THE TOP LINE SHOWS THE PROJECTED GROWTH IN EXPENDITURES. SO THE RED LINE IS THE GROWTH IN EXPENDITURES. THE BLUE LINE AT THE BOTTOM IS THE GROWTH IN REVENUES. SO AND THE GAP BETWEEN THOSE IS THE FORECASTED GENERAL FUND DEFICIT. SO AS YOU CAN SEE, Our revenues are growing, but they're not growing as fast as expenditures, and that's what's driving the deficit. So that's a similar picture. The dashed line in the middle is just for illustrative purposes, but basically what that's showing is what our revenues, what the blue line would be if not for the federal HR1 reductions to Medicaid and other social safety net services. So you can see an absence of that federal reduction. The blue line would be much closer to the red line, and our deficit would be smaller. So that's where I say we've made progress, but we have a counteracting setback in the form of that federal legislation. This is a tabular kind of format of that same big picture. You can see again that revenues are increasing as that top line positive numbers mean they're increasing over time. And the second section under uses shows that expenditures are also increasing at a faster rate. And at the very bottom line, you can see what the projected cumulative deficit is for the city's general fund over the five year period. That includes $296.3 million in the first year of the upcoming two-year budget and $640.3 million in the second year, so a two-year deficit of $936.6 million. So still a pretty significant budgetary gap that needs to be closed in the two years And as you look at those out years, you can see that the rate of growth in that deficit is not sustainable, which means there will need to be some structural changes made to address that growing structural gap. So there are some positives and some negatives in the picture. We, compared to where we were last year, we've seen improvement in some of our revenues. One of those is business tax revenues, where we've got growth projected compared to prior projections. A lot of that growth is, there are definitely positive signs in San Francisco, and I think we're starting to see the picture move in the right direction. But the rate of that growth is not what we would need to bring the budget back into alignment.

When we're looking at our business tax growth, what we're really seeing is some of the companies that pay business taxes in San Francisco are doing very well nationally and internationally.

And we're getting our little slice of that largesse through business tax. as opposed to a picture where we're seeing kind of booming business activity within San Francisco that's driving business tax revenues. We also have good news on a rebound in the volume of real estate transactions, which brings in real estate transfer tax. So more transactions by a large amount than we had seen in some of the slow years post-COVID. And I think that is a sign of a resetting real estate EACH OF THOSE TRANSACTIONS BRINGS IN A CERTAIN AMOUNT OF TRANSFER TAX REVENUE. THE FLIP SIDE OF THAT IS A LOT OF THOSE TRANSACTIONS ARE RESETTING PROPERTIES DOWN TO A LOWER LEVEL THAN PRE-PANDEMIC. WHAT THAT TRANSLATES INTO IS IMPACT ON OUR PROPERTY TAXES. SO PROPERTY TAXES ARE THE SINGLE LARGEST SOURCE OF GENERAL FUND REVENUES, AS WE'VE SEEN particularly in the commercial real estate market, property value is declining. The assessed value of those properties is appealed. The new value gets locked in, and we have to account for that affecting our property tax revenues for a number of years to come. I TALKED A LITTLE BIT ABOUT THE HR1 CUTS TO MEDICAID AND FOOD ASSISTANCE, BUT THOSE ARE ABOUT 300 MILLION OVER THE TWO YEARS, SO ABOUT ONE-THIRD, A LITTLE LESS THAN ONE-THIRD OF THE STRUCTURAL DEFICIT IS DUE TO THOSE FEDERAL FUNDING REDUCTIONS FOR MEDICAID AND FOOD ASSISTANCE. ON THE EXPENDITURE SIDE, THERE ARE A FEW THINGS DRIVING GROWTH, BUT AS ALWAYS, FOR the city as a whole and for the MTA, the single largest category of expenditures is personnel. So we have costs in wages and health insurance and pension benefits that are driving that top expenditure line growth at a rate faster than revenue. So what you will see as we get kind of into the re-forecast of The city's revenues in the spring and MTA's revenues is a mixed picture. As you all know, there are formulas in the charter that take a portion of general tax revenue growth and dedicate that to fund activities at the MTA. As we see a little bit of growth in our tax revenues, the MTA will get some of that growth. but you will also experience the counteracting effect of growth in personnel salary and benefit costs. And so it's a complicated picture, both for the city and for the MTA as we're looking at what these projections mean. Just a little bit more on probably the biggest uncertainty facing the city right now. Our property taxes, I mentioned that they are our largest OF GENERAL FUND REVENUES. WE HAVE RIGHT NOW, SO A PROPERTY OWNER HAS AN ASSESSED VALUE THAT IS THE BASIS FOR THEIR PROPERTY TAXES. WE HAVE RIGHT NOW A SITUATION WHERE WE'VE GOT A VOLUME AND DOLLAR VALUE THAT IS UNPRECEDENTED IN OUR HISTORY OF APPEALS OF THOSE PROPERTY VALUES. SO THOSE ARE PEOPLE WHO HAVE A PROPERTY. THEY BELIEVE THAT IT'S BEING TAXED AT A VALUE THAT'S HIGHER THAN ITS ACTUAL VALUE. and they have the ability to submit an appeal of that property's value. We have a huge amount of those appeals that are working their way through the process of adjudication, and that creates uncertainty in our budget. So we're trying to forecast without as much data as we would like, how many of those appeals are gonna be successful, at what level, and then trying to account for that in the forecast. So right now in the financial projection, WE'VE GOT A LITTLE OVER $300 MILLION SET ASIDE IN A RESERVE BASED ON THE EXPECTATION THAT WE'LL HAVE TO REFUND OR WE'LL HAVE TO LOWER THE ASSESSED VALUE OF PROPERTIES THAT ARE UNDER APPEAL. AND THE MORE DATA THAT WE HAVE ON HOW THOSE APPEALS ARE ACTUALLY ADJUDICATED, THE MORE CERTAINTY THAT WE'LL HAVE. big question mark in the city's finances about how that is actually gonna play out and we'll learn more over the coming years. I will not go into detail on all of these, but just a couple of others to give you a little bit of a picture of what we're still experiencing kind of post COVID. This is a graph that shows hotel and sales tax since fiscal year 18-19. And you can see the big dips in those revenues. We all are familiar with that dynamic. And then there's been some recovery. But hotel tax, for example, has not recovered to its pre-pandemic level. And the projection for growth in that is relatively flat. So we really do have some lingering impacts of the changes that happen in the economy that are expected to be with us for a number of years. Last thing that I will say is on risk to the forecast. There are a lot of risks for all of us right now and a lot of opportunities. There's continued uncertainty at the state and federal level. The state has a budgetary deficit and they'll have decisions to make about how much of that gets passed on to local government. So we're watching that closely. WE HAVE A NUMBER OF BALLOT MEASURES, BOTH ON THE JUNE BALLOT, TWO BUSINESS TAX MEASURES THAT LOOK LIKE THEY'RE GOING TO QUALIFY FOR THE JUNE BALLOT THAT WILL AFFECT CITY'S FINANCES, ONE THAT WOULD INCREASE BUSINESS TAX REVENUES AND ONE THAT WOULD DECREASE THOSE REVENUES. SO WE'RE GOING TO SEE A LOT OF CONVERSATION ABOUT THAT HAPPENING OVER THE NEXT FEW MONTHS. AND THEN, OF COURSE, WE HAVE SIGNIFICANT FOR VOTERS TO MAKE ON THE BALLOT IN NOVEMBER, INCLUDING THOSE THAT WE TALKED ABOUT EARLIER AND YOU'RE GOING TO TALK ABOUT LATER IN THE DAY. SO WITH THAT, I WILL JUST PAUSE AND TURN IT OVER TO TED, BUT I THINK JUST TO KIND OF REITERATE, THE BIG PICTURE HERE IS THERE ARE POSITIVE SIGNS OUT THERE. THERE ARE INDICATIONS THAT SAN FRANCISCO IS MAKING PROGRESS ON SOME OF ITS FINANCIAL CHALLENGES OVER THE PAST SEVERAL YEARS, BUT WE STILL HAVE A SIGNIFICANT DEFICIT REMAINING, AND THAT DEFICIT IS COMPLICATED BY THE FEDERAL ENVIRONMENT, WHICH HAS HINDERED OUR EFFORTS TO BRING OUR BUDGET BACK INTO STRUCTURAL ALIGNMENT. SO I'LL TURN IT OVER TO TED FOR THE CANDY.

I'M NOT SURE IT'S THE SWEETEST CANDY YOU COULD POSSIBLY HOPE FOR.

Do you have the clicker Greg?

Great, thank you. Good morning directors, it's nice to be back with you again this year. Before I dig into the details, I'll just say echoing Greg comments that the city's economy, I think the 25 words or less version is continuing to improve slowly from COVID. In some respects, the last year or two, there are signs that some aspects of the recovery have accelerated, but it's uneven across the city's economy. One of the things that has certainly changed a lot in San Francisco over the past two or three years is the role of AI investment in the city. And I think I'm going to start there just to share some information about that. It's both very important and kind of stunning. It was surprising to me as I look through this data and it's, I think, quite important for the near-term direction of the city's economy. Up from about 5% of Bay Area venture capital in the in the early 2010s. In last year, 2025, 80% of all of the venture capital in the Bay Area went specifically to artificial intelligence machine learning. It is both growing very rapidly in dollar terms, and other things that venture capitalists would have invested in six or seven years ago are not attracting the investment. AI has just become a bit of a feeding frenzy, both on the VC side and among large investments from large tech companies. And it is becoming really the driving force of innovation at the moment within the Bay Area tech cluster. The orange line here is showing the percentage of all deals, which is now about 60%. So if you look at across all of the investments made, through venture capital last year in the Bay Area, 60% of them were AI-related.

How important is San Francisco specifically in all of this?

This is looking at U.S. venture capital dollars specifically in AI machine learning. Extremely rapid growth the past three years, up to $250 billion. Last year, 80% of that went to companies based in the city of San Francisco. Over the past three years, over three years of that AI boom, 60% of that has gone into San Francisco. AI investment, venture capital, and also spending by big companies on things like data centers and related software and equipment has been a major source of GDP growth in the United States. According to some estimates, nearly half of GDP growth. the past two or three years has come from AI investment. And this is just looking at it on the venture capital side, which is a big piece of it, but it just shows the really absolute importance of San Francisco in this national economic story. So once again, and we've seen this story before in San Francisco, an enormous amount of money is being mobilized within the US economy, capital investment, and it's being focused on the Bay Area, and specifically on San Francisco. But so far, this has not really been a tech boom like we have seen it. And this is just going to contrast in terms of some aspects of economic impact, this current AI boom of 2023 to 2025 with the previous one that started in 2011 and went to 2023. In today's dollars, We have gotten in the past three years $405 billion of investment into the whole Bay Area in venture capital. Compare that to only $66 billion in venture capital we got at the start of the 2010s. So really like a multiple of nearly seven times as much venture capital and inflation-adjusted dollars going into the region this time. But the impact on the economy is completely different so far. DURING THAT INVESTMENT IN THE EARLY 2010, THERE WAS 5.3 MILLION SQUARE FEET OF NET OFFICE SPACE ABSORPTION, WHICH IS COMPANIES TAKING OFFICE SPACE MORE THAN LETTING OFFICE SPACE GO. THE PAST THREE YEARS IN SAN FRANCISCO, THERE'S BEEN NET ABSORPTION OF NEGATIVE 7.5 MILLION OVER 2023, 2024, AND 2025. WE ADDED IN THE CITY 33,000 plus tech jobs during the start of the tech boom in the 2010s. We've lost 30,000 jobs in the past three years in tech, notwithstanding AI in the past three years. That change in tech in the early 2010s created nearly 90,000 jobs across all industries in the city. We've lost jobs in the city over the last three years, almost all of which were tech jobs. So there are a couple of things going on here. The tech, the AI boom is happening at the same time that non-AI companies have been reducing their workforce, partly because they hired too many people during the pandemic. It's also happening at a time when interest rates are high. And venture capital, particularly on things that are not feeding frenzy type investments like AI, you know, goes down when interest rates are high. And we can see looking at different verticals within the AI, within the venture capital world, that a lot of types of companies are just not getting funding now.

And only AI, as I said in the first slide, is getting funding.

So that's another reason we're not seeing job growth in tech. The third reason is probably AI itself. that AI is being used in the tech industry more than it's being used in other industries of the economy. And so while the AI sector itself is booming, AI is allowing tech companies to do more with fewer people and is likely a contributing reason to the decline in tech that we've seen so far. So that doesn't mean we should be totally pessimistic about the future of AI. There are signs that things are turning around. But it is important to keep in mind that just because we're getting all of this investment doesn't mean we're getting a tech boom like we've gotten in the past. And where we're seeing AI's impact, I think, is a bit delayed and a little bit selective when we look across the economy. The blue line on this chart is showing quarterly office net absorption. So I mentioned over the three years it was negative. It has in the past two or three started to turn positive. according to data from CoStar. So I think that sign likely is a pendulum turning up. Just last quarter we had more than a million square feet. That's a really big number. That is like a prime, you know, tech boom number. So a lot of office leasing very recently. And the yellow line here is the number of AI investments in San Francisco. people often think like, well, that's only going to open AI or that's only going to anthropic. And they are getting a lot of that money. But there were in 2025, more than 2,500 AI deals within San Francisco for specific companies. So that is a lot of little startups getting a decent amount of money. And that's where we have seen in the past a local economic impact. I should mention that AI seems to be different and that when you get your venture capital money as an AI startup, you don't immediately run out and hire people and get office space. A lot more of that money goes to computing power, goes to data centers and equipment, which is not necessarily based in San Francisco. So the local economic multiplier of this investment is different, but it does seem to be creating some momentum. I don't think anything else is behind this upward momentum we've seen in the past year in office-based leasing other than AI finally starting to have an impact. When we look on the tech employment side, this is a look at both raw tech employment, and we only have the numbers through the middle of last year. We obviously came down quite a bit from about 230,000 jobs, and this is all of professional services and information, down to about... 200,000. So from the peak to where we are now, we've lost about 10% of the jobs. It seems to have flattened out. And if you look at the yellow line, that's tech job listings going back to 2019. That number is not bouncing back to pre-COVID levels, but it is gradually trending up. And so we are starting to see a floor and a little bit of growth in local tech job listings, which is another sign that we are starting to

a corner, I think, in the sector of the economy that is really important for the overall city's economic health.

I don't have a slide on this, but I will just mention that there's an open question as to how much runway is left in this AI boom. It is being really fueled by a few big tech companies that are spending an awful lot of money on developing models and data centers and all of the equipment and software you need to do it. And that spending is really outpacing the rate of adoption. I mean, there has been healthy adoption in AI, but it's not like everybody is using AI all the time and spending a lot of money. And so at some point, there may be a reckoning. But I think for the next two or three years at least, times will look good for San Francisco in AI. And I think for the long term, this wouldn't be attracting the level of investment it's attracting if it didn't have long-term potential. But as we've also seen with Bay Area tech cycles, they're not always a steady line. Like after the e-commerce and dot-com boom of the late 1990s, there was too much investment in startups, too much investment in fiber optic cables in a crash, and relatively slow growth for a number of years. And then by the 2010s, you know, that had been forgotten. It may be a similar cycle in AI. The city's office vacancy rate overall, we all know, has gotten very high after COVID.

It looks like it peaked in the middle of last year and has come down a little bit, as rents have also declined over the past couple of quarters.

So that is also associated with the increased office leasing that we talked about, and that trend is likely to continue. It will be a long way to go to get back to pre-COVID levels if that happens. And just a couple of points on other aspects of the city's economy. Greg alluded to the trends in hotel tax revenue being flat. This is a chart we do looking at hotel revenues in San Francisco and other cities. Our hotel revenue compared to 2019 has been around 75% of normal. And that is a very, very slight upward trend in hotel revenues. Other cities that we would benchmark ourselves against

have been much more recovered from COVID.

For largely macroeconomic reasons that are outside of our control, the city's unemployment rate has been picking up over the past year. Again, it's a slight trend. It's a little over 4% now. It was below 4% last spring. I won't go into some of the national economic concerns about a slowing labor market, but that's largely behind that. And the other thing to consider about the city's continuing recovery from COVID is downtown itself as a destination. And here the signs are continuing to look pretty good, not dramatically better. We looked at every month foot traffic with the Placer AI data, both for the number of employees visiting downtown as a share of the same month in 2019. And also visitors and both of those trends have been up the visitor trend is a lot healthier than the employee trend, but they've generally been trending up over the past year. So has muni metro ridership so we specifically look at the metro ridership to pick up downtown. We look at that every month benchmark to 2019 it's been trending up the same pattern we're seeing in part a long way to go, but generally moving in the right direction. And I think the last thing I'll talk about, because I think it is most closely tied to the AI phenomenon, is housing. It's also the area in the city's economy where we're clearly seeing the biggest change and in some sense the brightest news. Over the past year and a half, apartment rents have been growing faster, asking rents have been growing faster than almost any other big city in the United States. They've cooled in just the past few months, but the trend over the past year has been quite positive compared to like the state of California where they've been flat. And the same thing is true with housing prices. Both condo and especially single family homes in San Francisco have turned a corner and are starting to grow again. Both of those phenomenon are probably due to AI and also to a trend of people who were working remote coming back to San Francisco. It does seem like the number of people who say they work in San Francisco as their workplace has been growing faster than the number of jobs in San Francisco in tech. So that is probably a kind of, if not return to office, a return to the city so that you can return to the office more often kind of phenomenon. And when you have a tight housing market in our, you know, despite our rent reset, the housing market has been tight and you have a lot of hiring from some AI companies, that is probably driving the tightness that we're seeing in the housing market and the turnaround in housing prices as well. So as I said, AI is a very, very big national phenomenon. It's focused locally. It doesn't have a typical, you know, wave of investment effect locally, at least not yet, but it does seem to be behind a number of positive trends in the city's economy. And I do think it's got at least a few more years to go before there's a reckoning about whether there's a mismatch between investment and giving up related to AI. So I'm happy to take any questions. And obviously, Greg, you still have questions for me.

Thank you so much. Directors, I'm sure you found that as fascinating as I did. Let's take a few minutes to ask Mr. Egan and Mr. Wagner some clarifying questions. We'll reserve any board discussion about this item until later. How do I know who to call on? Very good. If you would like to ask a question, please turn your doodad up. Director Hemminger.

And just a reminder, please speak right into the mic. Thank you.

Is this okay? Just a quick question. Does the city have much exposure to tariffs? AND THE FLIP-FLOPPING ALL OVER THE PLACE THAT'S BEEN GOING ON LATELY.

THANK YOU FOR THAT QUESTION, DIRECTOR. WE DID A BIG REPORT ON THAT LAST SUMMER. AND THE SORT OF CONCLUSION OF THAT WAS THE CITY IS LIKELY TO DO LESS BAD FROM THE TARIFFS THAN THE REST OF THE UNITED STATES, MAINLY BECAUSE WE ARE A SERVICES AND INFORMATION ECONOMY And those are not the areas that are going to be subject to the tariffs. The tariffs themselves are in legal limbo. The Supreme Court is expected to decide soon whether the worst of them are lawful or not. And I don't think it's likely, frankly, that they will be declared lawful. But if they are, that could have a national economic repercussion that would certainly affect us. But I do think it would be affecting us less than other places.

Thank you. I have a question actually for Mr. Wagner. In your presentation, you spoke quite a bit about property taxes as the single largest source of general funds. It seems to me there's a lot of potential for dynamic growth there. Number one, because of new housing coming on board. And then also, I wonder if part of your thinking about that, has to do with reforms in the planning and building departments. I mean, the commission streamlining task force recommendations and generally legislation that's intended to make it easier to improve properties, which would therefore have them assessed at a higher value. how much growth do you feel is potentially in the offing in that sector?

Thanks for the question. So it's, you're correct that to the extent that there's new development or improvements on a property that adds to the rules. So to the extent that we have increased capacity for housing the rezoning or other incentives that increase development you do get a positive benefit from that the challenge in terms of what that looks like for our budget is the time horizon for those positive impacts to be felt is there's there's a lead time so new construction takes a number of years all of those things take time. What we're facing right now on the negative side is reassessments that happen as soon as those appeals are adjudicated. And because of the size of the change in the real estate market post COVID, the impact of that is likely to be more significant than the positive impact that we're gonna see at least in our five year planning rise. But there is definitely the potential for upside. You referred to it, but one of the challenges that California cities have is that under state law, once you have an assessed value, it grows at no more than 2% per year.

And historically, our citywide costs grow at greater than that value.

And you referred to the fact that if a property changes hands or there's a significant improvement, the assessed value can be updated.

But really, the dynamic is, We've got some of those positive things on the horizon in the economy, but we're still in this catch-up mode from the reset of commercial property values post-COVID.

Thank you. Any other questions from my colleagues? Very good. We will move on to the budget presentation or wait. Thank you, CFO Morder.

I AM SIGNIFICANTLY SHORTER THAN TED. GOOD MORNING, EVERYONE. MY NAME IS BRIE. I'M THE CFO OF THE MTA AND I'M HERE TO TALK TO YOU THIS MORNING ABOUT OUR STRATEGY FOR BALANCING OUR TWO-YEAR BUDGET. SO JUST TO REMIND YOU WHERE WE ARE TODAY, THIS IS ACTUALLY one of many conversations that we've had about the budget. We came before you in December to talk about ideas for generating new revenue. And then again in January to talk about ways that we've become more efficient. And also in January, we talked about how we integrate our approach to equity into our budget. But today we're going to talk about how we bring all of these things together to start thinking about how we balance the budget. As a reminder, the vast majority of our budget is directly in support of muni operations. 77% of our budget goes directly to support transit in the streets. And what that means is if we're unable to balance the budget because either one or both of the revenue measures don't pass, there is no way to balance our budget in the absence of impacting transit. I'll also note that 10% of our budget goes towards generating revenue. And of course, we would want to continue to maintain that piece of the budget of our expenditure because that's how we generate our enterprise revenues in the parking division and throughout the agency. So this chart shows you the distribution of our revenues. The most important thing to note from this chart is that in the current year, 16% of our budget is supported by federal, state, and regional relief. All of that relief, as similar to the city as Greg mentioned, will be fully depleted by the end of this year. So that means that we either need to generate new revenue to fill this hole, or we need to reduce expenditure accordingly. But the biggest takeaway is that the majority of our budget deficit is being driven by the fact that we no longer have pandemic relief to depend on. So if you look at our expenditure, you can see that the vast majority of our expenditure growth, similar to the city, is being driven by our labor costs. That in the first year is already negotiated wage increases of about 4.5% and benefit increases 5%. of about 9% that are driven by increases in healthcare. We all know that healthcare is becoming more expensive, and that is also true for the city and for the MTA. And because the majority of our budget is personnel, almost 50% of the positions in our budget are operators. That means that when healthcare costs go up, our labor costs go up. ON THE REVENUE SIDE, YOU CAN SEE THAT OUR REVENUE IS GROWING ABOUT 2% A YEAR, AND THAT MISMATCH, AS GREG MENTIONED, SIMILAR TO THE CITY, CREATES A STRUCTURAL DEFICIT. WHEN YOUR REVENUE GROWS AT 2% A YEAR BUT YOUR EXPENDITURE GROWS AT 4% BECAUSE OF INCREASES IN WAGES, HEALTHCARE COSTS, AND THE IMPACT OF INFLATION, YOUR EXPENDITURE OUTPACES YOUR REVENUE GROWTH AND YOU CANNOT CONTINUE TO AFFORD THE SAME LEVEL OF SPENDING as that same level of spending becomes more expensive year over year. What that means is the increase in our expenditure is not driven by doing new things. We're not hiring new people. We're not implementing new programs or doing new things. It simply costs us more every year to do the exact same thing we did in the previous year. So when you put these two factors together, we have a budget that starts at $307 million in fiscal year 26-27 and grows to over $430 million over the next five years. Similar to the city, over the next two years, we have an almost $700 million budget deficit that we need to solve between now and June 30th. So about over a year ago, the Comptroller's Office and the MTA convened the Muni Funding Working Group to think big ideas about how to resolve this ongoing structural budget deficit. And overwhelmingly, the Muni Funding Working Group told us, go big at the ballot, ask the voters to support Muni. And so when you look at our strategy to balance the budget over the next two years, we have a three-legged stool. And you'll note that two of the legs of the stool are dependent on revenue that would come from measures on the ballot in 2026. And the third leg of the stool is the agency's contribution either through new revenue or through becoming more efficient. How do we contribute as an agency to support both the regional and the local measure so that we're doing all three things to balance our budget? So if you look out at our budget over the next five years, you can see that in years two, four, and five, two through five, excuse me, balancing the budget comes from a combination of revenue from the regional measure, revenue from the local measure, and also the agency becoming more efficient. But you'll see in year one, because the revenues from the regional and local measure have not yet started, and the impact of becoming more efficient grows over time, we'll need to do some things next year that use one-time sources to bridge ourselves from today to when money from the regional and local measure begins to flow should they pass.

And we'll talk about that later in the presentation.

So let's start with talking about the regional revenue measure. You've all heard a lot about it, so I'll just speak very briefly. It's a sales tax measure that's being implemented across the five Bay Area counties, San Francisco, Alameda, Contra Costa, San Mateo, and Santa Clara, thank you. Sorry, I forgot what the fifth county was. It's half ascent in the other counties and ascent here in San Francisco. It's ascent here in San Francisco because As a county, we make large contributions to other transit agencies that are outside the city and county of San Francisco, like BART and Caltrain, that bring workers from the suburbs into San Francisco to do all of the economic generating activities that Ted and Greg talked about. If successful, this measure would bring over a billion dollars into the Bay Area as a whole. and would bring $155 million to Muni in particular, which is about half of the budget deficit in 26-27. So we talk a lot about the revenue that would be generated by this measure, but equally important, is the approach to efficiency that the measure requires. A lot of members of the public don't know that this measure brings a lot of revenue to the Bay Area transit agencies, but in return, it asks a lot of us in becoming more efficient and being really transparent about how we're doing that work. So let's talk about the second leg of the stool. The second leg of the stool is the local revenue measure. The local revenue measure is a parcel tax. The word parcel is a fancy way of saying geographic delineation of property. So it's a unit of property. The tax is levied on property tax owners, and it has to be levied based on something other than value because of Prop 13, you can't levy additional taxes based on value in California. And the local revenue measure was built and built in conjunction with a lot of local stakeholders to meet three basic criteria. Is it sufficient, meaning will it generate enough money? Is it equitable, meaning is what is asked of people equitably distributed among the population who will pay? And is it reasonable, meaning are we asking asking people who would pay for a reasonable amount of money given the return that they'll get on giving us their funds? So this table shows the complexity of the parcel tax measure, but I think the main takeaways are that the parcel tax will vary depending on whether the parcel is either a residential parcel, meaning somebody lives there, or a commercial parcel, meaning there is a business there. And it also varies by size. If you are larger, if you own a larger parcel, you will pay more. That makes sense and is reasonable. And also there is a cap. So that means that even if a parcel is very, very large, once it reaches the cap, it won't pay beyond that cap. So if successful, the local measure like the regional measure would generate $150 million that would go directly to support muni operations. And excitingly, at least 10 million will be dedicated towards service quality improvements at muni. So what that means is it enhances our ability to do things like hire mechanics so that we can keep our vehicles in a better state of repair so that we are hitting all of those runs and maintaining our headways and being really super reliable. So the third leg of the stool, we talk a lot about creating a culture of efficiency in the agency. We particularly talked about this in January where we gave a whole presentation on all of the activities that we've been doing as an agency. Our own efficiency culture is being supported by requirements that are coming from the outside. Both the efficiency studies that are required of us by the regional measure, it's also required of us when we report our statistics to the National Transit Database. And really, as an agency, we're working really hard to think about how we do the work that we do and ensuring that we're doing it in the most efficient possible way. As we talked about in January, our efforts are really focused in four primary categories. Are we organizing our people efficiently? Are we delivering our service efficiently? Are we using technology to maximize our people so that they can deliver their best possible work? Are we negotiating with external partners to make sure that we achieve the best possible pricing? And one that is particularly near and dear to my heart is what are we doing to increase our control and transparency so that we are not only controlling our expenditure within the agency, but also being really responsible and transparent and reporting that out to the public? So the board has given us a lot of feedback to date. I want to spend more time on hearing more, so I won't read the slide, but I just, we include this slide to let you know that we are hearing what you're telling us and we're actively working to incorporate your feedback into the budget. There are some particular things later in the presentation where we've brought some things back to you that we particularly want your feedback on based on feedback that you've given us in the past. In December, we talked about ways to increase enterprise revenues. Enterprise revenues are a fancy way of saying the revenues that we generate with our own activities. And we divided those revenues into three categories, transit, tourism, and parking. And we do that to explicitly make the point that we are asking everyone equally to share in the burden of supporting MUNI. We are asking everyone who uses all of our modes of transport to support MUNI and to pitch in, and we aren't privileging one group or another. This is really a shared burden because MUNI is a shared public good. So we'll talk a little bit briefly about the parking proposals. I think thematically there should be no major policy surprises here. These are all basically implementation of previous policies that you guys have seen before in the past, and they're sort of standard ways of doing business. And they are kind of reasonable and consistent. and also keeping with the mayor's theme of making interacting with the city easier for citizens. And the place where you can see that most specifically is in the changes that we're making to certain parking violations. We're looking at violations where maybe the price and the crime, because as we've increased the cost of parking citations with CPI over time, because we have a cap at some point, all citations reach 108, which means that every behavior that's enacted has the same monetary penalty. And from a policy perspective, it probably, if an infraction is not super egregious and doesn't really impact public safety, it probably makes sense to charge, to make the cost for this more egregious infraction higher and more matched with the policy outcome of the activity that generated the fines. And the four fines that we're proposing to reduce are listed here. We've talked about them before, so I won't spend any additional time. But I do wanna talk about our transit revenue proposals. Again, keeping with the mayor's idea of making interacting with the government simple for the public, we're proposing to simplify the cable car ticket in a way that we believe will not only make it easier for people to understand, but could also drive ridership by making cable car tickets available for the whole day. And for two Muni rides, or sorry, cable car rides, instead of just the one cable car ride, we're hoping that we'll be encouraging tourists to take Muni throughout the day and do more than just ride the cable car. Also, we're bringing the price of the ticket more in line with the cost of cable car. As a reminder, the current ticket cost is $6, but the cost to provide is over $9. And so we actually, cable car is, in this moment, cable car is a money losing venture for us. And we'd like to bring the cost of providing the service more in line with with the price that we're asking people to pay. And this is, if you'll recall in December, we looked at the price of other transit tourist assets in the world and found that cable car was actually one of the lowest priced assets. Some things like the Eye in London go all the way up to $40 a ride. I also want to talk about fare capping. Our revenue proposals are about more than just generating money. They're also about driving ridership, and we're really excited to be able to offer daily spare capping this year in the budget, which would mean that as you ride, you will reach a cap after which every ride is free. So again, kind of encouraging people once they've done those two rides to continue riding transit because they've already paid for it. And just acknowledging that people's life are complex.

SOME DAYS YOU DO MORE THAN JUST GO TO WORK AND COME HOME. YOU MIGHT WANT TO STOP AND GO TO THE GYM. YOU MIGHT WANT TO STOP AND GO TO THE BROCERY STORE. YOU MIGHT WANT TO STOP AND CARE FOR A FRIEND OR FAMILY MEMBER.

AND SO WE'RE JUST TRYING TO MAKE LUNY FIT THE WAY PEOPLE'S LIVES REALLY WORK. PARTICULARLY HERE, I WANT TO TALK ABOUT SOME OF THE BOARD FEEDBACK that we got on our revenue proposals. In particular, you asked us to come back with some additional options around cable car tickets, which we have done. And that is a place where we'd like some feedback from you today to understand how you'd like us to move forward. So we have here are showing the original staff recommendation was $15 for a ticket that we've stepped up a dollar at a time from 15 to 20 so that you can see how much more revenue would be generated with each dollar that we increase the ticket. And we'd like your feedback on that at the end of my presentation. So as a reminder, the money from the regional and local revenue measure doesn't start to flow until 27-28. So there's a big question about how we are going to solve the problem in 26-27. We're going to have to come up with one-time sources to bridge that gap. And what a one-time source means is that once it's spent, it's gone. And so you can only use it one time. This graph shows the amount of one-time sources that we're going to have to come up with in 26-27. And you can see it is significant. THANKFULLY, WE ARE EXCITED TO BE ABLE TO ANNOUNCE THAT WE DO HAVE A LOAN FOR UP TO $200 MILLION FROM THE STATE. WE'RE STILL WORKING OUT THE SPECIFICS ON THE FINANCING AND THE MECHANICS, BUT WE DO KNOW THAT $200 MILLION IS AVAILABLE FOR US. IT IS A LOAN, NOT A GRANT, AND SO WE WILL HAVE TO PAY IT BACK OVER TIME. BUT EVEN WITH THAT $200 MILLION LOAN, Our problem in 26-27 is $307 million. So the $200 million loan gets us most of the way there. How are we going to make up that remaining $100 million difference? There's three one-time sources that we can depend on. One of those sources is our reserves. As a reminder, the board policy is that we have 10% of our budget on reserve. That's $140 million. And like everything in life, there's a cost and a benefit to using each one of these one-time sources. For the state loan, as I mentioned, we're so grateful to have this $200 million available to us, but it does come at a cost. We will have to pay it back, and we will have to pay it back with interest. And because those payments have not yet been negotiated, they are not yet incorporated into our five-year financial forecast, so taking out a loan solves the short-term problem, but it does make the year five, three, four, five problems worse. Similarly, the reserves have a cost benefit. The benefit is these funds are very flexible, they're cash in hand, and they are fully within our control. The negative is that we, once they're used, according to board policy, we will have to refill them. I THINK THERE'S A QUESTION THAT, AGAIN, WE COULD GET SOME BOARD FEEDBACK ON, WOULD THE BOARD, AND THIS IS PROBABLY MORE A QUESTION FOR THE NEXT BUDGET CYCLE, BUT I THINK JUST SOMETHING TO HAVE IN YOUR HEAD AS YOU THINK ABOUT THE RELATIVE VALUE OF THIS SOURCE, WHATEVER WE SPEND OF THIS SOURCE IN THIS BUDGET CYCLE, WOULD YOU LIKE TO SEE THAT REPAID IN THE NEXT BUDGET CYCLE, OR WOULD YOU LIKE TO SEE IT REPAID MORE SLOWLY OVER, SAY, TWO BUDGET CYCLES? So we've never used this source before and so we would need some board guidance on filling the reserve. Capital funds being flexed to operating. We've combed the capital budget looking for sources that are eligible that could be used in the operating budget for a very short time. Our goal is to only flex these funds for this budget cycle. 26, 27, 27, 28, and then return to business as usual once things are more stable in the next budget cycle. The pro here, again, is that the funds are very flexible and they're completely within our control. The con is that they come at a sacrifice of an opportunity cost of things that we are not doing in the capital budget. And those things that we would do in the capital budget are often things that reduce our operating costs in the long run. example if we don't maintain a vehicle that vehicle becomes more costly to run over time and then the last item we have is when we are efficient and we're able to spend less than we generate just like if you spend less than your paycheck that money goes into your bank account and stays in your bank account for us that goes to our fund balance and we do have an accumulated fund balance and we could use up to $50 to $85 million of that to solve that year one problem. So the question that we'd like to ask the board today is which of these, to make up the remaining difference between the $200 million in the state loan and the $307, where would you like us to be leaning in and where would you like us to be leaning away from the reserve, the one-time source, and the capital?

Oh, here's a table that shows all the trade-offs I just talked about.

Okay, so here's a reminder of our five-year budget deficit. We talk a lot about the year one problem being 307, but it is really important to remember that because expenditure grows faster than revenue, the problem gets worse over time. So just because we solve it in 26-27 doesn't mean that we're done solving it. It's sort of like our down payment on a long-term investment. And that is where we come back to that culture of efficiency is that everything that we do in the short term that makes us cheaper in the long term or makes us operate more efficiently and effectively in the long term helps us solve this problem. And here, this is showing you our deficit numbers and the contribution that the regional and local measures make. But then when you look at the bottom row, you'll see that $290 million that we need to solve in year one. The state loan is not shown here because that just came together Friday. And then if you look at the bottom row from 27-28 to 30-31, when you see that 39-102, that's the problem that we need to solve over the next four years. BETWEEN NOW AND YEAR FIVE, BETWEEN NOW AND YEAR FIVE, BETWEEN NOW AND YEAR FIVE, WE NEED TO EITHER COME UP, WE NEED TO EITHER COME UP, WE NEED TO EITHER COME UP, BECOME $100 MILLION BECOME $100 MILLION BECOME $100 MILLION MORE EFFICIENT, MORE EFFICIENT, MORE EFFICIENT, OR IDENTIFY WAYS TO MAKE OR IDENTIFY WAYS TO MAKE OR IDENTIFY WAYS TO MAKE NEW REVENUE TO THE TUNE OF NEW REVENUE TO THE TUNE OF NEW REVENUE TO THE TUNE OF $100 MILLION. $100 MILLION. $100 MILLION. BUT THE GOOD NEWS IS, BUT THE GOOD NEWS IS, BUT THE GOOD NEWS IS, BECAUSE WE'RE TALKING ABOUT NOW, BECAUSE WE'RE TALKING ABOUT NOW, BECAUSE WE take the long view when we're making our decisions today.

So our next step, the budget is far from done.

We have a big milestone that's coming up in about two weeks. where the state is going to be announcing our state operating revenues. So I do want to make clear that these numbers are going to change because one of our major revenue sources, we're not yet clear on how much money is going to be available to us. And what we are hearing from the state is that we could expect revenue decreases of up to 30%. So this is something that makes, THIS BUDGET BALANCING QUESTION, UNFORTUNATELY, HARDER, NOT EASIER. ALSO, WE ARE, NOW THAT WE KNOW A LITTLE BIT MORE AND ARE MOVING TOWARDS CONCLUSION ON THE STATE LOAN, WE'LL BE ABLE TO INCORPORATE OUR STATE LOAN RETAINMENTS. WE'LL BE ABLE TO INCORPORATE THE EFFICIENCY AND THE REVENUE PROPOSALS THAT WE'VE TALKED ABOUT AT PRIOR MEETINGS. THIS DATA WAS ALL GENERATED PRIOR TO THE MOST RECENT GENERAL FUND FORECAST, WHICH HAPPENED IN DECEMBER. SO WE'LL BE INCORPORATING THAT INFORMATION AS WELL. GOOD NEWS THERE IS THAT WE ARE SEEING CONSISTENT WITH WHAT GREG SAID ABOUT HAVING SOME MODEST IMPROVEMENTS IN THE CITY'S REVENUE. WE ARE SIMILAR SEEING SOME MODEST IMPROVEMENTS IN THE GENERAL FUND TRANSFER THAT WE GET FROM THE CITY. Unfortunately, it's nothing like 15% growth that we saw back in the heyday of the first internet boom, but 2% growth is nothing to sneeze at, and we're very grateful for every dollar that we get. And once we incorporate all of those things, we'll be coming back to you in March with a more detailed balancing plan that shows more specifically how we're gonna balance the budget across all of the categories that we've talked about. So today, things I'd particularly love to hear from you are what are your big picture questions that you still have in your mind that we need to respond to? Are there, do you have new thoughts about the revenue proposals we made in December? In particular, what's your response to the information that we're providing about cable car tickets? Are there any, is there anything from the efficiency presentation in January that you'd like to highlight or express concerns about? And especially, how would you prioritize the use of those one-time sources? THAT WE TALKED ABOUT. AND NOW IT'S TIME FOR PUBLIC COMMENT.

THANK YOU, CFO MAHORDA. I WILL NOW OPEN PUBLIC COMMENT ON THIS ITEM FOR TWO MINUTES EACH.

Members of the public wishing to provide comment will have two minutes each. I will warn you when there are 30 seconds left and when time is up. I do have a couple of speaker cards, Joel Kamischer, Paul Slade, and then for any others, we can start to queue up in the main aisle. If you could turn on the mic. First speaker, could you please turn on the mic? Anyone ready to speak now can go ahead.

Yes, I'm a retired muni operator, and I live in the Richmond District. And I know a lot of people in the business community. One man rides the muni to work. He's a bar owner. And he asked me, Paul, you were a muni operator. How come people don't pay the fares? Now, when I was an operator, it seemed like the revenue out of the fare must have been higher. I ride the 38 a lot. I don't see a lot of people paying the fare. In fact, there are signs on the buses now encouraging people to pay the fare. So he wanted me to bring that question up. Is immunity getting enough money from fare revenue? That doesn't mean it's gonna solve all the problems, but it's symbolic to people. Thank you.

Thank you. Next speaker.

Good morning, Chair Tarloff and directors. My name is Jody Medeiros and I'm the Executive Director of Walk San Francisco. We are the nonprofit that works for keeping streets safe for all pedestrians. The SFMTA for Psych Aid Vision Zero is making a real difference. It's working. And we could really be at a turning point and finally seeing a drop in severe and fatal crashes. But we all know that so much work does remain to be done. And we have been asking the agency to really double down and bring solutions citywide. Mayor Lurie and the entire Board of Supervisors strongly support this through the Mayor's Executive Directive and the Street Safety Act. That's why it's really difficult to hear today that $40 million from an already underfunded capital budget could be flexed to operations, and this could be putting people's lives at risk. We know the agency is going through unprecedented financial challenges and faces very difficult decisions. We also know that muni service is vital to keeping our streets safe and achieving Vision Zero. But this is a dangerous trade-off and a precedent for the SFMTA to make because street safety projects are so cost-effective, crucial for all of us to get around San Francisco. If this happens this one time, there needs to be great transparency and commitment that come with it. We would have loved to have seen the list of street safety projects that wouldn't happen with this flexing capital fund.

30 seconds.

MTA must find ways to bring greater efficiency to projects of the Department of Public Works when doing repayment projects so we can see complete streets improvement every single time as asked for the Street Safety Act. Our safety should not be compromised and we're looking for you to keep this front and center.

Thank you.

Thank you. Next speaker.

Good morning, Directors. Good morning, new Director Felder. My name is Rick Lobsher. I'm the president of Market Street Railway, Muny's supporter and advocate for the cable cars and historic street cars, all your historic operations. Here to talk about cable car fares. The proposal being made here says simply simplify cable car revenues. We agree that some of these extra day passes and things like that can easily go. But your staff statistics show that the one day pass is popular, yes, but The single fare is much more popular, and this proposal would essentially take it away. Under this proposal, if you want a single cable car ride, you'll pay 67% more than you do now, $15 instead of $9, but you'll have to buy that all day pass. If you're a San Franciscan that just want to ride up the hill to get dinner or go home from work, and you don't plan to take another community ride that day, you'll pay $15 instead of $9. If you're a family of four going to the wharf, you'll pay $60 instead of $36 if you just want that one-way ride. And by the way, yeah, it's great to take a round trip on a cable car, but often you have to wait an hour, an hour and a quarter to get that cable car back. So time is very precious to visitors. Every other muni mode offers a single fare. We believe taking away that option for cable cars will drive down cable car ridership and not really deliver the revenue that's being talked about here. Now, that incremental revenue, we think, could be better realized in a number of other ways, including perhaps not cutting some of those parking tickets so deeply, which just encourages more illegal parking anyway. I know that's true on my block. Or just raise the current cost from 15 to 16, as shown here, and keep it where it is now. Please give this careful consideration. Thank you.

Thank you. Next speaker.

Good afternoon board griffin Lee here just to resident and also staff are connected SF. You know I a lot of these changes here are proposed changes are are very minor. I think we got to think be thinking a little bit bigger and a little bit more creative which brings me to i've done a lot of research and investigation on. ways to potentially shore up the budget. part of it at least. And I would hope the board comes to me at some point throughout today to ask me about a loophole I have found to shore up part of the budget potentially. As a staff and a resident, we're supportive of beauty and understand the theme of it's the heartbeat of San Francisco. And it's a big, big contributor to what we'll bring back downtown and office employees back to the office. But the reality is there needs to be more cutting. My solution, if you come to me later today at some point, will not actually be a cutting type solution, but again, a loophole that I have found that would not necessarily put the as much burden as you guys are proposing on the backs of San Francisco residents. Thank you so much.

Thank you. Next speaker. Thank you. Good morning. This is Peter Strauss. A couple of things. First of all, I have a concern with some of the numbers, Bree, that you presented on the projections. on the revenue measures. The graphs in particular look like they are constant for successive years. And for the local measure, that seems to be reflected in the chart as well. Something that, I mean, sales tax naturally grows with inflation. But something that we, the advocates, fought hard for and that is going to be baked into the parcel tax measure is growth with inflation. And that does not seem to be reflected in your chart. And clearly, it's the intent that... that then enable the revenue from the measure to grow and lessen the increases in what the agency needs to cover from year to year. I'd also like to voice my strong support for Rick's comments concerning the cable cars. I could talk a lot about those, and perhaps I'll add some more later. I think the approach to the cable cars has been almost predatory at times over the years, and I would urge the agency to get away from that. The comparison to things like the Ferris wheel, you know, is not appropriate because we really want people to be able to use the cable cars for general transportation and for multiple trips, not just, you know, ride once and then it's too expensive to return. So that's something we need to be sensitive to. I hope to return to this later, but I would ask the board to really think of the cable cars as their transportation purpose, not just as a tourist driver. Thank you. We've also learned over the recent years that we cannot take anything for granted, not even our tourist revenues. And we as San Franciscans, you know, have always liked to take tourism and tourists for granted. That's not something we can afford to do.

Thank you. Next speaker.

Hello, board. I'm Dylan Fabris with San Francisco Transit Riders. Yeah, I support a lot of what has been said and also like to to reiterate some of the stuff I said last time, a lot of this is brought forward. I think there are some really good changes in here, really good parking changes in terms of the meter rates. I think that, of course, could and should go further. You know, the Sunday evening metering was approved way back in 2020, so it has not been implemented and could generate millions if implemented. passing through credit card fees, fare capping, all of these are great things. Also concerned with the high cost of the cable cars, also agree that the London Eye is not a good comparison. Better comparison may be the London Cloud Cable Car, which is seven pounds for one trip. I think that we should be thinking about ways to keep the cable car affordable, especially for folks in the Bay Area. folks coming down from Vallejo or Sacramento. He'll be coming from other parts of the region for a day trip. I worry that a high cost for a family for the cable car could actually price folks out of opting into that as part of their trip here in San Francisco. Generally, like the one-time sources, I'm glad to see the reserve is on the table this time around. But we need a lot more clarity on what flexing capital funds to operations means. That can't come at the expense of street safety projects. I've said before, like the second you step off a bus, you become a pedestrian or you become a bike rider. And we really need to make sure our streets are continuing to get safer for folks both on the bus and So we'd really like to see that broken down. What does that exactly mean, flexing capital funds to operations? If we can do that in a way that doesn't impact street safety, that would be great.

Thank you. Your time is up.

Thank you.

Next speaker.

Yes. Hi. Good morning, directors. My name is Karen Flood. I'm one of the owners of the Flood Building. We've had the building and our family for four generations and are very proud of our building. Love San Francisco. I understand that you spend a lot of time on these presentations. I appreciate your entire situation here. I get it. Transit is critical to San Francisco. It's critical to downtown recovery. But one main question and then one smaller comment. My main question is understanding how you came up with the different tiers of payment. Like I understand that you need to, everyone needs to pay their fair share and it needs to be fair. But I want to, I mean, Downtown buildings have been hit hard during the pandemic. Buildings are empty. I mean, you said it in your presentation. They're all asking for appeals. Many property owners are. So I just want to understand how you came up with those tears because downtown recovery is really fragile. And, you know, obviously we're one of the larger buildings, but, you know, we've taken a hit. in terms of revenue in so many buildings are. So I want to understand, was BOMA involved? Has the chamber been involved in kind of weighing in and how that impacts the rest of downtown recovery?

Because I think that's really important.

And secondly, you know, we love the cable car. Obviously, it's at our front door. And, you know, as a resident here in San Francisco, I love hopping on the cable car and just going up to Knob Hill and paying my $9 or what have you. Same with residents from the financial district, hopping on at 15th. you know, I'm just going to think twice about doing that, you know, and that's that. And also, the cable cars got done. It gets backed up at the cable car turnaround. That's a separate issue, but it shouldn't be backed up. It should be moving every eight minutes so we can all hop on.

Thank you. Thank you. Next speaker.

Howard Wong with Save Muni. I think it's very important to continue the coordination of regional transit agencies, the 27 transit agencies and 141 transit-related organizations have had much more cooperation in the last few years than ever before. I think the riders and boaters appreciate that type of coordination and the more connected Bay Area transit, but not only the better The ability to move around the Bay Area, but also the efficiencies that cooperation integration can achieve, not only in purchasing power, operating equipment, maintenance, all the things that we see in metropolitan transit coordinated agencies. The state of Illinois, we should always remind people there are many, many ways that cities, states, provinces, countries fund transit. Illinois' recent $1.5 billion transit fund included shifting of gas and fuel taxes, toll road taxes, and other funds to transit without any tax increases. or without any ballot measures to increase taxes. So it's important to educate people that other countries fund transit in a very long-term way. Anyway, it's also important to encourage transit ridership. I think Julie Kirschbaum has gone to the west side of the city. There's a lot of staff moving around and talking to people. We want to see more transit ridership as a fundamental basis for support for the ballot measures and also to have a, you know, increase the long-term funding. I'm a lifelong muni rider and I wouldn't ride anything else. I don't drive as much as I used to. People just want you to, you know, bolster muni and make it look like a real bio.

Thank you. Your time is up. Next speaker.

Hi, directors. My name is Lucas Villa. I'm with the Ever Beloved Coalition on Homelessness. My primary role is as an organizer of street homeless folks, and that includes RV residents. And there was some reference to this in the presentation of if one or both revenue ballot measures fail and having towing and fees and ticket waivers be cut. And I know that was assessed and thankfully correctly discarded as an option last budget cycle. If these fail, these revenue measures fail, please do not cut the fee waivers. The BLA report that went to the Board of Supervisors that was discussed last week at the Budget and Finance Committee cites that the $9.7 million that does account for the cost of these waivers could somehow be made up if we cut those waivers. That's nonsensical. That assumes as though the low-income and homeless folks, unsheltered homeless folks that cannot afford the tow fee will be able to pay the full amount to recoup their vehicle. That makes no sense. And again, just to emphasize, SFMTA pays these fees to the vendor for every tow performed, regardless of whether the agency collects revenue from the vehicle owner. So please do not put this on the backs of the most vulnerable among us. I know that you passed the large vehicle refuge permit program. I have updates on that as well at a different time. I would encourage folks to reach out, not just through staff of MCA, but to advocates as well. I can tell you that a lot of vehicle residents in the city have not been served by that program and have had major bureaucratic concerns.

Thank you. That is not on today's agenda.

Okay. Sounds good. So I'll skip that. But I appreciate it.

Thank you.

Again, we need to not be balancing the budget on the backs of the lowest income folks in our city. I just also want to highlight the survey results that MCA did. Maintaining reduced fares for seniors and low income residents, 70% of survey respondents said that was either very or extremely important. That should also, that should get in our brains that folks do not want to see us balancing the budget on the lowest income among them.

Thank you. Speaker.

Morning, Board. My name is Steve Martin Tinto. I'm a frequent duty rider, also a firefighter here in the city. And I sit on the department's transit committee. And I'm also an instructor at the SFMTA Transit Operator Academy. A couple of things I want to mention is I think more emphasis needs to be placed on cleanliness, station cleanliness, bus stop cleanliness. I use the 49 Van Ness. fairly frequently, and oftentimes I see the bus stops being overtaken by people using drugs, which discourages passengers from using uni even before they start. So I want to bring that point up. Also, if we can consider if there's a way to redirect capital funds towards operations, I think that'd be a good move. And we've spent so much money on these projects like the Center bike lane just to tear them out. Kirkham Street and Necktown, which I think is going to be torn out again pretty soon. So other Vision Zero projects as well. In the past, we've had Vision Zero for quite some time now, and it has not made any measurable impact on pedestrian safety. There has been no decrease in pedestrian and bike fatalities due to Vision Zero ever since its implementation. Let's spend our money where it's going to be better used, more worthwhile, so we can redirect capital, budget, funding towards operations. I think that's the best use of funds.

Thank you. 30 seconds. Thank you. Next speaker.

Hi, my name is Zach. I am an RV resident, community organizer, member of the End Poverty Toast Coalition. I'm a busy, busy bee, I guess. So I'm here because I heard a nasty rumor that the poverty tow subsidy and tow waiver might be on the chopping block to help balance the budget. The amount of money on this, looking at the deficit the MTA has, that would negatively impact very poor people would be a drop in the bucket compared to what funds that the MTA has to recover. As of today, the LDRP data is that 15 people under the LVRP program have been housed, but there have been 101 towed. That means a total of 74 people have been displaced by their home and into worse positions. There's one gentleman I have met who is living in the Mission on the street who had his RV towed with the LVRP permit right around the, I know you're ready to jump in, but I'm just highlighting the harm that this towed, and in a towed way we could have a problem with. So he has been on the street because he has not been able to recover his RV from a tow yard for the past few months. So please protect the RV tow waivers and the subsidies for people who are living in their RVs. Thank you very much.

Thank you. Next speaker.

My name is Dante Vickers, local 1414 business rep. I've been living in the city for 57 years. I started off here at working in the city as a mechanic for ADM. I used to work on all the fire trucks. Then I went to Woods, worked on the maintenance over there, building engines, transmissions. So now I'm a business rep. So recently the public was told that proposed funding, including the parcel tax, would allow the agency to hire more mechanics so buses could be better maintained. That statement matters because today the numbers do not align with the commitment. The agency had approximately 185 allocated MECHANIC POSITIONS YET ABOUT 143 ARE CURRENTLY FIELD. THAT MEANS WE ARE OPERATING MORE THAN 20% BELOW PLANNED STAFFING, WHILE AT THE SAME TIME EXPECTING THE MECHANICS TO WORK FASTER, TAKING ADDITIONAL DUTIES, AND KEEP MORE VEHICLES ON THE ROAD. FROM A SAFETY AND MAINTENANCE PERSPECTIVE, THAT IS NOT SUITABLE. BUS MAINTENANCE IS NOT WORK THAT CAN SIMPLY BE SPARED UP WITHOUT CONSEQUENCES. IT INVOLVES INSPECTIONS, DIAGNOSES, Preventative maintenance, compliance with safety standards. When staffing is short, the burden shifts to overtime, fatigue increases, and the risk of errors rises. That puts mechanic operators, passengers, and the public at risk. Understaffing also leads to maintenance backlogs, more roll calls, and service disruptions, which frontline workers are then blamed for despite the structural staffing shortfall. Thirty seconds. IF THIS BOARD SUPPORTS FUNDING MEASURES ON THE BASIS THAT THEY WILL IMPROVE MAINTENANCE AND RELIABILITY, THE STAFF MUST MOVE TOWARDS THE ALLOCATED LEVELS THAT ALREADY ACKNOWLEDGE WHAT THE SYSTEM REQUIRES. YOU CANNOT SAFELY MAINTAIN A GROWING, AGING FLEET BY ASKING FEWER MECHANICS TO DO MORE FASTER, TO WORK FASTER. I RESPECTFULLY URGE THE BOARD TO ALIGN PUBLIC COMMITMENTS with operational reality by prioritizing the hiring and retention of mechanics to meet allocated staff and reduce safety risk and deliver the reliable service the public expects. Thank you. Thank you.

Any other speakers for this item?

Good morning, everyone. Marie Rabiel from ConnectedSF Institute and ConnectedSF. I am quite stunned at what we're presenting as the budget. I've been very engaged and involved, and I think we all know there's a lot more that could be cut and that needs to be cut. We all want to save Muni. And what I'm seeing is a lot of playing with different buckets. Last year at this time, the allocation in the budget to transit was 54%. Now it's 77%. That tells me that there's some playing with the budget in the background in order to try to load everything into Muni so that you can claim that this is necessary for Muni. I was in a working group meeting in this room last year when one of the directors said to a staff member in a breakout group, we all heard it, let's not focus on what we can cut, we have an opportunity with this $300 million deficit to get more. That is not focusing on the public. That is not doing the public favors. That is not stewarding this organization responsibly. You have a $1.4 billion budget. You already get $500 million from the general fund. Every single thing we saw on the screen today is concerning to me the one-time funds create a loan that has to be repaid with interest later so that's more money that we have to spend going forward what needs to happen there needs to be cuts you need to focus on reality there needs to be a massive massive not this a massive retreat where you go figure out and talk to the experts what is happening in the city what kind of transportation are people using? What helps you do your job of moving people and goods most efficiently and effectively? Thank you so much.

Thank you. Any other speakers for this item? Seeing none in the room and no accommodation requests.

Thank you, public comment is now closed. Colleagues, I would like to call for a 10 minute break before we move to board discussion on this item. And thank you very much for your attention so far. We'll reconvene at 10 past the hour. A LOT HERE. I HAVE A COUPLE OF VERY QUICK CLARIFYING QUESTIONS BEFORE I KIND OF GIVE MORE GENERAL DIRECTION. CFO, I BELIEVE THERE WAS POTENTIALLY SOMETHING THAT WAS MISSTATED REGARDING THE CABLE CAR TICKET PRICE. YES.

I RECENTLY TURNED 50, SO I CAN NOW LEGITIMATELY SAY I HAD A SENIOR MOMENT. I said that the cable car ticket was six and the cost was nine. In fact, the cable car ticket is nine and the cost is 20. Sorry about that.

Great. And then also I heard a question in public comment that didn't jive with something that I understood, which is the indexing for the parcel tax, is that slide 41?

Yes. Those numbers are indexed and they are tied to the Bay Area CPI. Okay.

And they go from 150 to 159 over the five-year period. Okay, so that would be an important concern, but that is not correct. That is not a concern, correct. All right, so let me see if I can organize my thoughts here. This feedback that we're about to provide to staff will be a really important part to the next steps. provide feedback later than this stage, it will be much more challenging for the staff to respond to us in a timely way and for us to complete this budget work against the very real deadline that we've got before us. So this is our moment to shine. So I think these questions, the requested FEEDBACK ARE REALLY HELPFUL FOR US TO LOOK TOWARDS. BUT I, TO SUMMARIZE THEM IN A VERY BLUNT WAY, I THINK THE STAFF IS LOOKING TO UNDERSTAND DO WE GENERALLY AGREE WITH THE RECOMMENDATIONS THAT THEY ARE PROVIDING TO US TODAY? AND IF THERE ARE POINTS OF DISAGREEMENT, WHAT ARE THEY? LET'S BEGIN ADDRESSING THEM RIGHT AWAY. JUST A COUPLE OF SUGGESTIONS FOR US. AS WE LOOK AT THE REVENUE SUMMARIES, THE SUMMARY OF THE NEW REVENUE OPTIONS, THAT IS SLIDE 30. SUMMARY OF EFFICIENCIES THAT ARE BEING PROPOSED ARE ON SLIDES 27 AND 28. SO IF YOU WANT TO LOOK AT THOSE, YOU KNOW, WITH MEMBERS OF THE PUBLIC AS WE GO ALONG, THAT MIGHT BE HELPFUL TO YOU. AND ALSO, VERY IMPORTANTLY, IF WE COULD MAYBE, WELL, JUST TO WE'LL KEEP THIS SLIDE UP WITH THE REQUESTED FEEDBACK AS WE GO ALONG, JUST SO THAT WE CAN, YOU KNOW, KEEP TRACK OF WHAT WE ARE DOING HERE. BUT IT'S, especially important for leadership to understand how we feel about the direction that we want to go in terms of one-time revenue to shore up so we WE'LL HAVE THE $200 MILLION FROM THE STATE LOAN AND THE DELTA OF $100 MILLION, HOW WE'RE GOING, HOW WE AS A BOARD WOULD LIKE TO FILL THAT IS WHAT THEY'RE LOOKING TO HEAR TODAY. AND ACTUALLY, CAN WE PULL UP SLIDE 38? SO, ACTUALLY, I THINK SLIDE 39 So these are those one-time sources and the trade-offs as they've been summarized for us. We're looking to make a hundred million as I mentioned. So I think we could easily spend all of our time discussing

BEFORE WE TAKE A BREAK FOR LUNCH. BUT I'M SURE WE'LL GET INTO OTHER TOPICS.

BUT THIS TAKEAWAY IS PARTICULARLY IMPORTANT FOR THE STAFF TODAY. I THINK THAT IS EVERYTHING I WANTED TO SAY TO SET UP OUR DISCUSSION. AND I'M LOOKING FORWARD TO HEARING FROM ALL OF YOU. DIRECTOR HINSEY.

All right. Thank you, Karen. Thank you for that framing. And I'm happy to sort of kick us off. And I guess.

Pause for a moment. We're having an audio problem here in the room.

No problem.

Can you test one more time?

Testing, testing. Oh, okay.

Okay, please.

All right. No problem. And thank you for that framing. And I did have a couple clarifying questions, one of which I think, Chair Tarloff, I think you just clarified, but CFO McWhorter, so our total deficit that we're solving for in this budget is $300 million. So assuming that we borrow... say 200 million from the state, are we looking to solve a 100, would we be looking to solve that a 100 million deficit in one time savings?

Thank you for that question, Director Hinze. So we've already presented you with about $8 million in revenue for year one and about $20 million for year two. And then we're looking about $20 to $30 million in efficiencies for each of the two years. So I think that that 100 is probably more like 70 in this moment. But as a reminder, we haven't yet gotten our state revenue, our revenue forecast for our operating grants yet, and those are expected to be lower than originally anticipated. So at this time in the cycle, I try not to be too specific about an exact dollar value because many numbers are still coming in. So I would say it's in the range of 75 to 100.

Yeah, okay. I was fishing for an exact number, so thank you. And then my other clarifying question before I get to some feedback is... And let me know if this is a question before we get into the CIP discussion. There was a question in public comment about if the flex funds would affect what would be in the street CIP. Would you like to speak to that a bit to clarify? Okay.

Sure. So we're still in the CIP development process, but when you compare the livable street CIP with the prior year, the dollar values in the CIP are actually consistent year over year. And if you also include the money from the geo bond, they're actually a little bit more than prior year. We're investing consistently CIP over CIP, but there is, of course, everything is an opportunity cost. When you spend $1 on something, you don't spend $1 on something else. So did that answer your question, Director Henze?

Yes. When you say geobonds, do you mean a 2026 geobond or the one that passed in 2024?

2024.

Okay, got it.

Director Hinzey, the other thing that I would add as you all think about the shifting from capital to operating, unless we receive different direction today, our working assumption is that we would do it across programs. While we do want to make sure that we protect our investment in street safety and prioritize the work plan that you all reviewed last month. We also don't wanna disproportionately impact transit infrastructure, traffic signal infrastructure, some of our other programs. So that is something that it would be helpful to give feedback on today. Our kind of working assumption is that we would look across programs and not specifically focus on just a single program when trying to do that shift.

Excellent. So in terms of some feedback, cable car, for me, I don't know if cable car, like what I don't know and what probably staff doesn't know is, whether cable car demand is inelastic it would be it'd be great it'd be great if it was but we don't at this point we don't know that um and so i would uh stick um for for now at staff's current proposal of um $15 and maybe try $16 or $17, but right now I'd stick at $15 just because we don't know how cable car demand will be affected. In terms of how to bridge one-time funds, assuming we are looking for about $70 to $80 million, I have previously been on the record when it comes to using the reserves. I've been hesitant to do it because of, for me, there would always be a time when we would really need the reserve. But of the options that we've got, it isn't our control, which is appealing. And so I would, I think, support using a partial, I think staff had a plan where they would flex 20 million from capital and use some reserves and uh have some also one-time fund balance um and cfo mahorter i know we talked about this yesterday do you happen to have do you happen to have a number about what our fund balance is at the moment or did i miss that scrolling past

So, as a reminder, the fund balance is like a checking account. It varies daily depending on, you know, like the day after you pay your rent, your fund balance is a lot lower. The day you get your paycheck, your fund balance is a lot higher. But our fund balance has been averaging around $100 million this year.

Yeah. To me, our fund balance is... probably our most flexible source of one-time funding. So I would support a plan that combines the fund balance, a little bit of reserve just because it's in our control, and flexing just probably around $20 million from capital. All right. For now, Madam Chair, I believe that's it. I'll set the table for you.

Thank you. I do appreciate that, Director Hinze. And you reminded me that another point of clarification with the use of the reserves, it is currently the policy, that's my understanding, it's currently the policy of the board that those reserves, if they are depleted, must be replenished in the next budget cycle.

We've never used the reserve before. So the reserve policy technically says the agency shall maintain a reserve of 10%. But if you interpret that word for word, the day you spent $10, you have to return the dollar the very next day. So that doesn't make a lot of sense. So the way that I would interpret it would be that we should refill it at the next budget cycle as part of an action in the next budget cycle. But I would defer to the city attorney if she has any other thoughts. She's nodding her head yes and proclaiming my brilliance.

I would just say, sorry, it's Deputy City Attorney Susan Cleveland Knowles. Yeah, I would agree with the CFO. It is your policy. So at the time that you decide to use, if and when you decide to use your reserves, you can establish a superseding policy as to the schedule that you wish the CFO to plan to replenish the reserve. So I think if you decide to use the reserves, there should be a question about how you plan to replenish them and on what timeline. But given it's just a board policy, you can adopt that policy at the time you adopt the budget.

And, you know, just to highlight that, you know, from among the one-time revenue options that we have, this is one that does not have an associate. There are costs to it, certainly, but there's not a, there's no interest payments or anything like that for, yes, that is correct, right? And then the other thing, Director Hinzey, that you reminded me is that, in particular, the issue of the cable car would be really helpful to specifically hear from directors how you feel about the cable car price. If you have an actual price in mind, as Director Hinzey did, that's fine, or just a general feeling.

about what direction we should be taking with regard to the price of the cable car.

Director Hemminger.

Let's see if I can make the microphone work. Can we go back to the one time sources slide?

That'll do right there.

So I just wanna make sure my math is working. The state loan is 200 and our deficit is 300. So that means we need to find 100 more, right? And why couldn't we split that between the reserves at 50 and the one time savings from previous cost controls at 50? Would that work?

We could do that. That is exactly the direction that we are looking for from the board.

Okay. Look, if we could avoid flexing money to operations, I think we should. It's a very bad management practice, and it's sort of like heroin. Once you're hooked, it's hard to get unhooked. And so I would encourage us to avoid that. And especially if we have a relatively modest hit to the reserves and cost control savings, I think those are in the order of things a little less harmful. As you pointed out, Bree, it's cost and benefit. So that's what I would say about that. As for the cable cars, I wanted to go back to your numbers again. So the cost and the revenue is what?

A ticket is $9 and the cost per ride according to our NTD data is just above $20.

So what would be the number, how high would the fare have to go to make that break even?

$21.

Whoa. Well, that's probably a little bit too much of a jump. Look, we don't wanna look like we're gouging folks, but I think if in fact that is the delta, I think there should be a way to push it a little bit higher. Because we would still end up subsidizing the folks who use that. And as long as we're driving toward a smaller and smaller subsidy, I guess that could be our goal. And then finally, and I haven't heard any discussion about this one at all, and maybe it's just because I grew up in Ohio where we don't know what curbing your wheels is. But here we do, and my understanding of this penalty, this infraction, has always been a safety matter. And if you haven't seen a runaway car, it's a really scary thing to see, especially if you're sitting in it. So I wonder whether we've consulted with the traffic engineer about the safety consequences of, I guess we're reducing the infraction. Is that what the proposal is?

We are recommending based on the number of complaints and protests we get on this particular one. I think all San Franciscans are well trained on a 15% grade to curb their wheels. The state law is something like 3%. And so it's those more subtle areas that I think we build up the greatest frustration. THE OTHER THING THAT WE ARE ALWAYS TRYING TO DO IS SET THE FINE AT THE LOWEST RATE POSSIBLE TO CHANGE BEHAVIOR. AND IN THIS CASE WE DO THINK A MORE MODEST DOLLAR AMOUNT WILL STILL PROVIDE THE EDUCATIONAL TOOL. Again, this is an area that we are looking for feedback on. We're bringing it to you based on some of the complaint data as well as what we're hearing when we're out talking to community members. But it's really the board that should weigh in.

Any questions about it at all? Any kind of conversation?

GOOD MORNING, CHAIR TARLOFF, MEMBERS OF THE BOARD OF VICTORIA WISE STREETS DIRECTOR. I DID DISCUSS ALL OF THESE CHANGES AT MY EXECUTIVE TEAM MEETING WITH EVERYBODY, MY PARKING CONTROL OFFICER, CITY TRAFFIC ENGINEER. WE DID TALK ABOUT IT. AND I THINK AS THE DIRECTOR KERSHBAUM JUST EXPLAINED, WE REALLY WANT TO FOCUS ON BEHAVIOR CHANGE. AND WHILE ABSOLUTELY YOU'RE RIGHT, IT'S VERY SCARY WHEN IT HAPPENS, IT IS QUITE RARE BECAUSE STEM ASSISTANTS ARE TRAINED PRETTY WELL TO CURB THEIR WHEELS. AND SO WE'RE JUST TRYING TO MATCH UP KIND OF LIKE make it an educational tool. And there are absolutely safety violations that we think are much more serious. And so we wanted to balance the price of those compared to the wheels.

Thank you, Madam Chair.

Director Tarloff, if I could clarify one thing. As a reminder, the price of a single ride ticket is $9. But what we're proposing is, and there's also a one-day passport, a seven-day passport, a three-day passport, a seven-day passport. There are many options. And what we're actually proposing is the creation of a new fare that would be all muni services all day. So that way, as it's structured now, if you ride out to the cable car station terminus, now you're in North Beach and you've paid $9, but to get back, you have to pay $9. So what we're proposing is not just an increase in cable car, but a difference in the way that we think about cable car, so that you're thinking about it from the perspective of a ride there and back. And also, how did you get to the cable car terminus? maybe you are staying in the avenues and you took the light rail. And I also want to point out in response to a public comment that cable car is included in a monthly pass. So if you are a resident who has a monthly pass and cable car is part of your daily commute, this proposal would have zero impact to you. You would CONTINUE TO BE ABLE TO RIDE CABLE CAR AS PART OF YOUR MONTHLY PASS. SO HOPEFULLY THAT WILL ALSO INCENTIVIZE PURCHASES OF MONTHLY PASSES, WHICH INCENTIVIZE, WE BELIEVE INCENTIVIZE RIDERSHIP.

THANK YOU FOR THAT CLARIFICATION. DIRECTOR HENDERSON.

THANK YOU. I HAD A COUPLE OF QUESTIONS BEFORE THAT I think we're covered, but I do want to go back real quick to the conversation that you had, Bri, around the THE MILESTONE THAT'S COMING IN TWO WEEKS FROM THE STATE. SO YOU SAID IN TWO WEEKS FROM THE STATE, THERE WILL BE OPERATING FUNDS THAT COULD POTENTIALLY BE 30% LOWER THAN PREVIOUS OR EXPECTED. AND SO THEN IF WE, HOW DOES THAT CHANGE THE DEFICIT? THAT MEANS THAT FOR A 540, YOU HAVE 307 AND THEN 344. WOULD THAT INCREASE OR, make the number, the deficit bigger?

Yes, I haven't seen the numbers yet, but I'm anticipating that it'll make the deficit $30 to $50 million worth.

Okay. Got it. Okay. And then in terms of the question still around the reserve policy, we've never used it before and it should be at 10%. Do we replenish it? And have we, since the reserve has been established, replenished it every, or not replenished it, but added to it so that it exceeds 10%?

Well, because our budget has gone up with the cost of living and wage increases and inflation every year, Every time our budget goes up, I add to the reserve to make sure that we're always at the 10% level. Oh, I see. So, for example, if our budget were $1.2 billion, then our reserve would be $120. If it moved up to $1.4 billion, then I would add $20 million to the reserve.

Okay. But we're never at a point where we exceed 10%? No. Okay.

Got it.

Okay. So then my... Thank you. That's helpful. And so then my... comments are, I think that what the staff has proposed, well, I want to go back just to the beginning of what we heard this morning from our infrastructure chief, John Baptiste, and just as part of the sort of framework in the context setting that we heard this morning, I think that, you know, if we're focusing on cost control and then innovation, it sounds like the efficiencies are part of that. And then, and maybe we have to lean in a bit more to whatever the innovations are that we can, um, discover and, and, um, and sort of expand to be able to find some of the couch cushion money, because I think that it shows that, you know, you've done a pretty good job at, you know, at the efficiency part at the cost cutting at finding, uh, um, a way to deliver the service that continues to cost more, even if we don't change anything, still delivering it at a cost that can keep up. And so I'm hoping that even this sort of proposal with the cable car fare, it seems like that's sort of getting as close as we can to innovation on the sort of fair side and on the administrative side that I think can be beneficial for us going forward and just being creative about how we of course emphasizing the you know fair collection and the payment of fairs but also being creative about how we can be more customer friendly and more you know just user friendly when it comes to tourists but also regular San Franciscans because I think as we have been saying we all have to share in the responsibility or the burden of filling the gap. I think what you've proposed in terms of the cable car fare, if we go back to just what the chair's direction was, is reasonable and makes a lot of sense in terms of growing or just updating and giving a 2.0 version of what our system already offers. I also just want to say this. I think that I wasn't around, I'm trying to figure out what other situation except for this one that we have today and going forward for the next couple of years, what would be a better opportunity for us to use the, or when would be a more emergency time for us to use those reserves? And I don't want to think about that. And so I do think that I understand that my colleagues, some of us have been hesitant to use the reserves in the past, but I just think that's what they're there for. And I'm so glad that the earlier version of this board had the foresight to say, you know, let's put this aside because I think that the rainy day is here or real close. And so I would hope that we can, or I guess my direction is that we do use some of it, not all of it, because I understand that that is too hard to recover from. I would ask that we, as a, as a board also get the opportunity to discuss how that fund then gets replenished, given that we have this deficit still to keep up with the loan potentially to pay back, you know, what the sort of what the timeline is and what the likelihood is that we could get back to 10% and even get above that if, you know, times get better. So I would like to have that discussion at some point, but I, you know, I just, I don't want to blow through our reserve money, but I also just think that we have picked, we have, you all have very carefully identified where, you know, where we can cut costs, where we can be more strategic, where we can, you know, maybe raise revenue, even with the absence of all of the, you know, the federal revenue that we have really depended on. And so I think that, using the reserve is also an area that is untapped to this point that we should feel comfortable relying on in some way. Because these are different times than I think what this agency has seen in the past. And then there was one other last point that I just wanted to make just a sec. I'm sorry. OKAY. AND THEN THE ONE-TIME SAVINGS FROM COST CONTROLS, IT'S A BIG RANGE. SO I JUST, AND JUST THINKING ABOUT WHERE, YOU KNOW, THINKING ABOUT THE AUDIENCE OF THE LAST BOARD MEETING THAT WE HAD AND HOW THERE WAS SOME SORT OF ISSUE WITH THE WAY, YOU KNOW, I GET HOW YOU'RE DOING YOUR COST CONTROL, OR YOU'RE COMING TO THIS COST CONTROL part of it by moving around schedules and changing things. And I understand that that's sensitive for some of us. And so I just would also like to say that I would prefer to not use capital funds and instead rely on the one-time savings, but as little as possible. I'm sorry that it's not very helpful. I can't give you numbers, but I just I DON'T THINK IT IS WISE TO PAUSE OUR INVESTMENT IN OUR CAPITAL. SO I WOULD LIKE YOU ALL TO EXPLORE THE MINIMUM LEVEL THAT WE CAN RELY ON THAT COST SAVINGS TO BE ABLE TO COME UP WITH SOME OF THE GAP, ASSUMING THAT THE STATE LOAN IS REALLY SORT OF FILLING MOST OF THE SPACE. THANK YOU. THANK YOU, CHAIR.

Thank you. Also, just to clarify, was I hearing you say that you felt that the cable car pricing was appropriate or you thought higher?

So I think it's appropriate. I don't, I am not opposed to higher, but I also think that I don't want to discourage part, I think the cable car is part of our recovery. the downtown recovery. And so I would not want to discourage people from using it by going too high. And I get that we subsidize it. It looks like at least $10, $11. But we also subsidize pretty much every other mode of transit as well. And so I think that we have to deliver the service, but I would not want to make it cost prohibitive for people to come here and And I like the idea, I do really like the idea of a path that allows people to use other transit options alongside their cable car purchase. So I think what is proposed is fine, but if my colleagues have other thoughts about it, then I would be supportive of a little bit higher.

Thank you very much. I don't know who went first, Director Felder.

Thank you, Chair. I'm gonna echo quite a bit of what my colleagues have stated over the last few minutes, but I'll try to be fairly specific in my thoughts. I would definitely favor use of the reserves in this instance, I think. I would probably move to have essentially two-thirds of the cost through the reserves and then a third through one-time savings from cost controls. I think that's a reasonable balance between those two sources. I don't think it's responsible for us to look to capital funds. I think that is a dangerous place for us to go, and I'd really prefer not to go there. So, you know, that's my thinking at a high level. As it relates to the cable cars, in that pricing, I really do appreciate the strategy here. And as I was thinking about it, I think getting closer to cost recovery is important. We're far from it now. I think inching closer is relevant. Where my head went was towards something in the $17 range. I'm very empathetic to a lot of the comments we heard about making sure that we maintain pricing that is affordable for locals and it doesn't diminish demand for visitors. I think at that level, we achieve that. Obviously, the cable car ride is part of the monthly demand. you know, pass. And so, you know, I think that covers a big part of the issue for locals. You know, for visitors, we've heard a lot of conversation around comparables, you know, and there was some reaction to the London Eye, you know, fine, maybe that's an outlier. But I think there are some very reasonable comps. You know, I was recently in Barcelona, the gondola there, the Manjouk gondola is essentially priced in the range that we're contemplating if we were to go to $17. I don't think, you know, I think that's a very comparable experience and dynamic. You know, it's a gondola or a cable car. It's largely carrying tourists, but it also does carry some locals. I don't think people around the world are objecting to that kind of price level. Perhaps people will be critical of this comparison, but I think we also should look locally. What are tourists paying for classic San Francisco experiences? And the closest one that I came up with was writing Ghirardelli Square. What are you paying for a Ghirardelli Sunday? $17.50. at some level, you know, I think we need to remind ourselves of the times and not forget that things are expensive and prices change and our prices need to change to both reflect the cost and to reflect the reality of what our visitors experience in San Francisco. And I don't want to gouge, but I think that if we are priced comparable to a Ghirardelli Sunday, I think that's pretty reasonable when you consider the value that people get on that cable car ride. So I'd recommend something in the $17 range.

Thank you, Director Felder.

Thank you so much for your presentation, Bri. I know that, you know, like, well, I also want to thank Ted and Greg for their presentation too. I know they're not here, but incredibly valuable information just understanding the context in which we are in as a city and as really key partners in assembling our budget, it was really interesting just to understand what they're forecasting, how they're thinking about the trends, how they're thinking about things that really affect us at the end of the day. What does the traffic look like? How many folks are moving to downtown or working out of downtown? how are these new emerging industries really contributing to that or not? So all of this was really important context for us to also understand as we forecast solutions, which solutions are more viable than others. truly appreciate their presentation as well and for them taking the time to come out here and talk to us. I'll start with the one-time sources slide and ask you, Bri, for some clarifying questions around the state loan. You noted one of the big challenges of the state loan is the payment obligation. Wondering if you could give us a bit more context for that. When does that kick in and how much is it year to year?

So we are still in negotiations with the state on the exact mechanics of the repayment schedule, but what we do know is that the term is going to be short. We anticipate that we'll have to pay it back within we'll have a 10-year repayment period, which is quite a lot of money for, you know, repaying 200 million over 10 years is tough with no interest at all. Principal only, we're looking at $20 million a year. A year.

And to remind me, for the different legislative efforts that we have,

Sorry, I just needed to confer with the executive director for a minute. I would, so to be more clear, the actual term of the loan is 12 years. We get two years of interest only. and then we get 10 years to repay the loan. But I think what's significant to note is the rate is going, we're taking a variable interest loan, which means that the terms or the amount of the repayment is going to vary with SFMA, which is the rate at which the state's pool of funds returns money. So essentially, because they are giving the transit agencies money, that money is not going to be in their bank account earning interest. And so they're asking us to kind of hold them harmless where they feel exactly the same, whether they gave us the money or not. And, oh, so sorry. So I would say that interest rate, the rate that that fund gets has varied over time in the recent past between say 3.5 and 3.8%. So that's likely in the range that we would anticipate that it's varying between absent any big changes in macroeconomic conditions.

So is it safe to say that once we do enter into the agreement, two years after, we'll start paying north of 20K a year. We would have to, the payment obligation is 20K a year, essentially? Well, that would be just for the principal.

If you include interest, the payment will likely to be between 30 and $40 million a year. Got it, okay.

So it is quite a significant payment. Got it. And that would be for a term of 12 years, right? And for the local and regional measures, can you remind me the timeline for those? I know they end at a certain time. 14 years. 14 years. Okay. So all these timelines are kind of coinciding. Got it. So it seems to me that, you know, I take the feedback that my colleagues shared really seriously, and I'm seeing that I share their reluctance in using flex capital funds. or flexing capital funds for operations. But it also seems that at some point we are going to have to pay some things back and we're also trying to replenish hopefully our reserves. And so there is a real chance that we may come to a point where we would have to flex capital funds to be able to make these payments on the loan and to help replenish our reserves. Is that like an accurate assumption?

I think it depends on how things play out over the next 10 years. Our hope is that we would not do that. But of course, repaying a loan is the way the waterfall works. You repay your outstanding debt obligations first and you spend money on everything else next. repaying the loan would be an extremely high priority. And if it were required to flex capital funds to do that, then we would have to do that.

Okay. So I agree with my colleagues in the sense that I think for now, it's important for us to not divest in our capital spending. We've seen a lot of different transit agencies that have had to take that particular stance and have felt the repercussions of those decisions with delays and different things that they've just had to forfeit some investments in infrastructure. So I share that. But I am concerned about all the things that, you know, if we are spending these funds, especially the loan, we have to pay this back at some point. And we also want to make sure our reserves aren't depleted and that we're creating a positive financial situation for future versions of us. And so I'm thinking about future colleagues or like future versions of myself that will have to make these decisions and taking them to their situation, their circumstance to heart. and the folks that ride our services. I'm gonna pivot a little bit to the cable car. That's a hot topic right now. And I was very supportive of staff reframing the cable car service as a tourist attraction, because it is for a lot of folks. And it's not lost on me that it is also a local resource for many folks as well. And so I understand the rub that a lot of folks are saying, like, the London Eye does not serve local transit riders. That's not the same thing here. But I do love a hot Sunday, so I do partake in that. But, you know, I was... If we are to go into the tourist industry, I do believe that we should start doing it in a way that aligns with our values. And I was looking at different tourist attractions across the city. Many of them have discount opportunities for folks that have EPT or Medi-Cal or other folks. I was looking at just the Cal Academy of Sciences as an example. One pass for an adult is $49, pretty high. But if you have EBT, it's $5. And so just you could see the differential there. It's quite extreme. And so I, like my colleagues, I think cost recovery is really important. And I would really be supportive of trying to find a solution where cable car service is self-sustaining. That said, I still want to understand what are some of the technology limitations that would prohibit us from creating a discount fare for folks that are on fixed incomes, folks that may already qualify through our systems to get discount fares. So I don't know if you have an answer to that, Bree.

Thank you for that question and we didn't spend as much time responding to the board feedback but that is something we also heard in the last meeting as well. We do think that once we are at full implementation of CLPR that we could use that as a way to provide discounts as you would recommend as a board. So we could look at just a discount for people in the Clipper Start program, which is people from low-income households. We could also look at youth or seniors or other discounted folks. We don't see an easy mechanism to do it for people who are not part of the CLPR program. So it would really prioritize regional visitors as well as locals. But we would need to bring it back to you in like six to 12 months when they're more fully completed with the CLPR rollout to be able to share a proposal.

There we go. And would the, when would this increase kick in if we were to support this? And would it align with some of the work that you're talking about, Julie?

So changing the cable car, because we're not just changing the price of the cable car ticket, but we're creating this new fare that would allow you to use all Muni all day. that is gonna require some programming with Clipper. So we anticipate implementation in January of 2027.

Okay, so that does give us time to explore discount programs and have them implemented by the time that we would take this slide, is that? Yes. It's like a lot of staring. Okay. So I, if that's the case, then I would be in favor of increasing the price to something that, that takes us closer to a cost recovery. And possibly, you know, if, if we want to actually consider how to make a, make this more self-sustaining in the long run, even considering how do we index this and is there a mechanism to do this, right? But I do think that we have to sit with that solution a little bit more because I really do think that we just have to stay true to our values and make sure that we're creating a mechanism so that families who also are visiting here and are Medi-Cal eligible and do our on-sex incomes can still enjoy this experience. And that's a service that we're also providing. A lot of different attractions here in the city do that. And again, this is reflective of our values of the city. And I just wanna make sure that as we're entering this new industry as an agency, we're holding true to those values that all other tourist attractions have upheld.

Thank you very much, Vice Chair Kahina. Director Chen.

Thank you, Chair. I think I might be the last director between us and lunch, so I will try to move quickly.

But although I do have a lot of comments.

I apologize. I'll try to go in the direction of the deck. So efficiency proposals, revenue proposals, cable car, and then one-time sources. So starting with efficiency proposals, I think these all make sense. I think the board is agreed on most of the, I'm particularly very interested in double parking enforcement of bus lanes, which is both possibly, which is both an efficiency thing and also will speed up our buses on our most busy lines. And so that's something, you know, there is, Maybe not for this discussion, but there are impacts, I think, to customer service. For example, the fact that our ticket machines, that we are decommissioning some of our ticket machines. So just knowing that there are impacts, but this is probably the best that we can do in this situation. Efficiency proposals are, I think, are good. The revenue proposals, I think, in general, good. I know that some directors have said maybe we can do more for parking. I THINK, YOU KNOW, AND THEN WE ARE LOWERING SOME OF THE CLIPPER DISCOUNT, BUT WE ARE INTRODUCING FAIR CAPTING, WHICH I THINK PEOPLE ARE VERY, VERY EXCITED ABOUT AND HOPING THAT WE CAN IMPLEMENT THAT BY THE END OF THIS YEAR. SO I THINK THERE'S SOME THINGS TO BE EXCITED ABOUT THAT WILL IMPROVE THE USER EXPERIENCE FOR PEOPLE WHO ARRIVE IN UNI. THE PARKING VIOLATION, THE REDUCTIONS, YOU KNOW, I I feel like, you know, I feel like it's not necessarily, oh, the fine amount is bad because we still want to encourage people on steep slopes to curb their wheels, right? But it's more about when we as an agency and when our parking enforcement issues a fine. So I wonder, I don't know, you know, do our complaints reduce, right, if we reduce the fine for curbing your wheels from 73 to 48? I don't know. And at the same time, I also recognize it's not the most, I also recognize that it's probably, in the grand scheme of things, not the hugest thing, but it's fine. Going to cable car, there's a lot that we don't know, and I think it's a question of how, But I think as Director Kina has mentioned, do we do discounts? And if you have a monthly pass, if you have the Lifeline pass, if you have the low income senior pass, if you're already on the monthly pass, you have access to the cable car system. If you are a youth with a school ID and you use it to commute to schools, let's say at like Washington High, you have access to the cable car system. So at least for locals, I think we do have like pretty expansive access. I think the question is for tourists, what is the... We don't have good data, and I think we're making shots in the dark about how much people want to ride and what's their willingness to pay. And at least in their time, people are willing to wait 30 minutes, 60 minutes to ride the cable car. When I've gone to the train around at Powell, it is a lot. And I think we also... The other thing that I wish I knew, which I don't think we know, is how many people ride it round trip or take multiple trips in a day, because that would change my understanding. If everybody rides the cable car twice, then our pass should be at least twice the fare. If it's something more like 1.3 or 1.4, then we get a different number. And so all that to say, I think there is some I think if we bundle the cable car fare with sort of the one-day regular bus and metro, bus and light rail pass with a $5 pass plus the $9 cable car fare, plus we add some number for people who will ride the cable car more than once in a day because people are very excited about our cable cars and it's not something that you can find elsewhere in the world. I think there is... you know, I would, if I think staff's original support was 15, I also think that there's room and support depending on how we think about this multiplier and the elasticity to go up to 17, 17, 18. I also, I think the third thing is that we can use this first year to gather information about how demand has changed and then, and, and then give ourselves as the board, the flexibility to change, to adjust it further in coming years. So that's, That's something that unfortunately we are making a lot of shots in the dark. I also, I do think that people, many people are, they take the cable car and then they take the 28 to go to Fisherman's Wharf or they take the cable car and then they, I think people are already using multiple modes. And I think this is, I think will be a convenience factor that makes things, I think a lot easier for tourists too, because then the choice, the amount of choices that you have to do to say, oh, do I need it one day? Do I need a one day passport? Do I need a three day passport? Do I also need this? It should hopefully, I think, will make things a lot easier from the other end. I think one thing that Director Keene, I want to add to Director Keene's thing is that I don't know how hard this is, but since our bus and light rail is free for youth, what a youth fair, may or may not look like on cable cars. I don't know if that's something that staff have considered. But in terms of if you are a family of four or if you're two parents and two kids or three kids, many other places do sometimes have a youth fair or a youth ticket. And it hopefully inspires future transit riders because oftentimes kids really love transit, really love the bus, really love the train. So I think in terms of like an investment. Okay, cable car. That's all for cable car. Oh, I'm sorry. I wanna go back to parking.

Director Chen, I just wanna, we will be reconvening at one o'clock. So we are- Sorry. I HATE TO CURTAIL YOU IN ANY WAY. WE ALSO NEED TO HEAR FROM YOU ABOUT YOUR PRIORITIES WITH REGARD TO ONE-TIME SOURCES.

ONE MINUTE ON PARKING. I THINK THAT THERE ARE PLACES IN THE FINANCIES SCHEDULE WHERE MOST PEOPLE WOULD BE VERY HAPPY TO SEE INCREASED FINES. AND SO ONE EXAMPLE IS if you are parked in the bus lane, in a red transit-only lane, and you are blocking the bus for hundreds of people, the fine for that currently is $108, which is the same as a street cleaning ticket, versus, I think, if you're parked in a bus stop, that fine is $443. And so I think there is some room with that fine to both be a deterrent and also... And also I think make the experience and air efficiencies better. I think another example is sometimes people deliberately obscure their license plates using a plate cover or a tint or hide them. And I think that is examples where people are willfully trying to evade accountability or who very much should know better, but are not always getting the right thing, are not always doing the right thing. I think we want to align our fair schedule to both like be in line with our safety goals and our efficiency goals. So I would love if staff could maybe take a look at some of them, take another look at some of these and take a look at that. So going to one time sources, let me go very fast. I have so many questions. THE GOAL, YOU KNOW, I AM, I WOULD, I THINK THE BOARD DOES NOT HAVE A GOOD IDEA OF WHAT THE OPPORTUNITY COST OF FLEXING CAPITAL FUNDS IS AND HOW MUCH THAT WOULD IMPACT OUR OPERATING COSTS. AND OR EXACTLY LIKE WHAT SORT OF, LIKE, I KNOW THE CAPITAL PLAN IS NOT THERE YET BUT IN TERMS OF WHAT SORT OF PROJECTS WOULD FALL BELOW THE LINE IF WE HAD LESS CAPITAL MONEY. AND I SHARE I THINK MY COLLEAGUES CONCERNS ABOUT ABOUT DIPPING INTO CAPITAL BECAUSE THINGS DON'T GO WELL. I THINK THE COST CONTROL ONE-TIME SAVINGS TOTALLY MAKES SENSE. WE HAD THE RESERVE, WE'RE SUPPOSED TO USE THE RESERVE FOR OTHER STUFF. WE HAD A LOT OF DISCUSSION WHERE $15 MILLION OF GAP TO CLOSE LAST YEAR AND NOW WE'RE LOOKING AT 240 MILLION, 260 MILLION, 280 MILLION. It's really tough. You know, if we see if I'm a hoarder, you know, in terms of opportunity costs, right, we're talking it's like $5 million. For every $100 million we pull out of the reserve, it's like $5 million a year, right, in terms of opportunity costs.

That we would have to return?

In the sense of lost interest that we would make off the reserve if we didn't touch it.

Oh, that's a good question. The monthly interest rate right now is about 3.7 in the city's pool.

Okay, so roughly four. And then the opportunity cost for the state loan to pay back is something like?

Very similar because they're invested in very similar ways. And the same would be, just to note, the same would be true for the fund balance because they're all invested in the city. Both the reserve and the fund balance are invested in the city's pool.

I suppose since the money is there and we can, and if we pull the state loan, but then we reinvest it, right, then that means our cost of holding it is lower. So I think we should, so it sounds like staff wants to, we pull as much as we can from the state loan. We hopefully don't have to touch it. I think as long, I don't, I personally don't care what bucket of money it is, but as long as we have some reserve, you know, even if it isn't called the reserve, as long as we have reserve funds that we keep, and then, And then we try to figure out how to, and then I think we should think, as a board should think about what the repayment plan is for the loan slash reserve and over what time period. And is that, I think in my head is like four years, six years and how that constrains us in the future. Thank you, Chair.

Thank you so much, Director Chen. Well, I will keep it brief. With regarding the reserve, my recollection of the last time that we spoke about this was the caution that I heard from the CFO was that we were proposing to use one-time sources of the reserve at that time for ongoing expenses. MY UNDERSTANDING OF WHAT WE ARE TALKING ABOUT TODAY IS THAT WE ARE, THIS IS A ONE-TIME NEED TO SURE UP THE DIFFERENCE BEFORE NEW REVENUE COMES IN. I AM VERY INTERESTED AS WE GET CLOSER TO APPROVING THE BUDGET BEFORE I'M READY TO SAY, BECAUSE I'VE BEEN ON RECORD ALSO SAYING THAT I'VE BEEN REALLY HESITANT TO USE OUR RESERVES GIVEN THE JUST TREMENDOUS AMOUNT OF UNCERTAINTY THAT WE'RE EXPERIENCING ON THE FEDERAL LEVEL, THE STATE LEVEL NOW, BUT THERE'S NO GOOD OPTIONS HERE. BUT I WOULD REALLY LIKE TO DRILL DOWN AT FUTURE HEARINGS INTO WHAT what our policy should be for repaying or for replenishing the reserve. And Director Chen's point about the lost opportunity on the interest is an excellent one. I think we need to be weighing all of those complex nuances. And I don't feel, and maybe this I DON'T KNOW IF THIS SHOULD BE ANSWERED RIGHT NOW GIVEN OUR TIME, BUT I DON'T FEEL I UNDERSTAND THOROUGHLY THE DIFFERENCE BETWEEN THE FUND BALANCE AND FLEXING CAPITAL FUNDS. I heard and take seriously the concern about setting a precedent for using capital funds for operations, but I'm not, it seems to me that the fund balance It's the same outcome that we won't have, that we spend that money on things that help us save money into the future. But it's not the same consequence as with flexing capital funds. I WOULD BE MORE COMFORTABLE WITH USING RESERVE FUNDS THAN CAPITAL FUNDS. WITH REGARD TO THE CABLE CAR, YOU KNOW, AS A RECOVERING MERCHANT, I, YOU KNOW, WHEN YOU'RE IN BUSINESS FOR PROFIT, YOU'RE ALWAYS LOOKING AT YOUR MARGIN, AND IT'S SO, COMBOBULATING LOOKING AT A NEGATIVE MARGIN. BUT I THINK THE SAME WHERE WE'RE SUBSIDIZING THE SERVICE AND BUT I THINK THE SAME PRINCIPLE APPLIES WHERE FOR A HIGHER PRICED ITEM, IF YOU APPLY THE SAME MARGIN CALCULATION, IT'S IMPORTANT TO CONSIDER THE ACTUAL MARGIN DOLLARS. SO I RECOGNIZE THAT WE SUBSIDIZE TO THE POINT OF ONE OF THE DIRECTORS, WE SUBSIDIZE ALL OF THE TRANSIT SERVICE, AND SO WHY SHOULDN'T WE SUBSIDIZE CABLE CAR? BUT I DON'T KNOW IF WE APPLY A PERCENTAGE TO IT, BUT THE MARGIN DOLLARS ARE MUCH, MUCH HIGHER WITH THE CABLE CAR. AND I JUST FEEL THAT IT'S IMPORTANT TO BE MORE in line with our costs. The difference between nine dollars and twenty dollars is very significant and there's and that's on a daily basis however many hundreds of rides there are. That's a significant outflow of funds. So it sounds like I'm in alignment with you know nobody's Nobody loves that option, but I think that what comes from staff as a proposal that the customers are getting a high value for the higher ticket price that we are proposing. Just coming back from wherever they've gone to on the cable car, would take them significantly above what's proposed here. And I think that perhaps we should start at 15 and see how that impacts ridership. And also see how our financial you know, how we, you know, how we continue to fare. So that is another thing. And with regard to reducing fines, I I love the idea of reducing fines. I think that it's particularly for infractions that don't impact safety. $108 is, we're quickly heading toward $108 for every little thing. I fully support looking for ways to increase fines for And I know that there are state regulations that impede us. But the suggestion that a bus lane infraction should be priced more in line with parking in a bus stop, I think that makes sense. But I know we have to operate within within the boundaries that we are given. I do feel as much as I love the reduction of fines, we have to see what happens. An additional $30 to $50 million, if that is what's gonna come down the pike in terms of state funding, we have to look everywhere we can. So I would almost wanna hold off on that decision before we find ourselves. But it will have to be balanced with how much money it actually saves. I don't think it's a particularly significant dollar figure that we're talking about. But yeah, none of it is easy. That basically is how I look at it. And I hope that's specific enough feedback to work with. And let's have some lunch.

Thank you, everybody.

The board will reconvene at approximately 1 p.m. Thank you.

We are going to resume. Director Kirschbaum, you had some thoughts for us about our discussion earlier?

I just wanted to thank the board for the detailed comments and also recognize that it can be challenging when you don't have all of the final details. to be giving final feedback. And I wanted to encourage you to look at this a bit as a feedback loop. So part of how we will structure the capital presentations that are coming up, we'll be informed by this discussion where you're really looking for details on if we shifted from capital to operating, what would be those trade-offs. The second thing I wanted to recognize is I really appreciate that you were able to give us feedback on the sources without the temptation to get into the specific math. And that is because we do expect in March as Brie shared that these numbers will get adjusted. Certainly the state is bad news, but it's not all bad news. So we'll see kind of where we land. IN OUR NEXT DISCUSSION OF ONE-TIME SOURCES, WE WILL BE ABLE TO SHOW YOU SOME OF YOUR THREE THROUGH FIVE IMPACTS OF REPAYING THE SOURCES BECAUSE I THINK ONE OF THE THINGS THAT THE CAPITAL SHIFT has a benefit of that the reserve or the state loan do not is that it doesn't have that same requirement to pay back. So it doesn't make us poorer in future years. It's certainly makes us less efficient because the older an asset is, the more expensive it is. And we are certainly experiencing that on things like our cable car system, which has not been rebuilt since 1984. But we will be able to, I think, bring that next level of complexity to you because of the really strong feedback that we got today. The other thing that we will, I think, be able to speak to a little bit more at the next meeting is, to the next time we look at this, is we still have some uncertainties going into the next two-year budget, things that we do not control, and so looking at things like the reserve, not only could help us close the one-time challenges, but also may make us a little more nimble if we do face uncertainty. And that's something that we can talk about it a little more detail the next time we discuss these sources. But I, you know, Bree and I are both super appreciative of the complexity of your feedback and also kind of keeping it at this kind of higher level because we will come back to you with very, very precise math. We're just not quite there on the process yet.

Thank you. Secretary Silva, will you call the next item?

Director, that places you on item number six, presentation and discussion regarding planning scenarios for regional and local funding measure outcomes.

Hello. I am appreciative of the opportunity to use this sort of informal structure to be able to present this really because how we think about this scenario planning affects every aspect of the agency. And rather than having everybody come up to give two or three slides, me being able to pull it all together for you hopefully will allow us to have a concise presentation and more time for discussion. This presentation is really specifically in response to two things. One is the feedback we heard from Director Hemminger and others early on in the process that in order to consider the plan that Bri shared with you earlier today, you really need to have some confidence that we would have a plan if one or both of the measures was not successful. The second reason we're developing this is because the controller's office, which will ultimately be certifying our budget, with some potentially uncertain revenue has made a similar ask. And then the third is that we want to be as transparent as possible with both our riders and our residents and our staff about what could happen. So this is A FUTURE THAT WE ARE ALL WORKING VERY HARD TO AVOID BUT WE DID WANT TO WALK THROUGH. SFMTA, as you know, is facing the largest and growing budget deficit that we have faced in our history. And we have been working for the past 18 months to develop a plan with broad support to address that gap. And so I appreciate that the bulk of our discussion time really did go into Bree's presentation because that, I think, is the core work in front of us. The challenge comes from the end of the one-time relief with revenue sources still not coming back or recovering to pre-pandemic levels. And just as a reminder, this is about 16% of our current budget. The plan was developed by the Muni Funding Working Group, facilitated by the Controller's Office. And it really did consider all options, settling on going big at the ballot with agency efficiencies as the preferred option. What I'm going to be talking about today is essentially the what if plan, the backup plan if that is not successful. And the potential ballot revenue that we would be solving for if one or both measures were not successful is on the order of about $300 million per year growing in the out years. Because the two measures are relatively close, we didn't spend a lot of time focusing on the regional measure or the parcel tax. The scale of our response is essentially the same. So what we have prepared for you then is both a both a explanation of the impacts that we would be facing, as well as to talk through the process or the timeline that we would pursue. And I'm going to spend the bulk of the discussion talking about muni service cuts. And the reason that I'm doing that is not because I am picking favorites, but it is because so much of our budget is going to either direct delivery of muni service or generating revenue for muni service. So our parking control officers managing our off street parking garages and things like that. And as you know, we have shifted since the last budget cycle in how we look at this budget because we wanted to be function based rather than what division it happens to be in. Two years ago, our custodians, for example, were in our administrative division. But the custodians are not performing an administrative function. They're performing a direct transit service function. So that is why this number has grown over time. But what it really represents is our transit operators. as well as the staff that directly support the transit service. The controllers in our control center, the trainers that are training operators, the custodians, the mechanics, the car cleaners that are directly supporting the service. Also wanted, as we dive into what would be potential muni service cuts, just give you a sense of where we're spending our money right now. So the bulk of our spending goes on the kind of the workhorse routes, the 22 and the 14 and the 23 Monterey. the long routes that help you get across the city, plus some of those smaller connector routes, like the hilltop routes that link you to like a Muni station or a BART station. We spend about 14% on our light rail system and another 13% on the cable car and historic service. And then the, our, our, fastest kind of most popular services, which is our rapid and our express buses represent about 10% of our service. And then while it has a very high cost per rider, we spend only a very small total percentage on our overnight service. And that's because instead of running every five or 10 minutes, we're running every 30 minutes with the exception of the 14 mission, which has higher even overnight demand. The cost per rider really has a wide range. In the case of the OWL network, it is because that 3% of expenditure is averaged over very few riders. The folks riding it are really relying on it to get to shift work, to get home safely from a fun night out. But overall, we don't see very heavy ridership overnight. The cable car and the F line have a very high cost per rider because they are very expensive. popular but very expensive services. Every cable car has two operators instead of one. In addition to maintaining the buses, or the vehicles, we are also maintaining the track, the power and the cable itself. Our light rail also heavily used, but does have more infrastructure costs than say our bus system. Our most affordable system, being our very, very heavily used rapid and express service where we're paying a little over $4 per customer. And then our kind of the bulk of the service we're spending about $6 a customer. So before I dive into what would be the kind of very difficult choices facing us, I do want to just reiterate for all of us and center us on the fact that Muni matters. It is critical for how people get to work. It is critical for how people visit families, stay connected, get to appointments. Almost 30% of school kids are getting to school on Muni. And we are carrying over 500,000 boardings a day. When you fold in the role that Muni plays with BART and Caltrain and AC Transit, our regional partners. You see that it is what is driving our economic recovery as well as our climate and our social goals. So any conversation about cutting Muni service is sobering. and everyone would be impacted. And this is something that when I'm out talking to neighborhood groups, I've really been trying to emphasize because I think at a cursory glance, somebody who does most of their trips by driving or by biking might think that the muni funding doesn't affect them. But Biking conditions in this city, if we had to absorb tens of thousands of additional drivers every day, significantly degrades. Driving your kids to school, if the 500,000 people that are currently choosing the bus start driving or shift to other modes is gonna create increased traffic congestion. So the impacts are very broad for all users of our transportation system. So as we focused on in the previous presentation, If both measures pass, we have a viable budget strategy, one that we will continue to refine based on the feedback that we heard today, but it would essentially ensure that we could maintain service levels. There is also resources in the parcel tax to do some strategic investments in service. And that is something that we will be having a broader public dialogue on. And we also will be better positioned to respond to ridership growth. And the regional measure also includes an expanded investment in Clipper Start, which is a regional discount program for people from low-income households, as well as better signage and better regional coordination. The agency benefits is that it truly will stabilize our workforce. We will still need to maintain our focus on cost cutting and efficiencies, but we will have a more resilient and stable budget for years to come. If one or both of the measures don't pass, we would be looking at some pretty significant changes. We would have to cut up to 20 muni routes. We would likely experience a doubling of wait time on those kind of core workhorse routes that I talked about. like the 22, the 14, the 49. We would be ending regular service at 9 p.m. So that kind of scaled back system that we run overnight from midnight to 5 a.m. would be the evening service. And we would look to reduce or cut the historic service, both the cable car and the F line. This is presented here as a menu of options. If one measure were to pass and the other were to not pass, we would be looking to each of these categories. but at a slightly lower scale. If both measures fail, we would be looking, I think, at this broad package, plus we would be looking at significant cuts from our partner agencies at BART and at Caltrain. WHAT THAT LOOKS LIKE ON THE MAP, YOU KNOW, IS SIGNIFICANT PARTS OF THE CITY WITHOUT UNI SERVICE, PARTICULARLY OUR HILLTOP ROUTES. WE WOULD BE LOOKING, AS I SAID, AT OUR CORE SERVICE BEING EXTREMELY CROWDED WITH CUSTOMERS BEING PASSED UP. SO NOT A LOT OF GOOD OPTIONS HERE. We are, I'm sorry, how do I go back? Okay. We are fortunate, however, that because of how we are structuring our budget, in particular with a reliance on one-time money in year one, we do believe that we have a long enough runway where if we were not, if one or more of the measures did not pass at the ballot, we could immediately set into motion service reductions without having to preemptively cut the service. If we cut the service preemptively, we lose talented staff that we've already made an investment in, and we could put in jeopardy the economic recovery that we are working so hard to nurture. What the timeline, and that we would still be working in the background in the coming months so that if something happened, we could react very quickly. But it is our recommendation to this board that we do not reduce service unless we receive negative news at the ballot. So what that would mean is in the winter of 2027, we would immediately roll out a public dialogue and outreach process. It would be relatively concise. because we would not have a lot of time, but it would allow critical feedback on this menu of choices. We would then come back to this board with both an equity analysis, the feedback from that stakeholder process, as well as to seek your approval. Additionally, if we looked at any fair changes or any route abandonments. We would also need to go to the Board of Supervisors, which would also happen in the spring of 2027. That would leave the three or so months that the scheduling team would need to actually build and operationalize these schedules with the idea that cuts would be implemented no sooner than the fall of 2027. And so the budget plan that Bree would be presenting would include enough of a runway to be able to cover us until we had sufficient time to design, build, and then implement these schedules. And while I have focused a lot on the muni cuts because they would represent the largest amount in terms of dollars, this would be an agency-wide approach. As we would shrink as an agency, we would also shrink the supporting administrative functions, things like HR and payroll contracts. We would also anticipate a need to reduce our street safety investment. Across the board, we would be looking, unfortunately, at deferred maintenance as well as lower responses to constituents. The way this would be implemented would be through both non-personnel reductions, but most significantly through staff layoffs. And that is because so much of our total budget comes from staff labor. And even having to say the word layoffs out loud is something that has been deeply challenging for us as a leadership team, because we want our staff to have an honest understanding of what could happen, but also know that we have been intensely focused over the last 18 months on avoiding this outcome. So we are working hard to communicate this information to you, but we are also working hard to communicate it internally. We never wanna be in a position where staff has to read about even if it's a worst-case scenario in the newspaper. If one measure fails, the scale of position reductions would be between 700 and 900 positions. If both measures fail, we are looking at over 2,000 staff that would be displaced. we would follow the city's very rigorous process as well as all of the state law requirements. So all of this would happen consistent with our contracts, consistent with the meet and confer bargaining process. And we would make a commitment to you all and to our staff that we would start this process concurrent with the public outreach, which is much earlier than we would technically need, but would allow for every potential better idea to be put onto the table. So that the the staff process would mirror the public process and the board decision process and would follow all of our structure for how we would approach. We would also, if there are any layoffs, they would be seniority based. And so that would make our newest hires the most vulnerable. So just as a wrap up, I do want to just reiterate that our preferred funding plan for fiscal year 26-27 and 27-28 preserves muni service, preserves our street safety and our infrastructure maintenance work. But because we are including in our budget almost $300 million of revenue that still needs to go through a voter approval process. We have gone through this exercise so that you all and the public understand what our process would be and what types of changes we would be looking at. We have focused on staff reductions and service reductions because that is what could be implemented in this very quick time period that we would be acting. I also want to be very clear that we would be open to any and all other suggestions and ideas for agency funding and would immediately start that work as well. looking to the muni funding working group for example there were smaller ballot measures that we the group did not end up recommending because they they didn't want to have to go back to the ballot multiple times but if we were unsuccessful those are the types of discussions that i anticipate would restart But regardless of any kind of future revenues, we would be looking at significant service cuts and significant staffing cuts, which is why that is the focus of this presentation. So with that, I'm happy to answer any questions or take any feedback that you have.

Thank you, Director Kirschbaum. Actually, I think we will take public comment at this time. We will now open public comment for two minutes each.

Members of the public wishing to provide comment will have two minutes each. I will warn you when there are 30 seconds left and also when time is up. Public commenters for this item, item number seven, can come up to my colleague there standing with a handheld mic.

Hey, everybody. Jaime Valoria with San Francisco Transit Riders. The Sunday thing kind of stuck in my head. This is more of a joke, but maybe we can combine Sunday and cable car tickets together and make that cheaper for both. But I also appreciate, you know, the details that's being shown, especially the cost per passenger. Passenger trip, is it possible to also show how much each route costs? I'm not sure if that's beneficial or not, but it would be good to know, like, which routes are actually, like, making revenue. And then also, you know, when we're looking at, you know, looking at reducing parallel routes or reducing frequencies, can it be a combination of both? You know, I'm attached to a 31 Balboa. You know, there's a lot of communities that rely on that, and I know there are parallel routes. Can there be some sort of, like, decision that would allow to have parallel routes still run, like, you know, people with disabilities, seniors, or even connections to commercial corridors? I think that's something we should also focus on. Oh, no. And then, finally, when you're making those decisions, it would be great to be as transparent as possible. like the details that we get as transit riders, also with like the Muni Equity Working Group. I think the public would benefit from knowing a lot of those details. And then finally, if we're doing the outreach, is it possible to start doing the outreach like now, as if both measures is not going to pass? I'm not sure if that's detrimental to the measures, but at least that gives us a lot of time, and it could spur more people to really take these measures seriously. 30 seconds. So, yeah, I think that's really it on my end.

Thank you. Thank you, next speaker.

Hi, good afternoon. My name's William Walker and I live in District 11. I actually got wind of the map of the buses by just listening to the radio. So clearly you guys are doing a good job at getting the word out about cuts. You can always do better, but I think that the map though, For me, it's not helpful because the map is the same routes that are always proposed for cuts. So, and I got my start doing transportation planning, coming to one of these meetings saying not to cut my bus. And I think it's important that you show a little bit more data around it. Like Jaime was saying, maybe showing the route segments that have ridership versus the ones that don't, showing the times of day that have ridership that don't. I mean, I'm not gonna say where in District 11 I live, because when you have these discussions, it starts to become a targeted thing. But I see a bus that runs empty the last couple hours of service where I live. And it doesn't mean that it's not empty on the whole route. And I think it's important that we provide more data around that so that people can make more informed decisions. I think that you can take portions of routes that are duplicated and maybe curtail a portion of that and maybe make the other route stronger by increasing frequency on that route. But by just showing a map of all the routes that are going to be targeted because of their collective ridership, it's not fair because there are definitely routes that are hilltop routes that have heavy segments of ridership. I didn't get the comment in your first session and you're talking about cable car fares. I think looking at load factor, not just with those hilltop routes and the routes that you're considering changes, but there are times that cable cars also have less ridership and maybe marketing that to local ridership as like a lower priced cable car ride and so that you're giving people trade-offs. So that's something you can do. Thank you.

Thank you. Any other speakers for this item?

Good afternoon, Board of Directors. Claire Mobley, Director of Advocacy for the San Francisco Bicycle Coalition. Our mission is to promote biking and rolling for everyday transportation. We know that a transit-friendly city is a bike-friendly city, and when meaning is under threat, that'll have negative impacts on the other sustainable modes. We have been very vocal supporters of both transportation measures and understand the gravity of what will happen in the event one or both don't pass. THE CHRONICLE RECENTLY REPORTED THAT SAN FRANCISCO WAS THE THIRD MOST CONGESTED CITY IN THE UNITED STATES, AND WE SHOULD BE VERY EMBARRASSED BY THAT. IF THE MEASURES FAIL, MUNI LINES AND SERVICE WILL BE CUT, WHICH MEAN EVEN MORE CONGESTION ON OUR STREETS. UNDER THE WHAT IF SCENARIOS, THE AGENCY SHOULD BE ENCOURAGING PEOPLE TO MODESHIP TO MITIGATE THIS OUTCOME BECAUSE 60% OF HOUSEHOLDS IN OUR CITY DON'T OWN CARS. THEY LIKELY WON'T BUY A CAR, AND IT IS IN OUR BEST INTEREST TO PROMOTE SUSTAINABLE ALTERNATIVES. It's concerning to us that staff is proposing to dip into the already small bucket of funds for pedestrian safety and bike projects. 3% of MTA's budget is spent on street safety projects and even less of that goes to bike and ped projects, even though they're cost effective and have proven to increase safety. We would strongly advise against this because these are the projects that save lives on our streets. We know that saving muni is the top issue this year. Transit and street advocates are the ones out there gathering signatures and educating people about the regional measure. You need us to focus on this effort, but we cannot do that if our streets become more dangerous and lives are put at risk. That means less capacity for us to focus on the measures. So please provide clarity on how the capital flex funds are being flexed. We can walk and chew gum at the same time to plan for every possibility, possible reality past the November election.

Thank you.

Next speaker.

Good afternoon, Griffin Lee here, District 2 resident and excuse me, member of Connect the NSF staff. I think the reality is here is that there is a lot of fear being instilled across San Francisco and those engaging in this meeting. I certainly, and we certainly appreciate the conversation around these scenarios. The reality is though too, is that I think there needs to be deeper analysis here. I think the man from District 11 stated, for example, route optimization, something I've been bringing up at board meetings, our economist has built a deck that I think some of you have seen. And a good example is I think there's eight to 10, routes right now that are being severely underutilized compared to pre-pandemic levels, like less than 50% ridership. So demonstrating those types of things and shifting would certainly, I think, gain more trust across the agency and with riders. I will bring back what I brought up at my first comment here today is that I believe I found a loophole and it entails incorporation into actually one of the two measures passing. I know most of you here probably thought coming in that myself and staff would say we're opposed to both measures. The reality is we want the best for San Francisco, we want the best for the agency, but we have to demonstrate that we can be fiscally responsible at the same time maintain ridership and transit service. Thank you so much.

Thank you. Any other speakers?

Howard Wong with Save Muni. Reserve funds and capital funds are somewhat related. I think it's very important that if one taps into both that there be some clear defining guidelines of how If there's a big emergency, you know, BART's had a lot of infrastructure problems, partly because of deferred maintenance, so that there's an understanding that if there's a big failure in any system, that there be some backup, that if reserves are already being tapped, that there be some kind of clear guidelines as how funds would be, where it would be drawn from. As far as cable cars, it's obviously true that tourism probably would pay a little bit more, and I think it's pretty important to look at other models, as several people have said here. The other possibilities for tourism and funding is naming rights, other types of public-private partnerships, I THINK THERE ARE A LOT OF OTHER MODELS IN THE COUNTRY, EVEN IN THIS AREA, REGARDING NAMING RIGHTS FOR WHATEVER, STATIONS OR ANYTHING LIKE THAT. I THINK MTA'S, MUNI'S GUIDELINES OF HAVING A MUNI STOP WITHIN THREE BLOCKS OF EVERY RESIDENT IS A GOOD GUIDELINE TO TRY TO PRESERVE.

30 SECONDS.

THAT'S PRETTY IMPORTANT TO A LOT OF RIDERS, I THINK. THANK YOU.

Thank you. Any other speakers for this item?

Good afternoon. Tom Radulovich. This is all interesting and saddening. One of the things actually I was talking with the controller about this earlier. One of the challenges I think looking at city government and trying to make sense of it we don't have very good accounting across bureaucratic silos, right? So one of the things that I think about is, you know, the transportation system, a lot of that is MTA, a lot of that's in the public works department budget, right? So for example, if you were to get rid of transit service in this city, we would presumably still keep maintaining roads because again, those are our priorities, right? But you would spend a lot more paving roads because if you have a lot more traffic, there's a lot more damage to streets and roads, right? So that's a cost. You'd see costs go up to businesses. You'd see public health costs go up. You'd see a whole bunch of other city costs increase if any of these scenarios play out. But those aren't really captured in your models. And I would say even when you look at the cost of the different modes, that's not captured in your model, right? Because light rail looks more expensive because you maintain the entirety of that right away. Not only the vehicles and you pay for the drivers, you also, the physical right away, the medium that those things run on, that's maintained by this agency. Buses run on city streets, that's maintained by another agency. So it looks cheaper, but if you look at the cost to the public, rail might actually be cheaper. We just don't know because we don't do good accounting across silos. Automobile-dependent cities are really expensive. I grew up in one. Los Angeles is going broke. Houston is going broke.

All of these cities that sprawled and that are auto-dependent, they're having huge financial problems.

The failure of this agency, if we don't pass these budget measures, is going to have huge repercussions for other departments that look solvent now. It's also going to have big effects and things we can't quantify like health, mobility, equity. So as depressing as this is, go further. Really begin to figure out what those costs are and what the scenarios are gonna look like for all of us who pay taxes and enjoy services in the city because I think it's much bigger than what you're showing here.

Thank you. Any other speakers for this item? Seeing none in the room and no accommodation requests.

Thank you. We will now close public comment. Directors, comments, questions, discussion? Director Chen.

Thank you, Chair. You know, I'd say, you know, thank you to staff for, I think, sort of like, I think the board has, some of the members of the board have been asking for a bit more contingency kind of awareness and making sure that we're clear with the public about what happens, you know, in the distinct possibility, right, that the measures don't pass. And I think this is the right level of specificity. I think there's going, like the amount of time and energy that this agency would have to do to try to make a more precise plan I think would not be a benefit for the agency nor for the public. I think with some of the public comment, perhaps I think there might be a little bit more information that we can give and then for folks, they're able to sort of build their own scenarios and seeing what could and for the media and the news and public interest groups to be able to say, what would a scenario look like And I think grapple with some of the tradeoffs that this agency and this board would have to grapple with if the worst case were to come, were to pass. So thank you. And I think we, this is, I think probably then it's a question of like messaging and just making sure that we understand, that we are clear with the public about sort of like what's going on while remaining within our legal, within our, because we as the agency cannot or will not electioneer, but we can share information about the measures and the potential impacts. Thank you, Chair.

Thank you, Director Chen. Vice Chair Kahina.

Thank you, Chair. Julie, thank you so much for your presentation. and to staff for listening to us in asking for the scenarios. It's one of these things we don't want to happen. And it's important that if and when it does happen, we've communicated to the community that we've put a lot of thought into this and have had time to really craft the methodology it is really respectful to this city and its effort to try to save Muni. And so I do wanna, just based on the timeline, I just wanna understand the timeline a little bit more, Julie. It does seem that we have to deploy both scenarios, the timeline for Muni service cuts and that for potential layoffs. pretty soon after we get the results essentially. And so I just wanna give you the opportunity to communicate to us what guidance you need from us so that staff is ready at that moment to start to initiate that particular work stream.

Thank you for that question. I want to clarify that the process for finalizing, approving, building the schedules, and then implementing muni cuts is what's driving the timeline. The meet and confer contractual process for staff layoffs could be implemented under a tighter timeline, but we see a real benefit from starting the conversations concurrently so that the meet-and-confer process is really fruitful and we can use that process to identify any possible alternatives. So what... I'm looking for from the board for this presentation is very similar to what Director Chen offered. Do you have sufficient confidence that we can focus on the budget building blocks that Bree presented this morning knowing that we would have a plan and be able to implement it within the timeline offered? we think that there are some trade-offs to starting any discussions about service cuts earlier or preemptively in a public setting because it could cause confusion. It also diverts staff resources from focusing on the culture of efficiency and some of the more ongoing savings that we plan to identify in the coming months and years. So I am looking for feedback on whether or not this is sufficient context to be built into our budget process or if you want us to be diving deeper.

THERE WE GO. I THINK FOR THE TIME BEING, THIS IS SUFFICIENT CONTEXT. AND IT STILL SEEMS LIKE WE NEED TO MOVE PRETTY FAST SOON AFTER THE RESULTS OF THE ELECTION. AND SO I THINK I WOULD APPRECIATE ALIGNMENT WITH THE METHODOLOGY THAT WE'RE GOING TO USE. AND SO I WOULD DEFER TO STAFF ON WHAT THAT LOOKS LIKE. DOES IT LOOK LIKE BRINGING AN AGENDA ITEM TO US AND THAT'S WHERE WE GET ALIGNMENT? Is it through briefings or through other scenarios? But I think the, we hope this doesn't, this scenario doesn't play out, but if we find ourselves in a moment where we do have to take quick action, it would feel better for me as a director to know that we are starting off on the same page and that we have alignment on methodology. we're confident that we're all in alignment with what's going to go with the work stream that's going to follow using that methodology. It's really tough information to socialize and to get buy-in from the community and from all the decision makers and stakeholders that are involved in something like this. And so if we as a board are aligned. I just feel like it'll make the work go a little bit faster for the team and give more space to work with community and fine tuning details if that's what is necessary and that's what is needed and being called for by folks. So I just want to make sure in these different timelines we're baking in enough time for our outreach and engagement strategies to succeed and to be meaningful to all stakeholders involved. But I think at this moment, this is exactly what we needed to see. And this is super helpful context to understand. We have two work streams mentally that I think, you know, I as a director, I'm forecasting these next few months. And this is definitely one of those. So I appreciate this level of detail right now and just helping me understand where our thinking needs to be if something like this, if any one of these two scenarios or ballot measures fail. I appreciate it.

Thank you.

Thank you. Director Felder.

Thank you, Chair. Similar to Vice Chair Kahina's comments, I am generally comfortable with where we are right now. I do think it would be helpful to have some conversation just around, and I think this is consistent with your comments, around how we would prioritize amongst the various adjustments that are proposed sort of by category. And I actually think that's valuable for the reasons that were just discussed in terms of putting us in a better position should we be in an unfortunate situation. But I think it also is generally actually a very helpful exercise to go through as an agency because The most likely scenario is that at points in the future, we find ourselves having to make difficult decisions, but not of this order of magnitude. And if at various points in time like this, in moments where we're not actually talking about something that is imminent, but something that is possible and is a worst case scenario, I think we're actually better able to have less charged conversations around what our general priorities should be. And so I actually think there's a healthy opportunity to talk a little bit about how we would prioritize cuts. And just in a general sense, I think that better prepares us for all kinds of scenarios moving forward. And it may be that through that process, we actually find some things that we realize that maybe we could do differently and that maybe, you know, we could operate more efficiently that we come to only because we were able to have this conversation in this context. And, you know, if you look at some of the examples that were up there and the cost per rider of certain services, well, maybe there are some small tweaks that we can make that could have meaningful impact that are easier to talk about now. So anyway, that's my general.

THANK YOU FOR THAT FEEDBACK. I THINK THAT YOU WILL SEE QUITE A BIT OF THAT IN MARCH WHEN JESSICA GARCIA PRESENTS THE MUNI EQUITY STRATEGY BECAUSE THAT WORK, EVERY CYCLE, THE PLANNERS HAVE EVOLVED IT. AND I THINK THE REAL INNOVATION THAT YOU'RE GOING TO SEE THIS YEAR IS MOVING TOWARDS THIS by annual assessment of all of the service for the exact reasons that you're talking about that it allows us to continue to make those precision adjustments that we're going to need to. It will also inform some of the proposals or options we bring you for the modest expansion or enhancement that is built into the parcel tax and it makes us more RESILIENT, MORE PREPARED FOR THESE TYPES OF DISCUSSIONS.

THANK YOU. DIRECTOR HEMINGER?

THANK YOU, MADAM CHAIR. WE'RE NOW THREE, NO, FOUR HOURS INTO THIS MEETING, AND WE FINALLY HAD SOMEBODY SAY THE WORD BART. I THANK YOU FOR DOING THAT, JULIE. If the local measure passes, but the regional measure fails, Muni is gonna be on life support, but BART is gonna bleed to death. And just as we need a recovered Muni to recover downtown, we need it on BART as well. There are a whole lot of San Franciscans who ride BART to work. And again, I won't rehearse the great weakness of our approach to transit in the Bay Area by creating a new transit agency every time someone has a new idea. But that's there. But the two indispensable agencies for movement in the Bay Area are BART and Muni. So I hope we can figure out a way to advance that cause and to communicate to people how serious this is and that they need a healthy BART system to ride muni and vice versa. So in part, this is, I think, a communication challenge because we're organized according to agencies and each agency has its own marketing department and communication shop. And there's nothing to do about that right this minute. But I think we do need to make sure they're working a little better together. Because let's hope we win these measures, but it's probably gonna be close. And we can't miss the opportunity to inform people about what is at stake and what we stand to lose. So we need to rescue Muni, but we need to save Bart too. Thank you.

Thank you. Director Kirschbaum, thanks so much for this presentation and for the staff that helped compile all that information. can't have been very much fun. So, and it wasn't very fun to listen to, but just to maybe echo what some of my colleagues have said, you know, was it Winston Churchill who said, you know, never let a good crisis go to waste. And I do feel that it's important to be in alignment on not which routes need to be looked at, particularly at this juncture. I think it's helpful to illustrate the scale of what we're talking about, but to have a very good understanding of what the process would be, and I don't think that that would necessarily be work wasted. If we have a good strategy around public outreach around service changes, which are just a natural part of the life of an ever-evolving system that is good, productive work. And I understand that we already have a process, but just having a problem of this scale to contemplate may help us look at that process and see how it would work for something like that. I would really appreciate hearing a little bit more, and this may have to come at a different time, if the regional measure versus the local measure were to fail to Director Hemminger's point, there are other downstream issues that we would be confronting that are unique to the local measure. Can you just maybe talk a little bit more about that?

Do you mind reframing?

Well, I think just in terms of that it would impact transportation throughout the region.

Yeah, thank you for that question. Our discussion today, I think mirrors the discussion that will be happening this month at the BART Board, as well as the AC Transit Board. Caltrain will be having this discussion in April once they have a few more things locked down. They are also articulating what the public and their staff would expect if the regional measure does not pass. And we would be happy to share those presentations which will be publicly available to the SFMTA board so that you all have a sense of that. But the scale of the impacts mirrors the significance of what I shared today.

Very good, yes. We'll look forward to getting more information about that. And just to the point of this work informing how we think about the budget just going forward, generally, I think it is very interesting to learn that the Rapid Express is 10% of our budget or our operating expenses. and it's the least expensive to run by a significant margin, $1.80 less per trip, if I did my math correctly. So that leads me to my request for the finance team that I would really appreciate being able to see ridership numbers by the service category. A lot of it is implied in what we were given. the number of riders that are served every day is a really good piece of information.

We did add that information to the appendix here. You can see that our Our service has just under a million riders per year versus the majority of our bus service, which has over 100 million customers per year. Light rail, about 32 million. And then our rapid and express bus is 22 million. That starts to give you a sense too of why that's some of our most cost-effective service because it's 10% of our costs, but it's more like 15% of our ridership.

Yes, and so if we were able to grow that ridership, structure that service in such a way that it is attractive for multiple reasons and the ridership grows there, that is helpful to the bottom line.

Yes, it is.

Yeah, so all of this is useful work, and I just would like to say again I really appreciate it. It's not any fun to hear, but it's important It's a very important part of our responsibility as a board to be intimately familiar with what could happen and to be prepared. So thank you very much.

One thing that I wanted to build on for the outreach process is that we would bring to the table all of the feedback that we've heard both as part of this budget process, as well as when we brought that back the service during COVID that had a robust outreach process. And we also, as part of our language assistance work, we also have built strong networks on how we collect feedback from our customers. When Kate McCarthy and Jessica Garcia helped put this presentation together, they did, it is very grounded in very specific dates like when we would first bring this challenge to you and some of our built-in communication groups like the Muni Equity Working Group, the CAC, the Muni Accessible Advisory Committee, when we would then go back out to the public, both in the intercept way, like we try to do out in the system and through the survey, as well as through targeted stakeholder groups. And then coming back, there's enough time built into the process for the MTA Board to review and deliberate on these changes as well as we would anticipate needing to bring a portion of the changes to the Board of Supervisors. we're happy in briefings to walk through that more robust timeline because we needed to make sure that we had enough time and that we had enough time in particular to be pencils down for the schedulers to do that complex technical work that would go into these types of changes.

Thank you very much. One last thing, I was reminded that in previous presentations to the board, you made a point of telling us about the cost of ramping service back up, that service is not like a a light switch, the time that it takes to build the level of expertise and to provide the level of service that we are currently providing again. Would you care to just touch on that?

We learned during COVID just how difficult it is to restart service after we have, in that case, just stopped staff hiring, not actually laid off talent. But it's because there's some chained events. So in order to train operators, you need to train trainers. Trainers typically take three to four months to shadow a class and then another three to four months to be in a student teaching position, plus the hiring process on top of that. So it's not just a matter of stopping hiring operators and then restarting hiring operators. It's a matter of having the HR staff to build the civil service list to then do the hiring, to then have those precursor staff like trainers in place to then start hiring operators. And so there's just... a very long series of interrelated moves. On top of that, it takes five years or more to become an expert operator. And so losing talent in operations, in maintenance, in machinists, there's just no expectation that people that would be coming in new entry-level positions would have the same level of efficiency or expertise as people who have been at these jobs for a long time. So restarting is much more challenging than sustaining.

Thank you. We'll leave it at that. Thank you again. Secretary Silva, can you please call the next item?

Directors, that places you on item number seven, presentation and panel discussion regarding SFMTA budget outreach and community feedback.

Good afternoon, Chair Tarloff, Vice Chair Kahina, directors, colleagues, members of the public. I'm Judson True, Chief of Staff and Director of External Affairs at the SFMTA. And I'm going to do a very brief presentation before we get to the panel discussion, which I'm very excited about. And I think we've just been talking about outreach a little bit with regards to possible scenario planning for the ballot outcomes. But what I'm going to do is go through quickly what we've done on outreach to date related to the budget and our financial situation and give a little bit of a preview of some other activities we have coming up as we head into the real busy time before LIKELY BUDGET APPROVAL IN APRIL.

SO I HAVE A CLICKER HERE.

OH, IT'S ON THE TABLE. ALL RIGHT. SO ONE THING, ONE POINT I WANT TO MAKE TO START OFF IS THAT, AND JULIE ALLUDED TO THIS A BIT EARLIER, WE'RE IN AN UNUSUAL POSITION WHERE THE OUTREACH FOR OUR TWO-YEAR BUDGET IS NOW FINALLY FULLY ALIGNED WITH THE OUTREACH AND DISCUSSION AROUND OUR FISCAL CLIFF AND THE OVERALL FINANCIAL CONDITION. For a number of years now, the agency has been planning for the fiscal cliff, and now it aligns with the budget. Many of our presentations and communications across the city have intertwined those issues, but they really are fully kind of overlapping at this point. So for simplicity, we've divided the phases of outreach into three, one of which has been completed. beginning last fall, and there's nothing, again, magic about that date because we were doing significant engagement with the community funding working group and other efforts, but we began more targeted outreach on the budget. We had an online and paper survey, which I'll talk about in a little bit more length, that we also used pop-up stations around the city to reach folks. And then there were a number of local measure round tables. Some of you participated in that and those. related to that effort. And then there have been dozens of community presentations to specific groups, labor, business, community, and I'll go over that a little bit. And then right now we are working on nailing down dates for two community open houses, a virtual budget listening session, and those community presentations are ongoing. And then finally, as we head toward approval in April, we'll have some more community presentations and tabling, and then we'll be reporting back to stakeholders across the city on outcomes of the budget process and what we have headed toward the next segment of time. Below is just a different representation of all the items that you've heard. And of course there are more to come. In terms of soliciting community priorities, we did do... You know, we have a website that we're still adding to, but that we launched. There is the survey. And then we did, and I apologize for the little typo there, we did shelter ads for the survey. And then we also did quite a bit of social media. And I'll talk about that when I talk about some of the demographics that we had. And then another way we reach folks is our very excellent blog. For those of you who don't follow it, please do. It's a great way for us to communicate We did the pop-up stations in December, and you'll see a little bit more about those. And then we have about 60,000 subscribers that we reached via email. We hope that they spent a few seconds looking at it. Quickly on the numbers of the survey, we had over 5,000 responses, which is a very high number. My colleagues say it's more than we've gotten for similar surveys in the past. The pop-ups were all around the city and we did get a number of survey scans from the pop-ups and then we had almost 400 paper submissions, Chinese language submissions. This is just a map of the city that shows you where the pop-ups were. This is what we used to call when I worked in Sacramento, a version of a NASCAR letter when a bunch of organizations sign on with their logos, but our team showed These are just some representative logos of all the groups we've talked to and met with about the budget. It doesn't mean I'm not by our use of these logos in no way implies endorsement of anything by any organizations, to be clear. But I wanted to just show just how the variety here from our labor partners. I know a colleague, Katie, was at YTAB last night. We've got a number of these coming up as well. On the survey, to go into a little more detail here, it was running between October and January in four languages with quite a different number of ways that people had to access it. The QR code on paper at some of the pop-ups and then on social media and the email. I think I'm not gonna spend a lot of time on the feedback because none of it is very surprising, but we heard that, and I think this is just a measure of how much the conversation about muni funding has sort of permeated the city. 80% of residency in need for additional funding. There was a widespread recognition of the importance of muni to the economy and to the recovery. And the respondents cared about what we care about, which is prioritizing fast, frequent, and reliable muni service. And the takeaway was that people want muni to work because muni matters, as we've talked about. This is a little bit on who took the survey. We had fairly frequent riders with eight to 10 respondents riding two to three times a week. And then two to 80, about the same number saying that they walked as a, not just to get around the house or something, but as a means of commuting to a place they need to get, which I think is noteworthy as well. So that gives a piece of that. And almost half driving, A quarter bike or scooter. Again, a little bit more detail on the need for funding. 64%, almost two-thirds, saw a great need for funding. And extremely important to the economy, 85% of the folks who said it was important to the economy said it was extremely important. This was a little bit of a sort of forced prioritization for the respondents, so we asked to put one or two priorities. Every single thing here is important. So there's not, nothing on the list is not important, but the respondents prioritize fast, frequent, reliable service with 70% choosing that as their first choice. We did have a number of those questions related to fairs and fair policy. And we did wanna note that among the respondents to the survey, at least, maintaining our fair discount program, both for seniors and low income residents and for youth was quite important. There were concerns expressed about fair compliance and making sure that we are doing what we can so that everyone is paying their fair share. And there was keeping the Clipper discount was the lowest of the priorities that we had for fair choices in particular. The demographics of the survey, I think we worked hard. Our team worked with our community liaisons, with a variety of community groups to reach across the city. We can always do better here. We did see a high click-through rate of Spanish and Chinese language ads, and there's some updating of this data that still needs to be done regarding the paper surveys that we received, which, as I mentioned earlier, were largely Chinese language. So we will continue to work to do even better here to make sure that the folks we talk to match our ridership as well as the city as a whole. The next phase, just going through quickly again, some of what I was talking about with regard to the open houses and the virtual meeting. We will share those dates widely as soon as we have them this week. We're continuing to use the other tools at our disposal, social media, ads, and our emails and blogs. And that will continue really this month and the very first part of March are the key times for us to be doing this budget specific outreach. Today is also, of course, an important part of it with all the folks who are here listening and participating. And then again, we'll be more talking about outcomes as we head into the third phase. and kind of what's next. I'm sure we'll be talking about the scenario planning and those sorts of items in the April and May timeframe. I now want to ask the panelists, the community panelists to please come share the table with the board of directors and Julie, and Victoria and I will move into this phase of the discussion. And I can of course take questions on the presentation after the panel. I am, good afternoon again, everyone. I am still Judson True, Chief of Staff at the agency. As I've discussed throughout this whole process, we have made it a priority to engage a diverse set of perspectives and voices because we know that community matters to everyone in San Francisco and we need to make sure that all community voices are represented. A core part of the work we do here is to make time to listen to the needs of the people we aim to serve and make decisions that are informed by those perspectives. Today, we've assembled a panel that includes representatives from youth, labor, business, community, and advocates to share some views. Of course, our panelists are not fully representative of the entirety of the city in any way, but we have members of the public here and we are, of course, engaged with all the groups we mentioned in my last presentation. We've got about, I wanna first thank all the panelists for being here. Thank you for making time on a Tuesday afternoon to join us. here at our workshop. We've got about 45 minutes of Victoria Wise, streets director, and I will take turns asking some questions and then we'll leave some time for board member engagement as well. I wanna start by introducing the panel.

Jacob Benman from SF New Deal.

Maybe raise your hand when you might introduce. Nicole Christian, SEIU 10 to 1. Mason Ngo from Youth Transportation Advisory Board. Let's see, Emily Loper from Bay Area Council. And then Jaime Valoria from SF Transit Riders, very familiar face. And Rosa Chen from Chinatown Community Development Center and the Community Equity Working Group. Okay, I'm gonna turn it over to Victoria. Do you wanna stand up or do you wanna use that?

Thank you, Judson. And thank you so much to all of our panelists for being here today. It's been a very serious conversation on a very serious topic, but I do just want to take a beat for a minute and do something more fun and ask you guys if your friends had to describe you as a muni route, which muni route would you be and why? And maybe we'll go from left to right. So I'm going to kick it over to you, Nicole, because I know you've thought about this a lot. I know you have. Go ahead. Start us off.

A quick housekeeping item. WE WILL NEED YOU TO TURN ON YOUR MIC SO THAT'S PRESSING ON THE RED STAR TO THE MIC NEAREST YOU AND TO SPEAK RIGHT INTO THE MIC SO THAT EVERYONE CAN HEAR. THANK YOU.

I DON'T KNOW THAT I WOULD EVER CATEGORIZE MYSELF AS A BUS LINE. POSSIBLY, WELL, I RIDE THE 9, SO I'D SAY THE 9 SAN BRUNO. IT'S THE, ONE OF THE MOST PROBLEMATIC LINES FROM MY ESTIMATION, SO THAT KIND OF FITS ME. AND IT GOES ALL ACROSS THE CITY AND TOUCHES QUITE A FEW DIVERSE NEIGHBORHOODS. SO I WOULD SAY THE NINE. GOOD LUCK.

THANK YOU. AND THANK YOU ALL FOR THE INVITATION TO BE HERE TODAY. MY NAME IS JACOB BONDMAN. I'M THE COFOUNDER OF SF NEW DEAL AND OUR PROGRAM OFFICER. I'D PROBABLY SAY THAT'S 33. I FEEL LIKE IT'S A NICE BALANCE OF PRACTICAL. YOU'RE GOING A LOT OF PLACES, BUT THERE'S ALSO SOME VIEWS AND FUN ALONG THE WAY. SO I TRY TO HAVE A GOOD TIME.

The 41. I lived in Russian Hill for many years and then spent a few years off of Union too. So I stuck with my bus route before moving to East Bay.

I'd probably say the NJUDA because I live like right against it and also because I kind of like the NJUDA. I'm quite busy nowadays. Yeah.

I think for me, it would be the 12. And that's mainly because I grew up and live right outside of the 12 line. So that's like my home line that I use to get everywhere from going to Foodco and going to Costco with my mom and helping her carry everything from Costco to go home. So that would definitely be my line.

For me, it's probably not a surprise that the 31 Balboa, you know, it goes through different neighborhoods. And it was also the line that shifted my advocacy from the Tenderloin to citywide and into transit. And it's also stubbornly going to be always there like me.

Thank you, Christine. Those are really good and fun answers. I think for me, it's the 38 because it's a workhorse. I don't know. Jetson, for you.

I'll say 38R because it sometimes skips a few stops, but also works hard and moves fast. And I do take it because I live near there. All right. Now to the much more serious topics. Rose, I'd like to start with you. We just finished talking about our scenario planning and the potential consequences if one or both of the revenue measures fails, cutting muni routes, significant layoffs, you know, reduction in our ability to deliver safer streets and maintain our fleet. Can you talk a little bit about what muni means to you and your community and what those service cuts would mean for your community and for San Francisco, please?

Yeah, of course. Just to give a bit of background, I obviously work at Chinatown CDC, so the community I work primarily for is going to be Chinatown. I also work with Chinatown TRIP, and so we do a lot of work regarding transit lines in general and transit and or different modes of transportation for the community. And so, you know, with being in that community hearing about all of the cuts that may happen if none of the ballot measures get passed, I think it's very troublesome. I think it's very worrying to hear about when the neighborhood that I represent and call home heavily rely on transit. It is one of the most important things they use. It's probably constantly crowded every single day in Chinatown. Even the T line is super crowded. which is amazing to hear as well. But I think it's worrying to know that some of those lines might have to get cut and it's going to have to happen citywide. We understand that lines have to be cut everywhere, but when it has to get cut in a very vulnerable low income neighborhood that's very troublesome when the folks there heavily rely on transit to get to work every day to get to school every day and that's coming from someone who like i grew up in chinatown i went to school using the transportation lines like i remember going to school in sixth grade all by myself taking the 30 bus to go to marina right and so those are things that are like heavily used even to this day and so i think to hear about the possibility of all of these cuts, it's going to hurt. And I know that the community is already up in arms about MTA. They already don't trust Muni. Folks in Chinatown are not happy about Muni in general already. And so to know that there might be even more to come, I think it just makes it really bad for the look for muni and i don't know if you can ever repair that relationship with a community if you were to do more damage than what is already there and that's going to be the hardest part i think mta staff has been trying really hard to repair that relationship after the central subway construction um they're still working on it it's not going so well still um i think folks want to be hopeful, but there's just a lot of past trauma with working with Muni for the community that makes it really, really hard. And so that's going to be one of the biggest worry I will foresee for my community is that they'll see this as a way of like Muni is turning their back on us once more and that we don't matter. and that you're putting a very vulnerable community to fend for themselves and figure out how to get to where they need to go without muni. I think that's the same to be said for the rest of San Francisco, right? You know, we're not the only vulnerable population, only vulnerable neighborhood in San Francisco. You're talking about multiple neighborhoods that rely heavily on muni. And so I think for me, one of the biggest things that I see is If we had to do a lot more cuts to come, I don't know how you can convince voters to vote and support more money to support Muni if you can't continue to provide the services they need. I mean, I think this is the same as like the chicken and egg question. Like what needs to come first? I think both is very important. You know, you need the service and you need the money. But sometimes folks, you know, in the community, if they don't see the service they're being provided, they'll be like, then why should we give you more money? And that's going to the biggest hurdle we have to solve is how do you convince those folks to be like, no, we need to vote for it because we need to maintain even the service we currently have.

Thank you for that honest answer.

Thank you. Jacob, you are up next. So we know that the pandemic was very detrimental to small businesses and with higher prices, you know, it's just hard altogether to make it in San Francisco as a small business. When you think about SFMTA's overall portfolio, can you share a little bit with us what you think our agency should be doing, could be doing to really help small businesses thrive?

Yeah, thank you for the question. Our programs serve about 2,000 small businesses across San Francisco. And over the past five years, in partnership with the city and a number of other organizations, we've delivered over $50 million to support small business operators and really showing up every day for San Francisco. I think what is really exciting for us about the small business owners that we work with and small businesses city-wide is they show up with a lot of love and respect for their community and their employees and the work that they're doing, but truly the challenges are ever mounting for small business owners in the city. And so much of our city's economic and cultural revitalization is really falling onto small business owners to carry. And the reality is that many challenges that small business owners face transcend the scale of their business and transportation is certainly in that category. Because of the cost of living in San Francisco, which is a core challenge for small business owners, many small business owners and their staff rely on transit to get to work every day. In a place like San Francisco, having reliable, safe, and dependable transit is really critical for small business owners. When we survey small business owners and ask them about their challenges, frequently hiring and retention is among the top three challenges that small business owners face, and those challenges are directly tied to transportation and cost of living. And when small business workers can't get to work easily and safely they don't stay in those roles and small businesses, as a result, have a lot of turnover of staff and so building a foundation of. Safe and reliable transit really is critical for small business owners to be successful and for their employees to have dependable employment. particularly in the moment that we're in right now in San Francisco, there's a lot of aspiration for what we want to see as a city and the types of uses that we see expanding for small business owners. And so things like downtown, we want to have an expanded nightlife and entertainment sector where we have businesses open late night and opportunity to bring kind of new uses to the downtown core that is only possible with a robust transit system. We can't have bars open until midnight if those workers can't get to work and get home safely at night. And so a lot of the challenges that small business owners face really reflect the challenges that San Francisco in general confront in navigating the city. I think what's really important to emphasize for small business owners is there isn't a safety net of other options. These are not employees that can afford to take other means of transit or own cars to get to work. When there aren't safe and reliable options, small business is closed. And that ripple effect really confronts not only kind of the communities that these small businesses are a part of, but really the tax revenue that we have in the city and a bunch of other economic factors that are tied to kind of a thriving small business ecosystem.

Thank you, Jacob. Mason, I'm going to turn it over to you. And you have been a leader, a youth leader in the space through your participation on YTAB, for which we're very grateful. And so I would like you to share with the MTA board kind of a two-part question First of all, what do you want this board to know about the youth perspective on SFMTA's budget? And second of all, if you could share with us what has having free muni meant for the youth community so far?

Okay. I'll answer the first section which I heard was what sort of stuff I would like to share with the board regarding youth perspective. From my experience in communicating with a lot of youth, at least for context, I went to public school at Lincoln. I've now since graduated in my first year at SF State. A lot of youth, I feel like, while they do have some amount of the mistrust with muni, I feel like it's much less than, say, a lot of the older working adults and stuff. almost a lot of the youth I interact with, even if they don't use Muni to get to school every day, they do use Muni to some degree for like other purposes. And I feel like it's quite important that, I guess I'll probably link in both parts of the question too, because I think it's quite important that free Muni for youth is also part, like given to youth, because like with that, like it's, Muni is something that could be relied on by like students and stuff. It's not something you have to worry about And if they are able to use it more, then they get to understand the system more and they'll have more trust with like stuff like this when we have budget situations if we're able to communicate to them that, if we're able to communicate, if they are able, hold on. I think it's fine. Okay.

All right.

I know it's tough.

It's quite tough.

It's totally tough. Take your time and we can totally come back. Maybe if you need a minute. It's hard.

Yeah, absolutely.

All right, Judson, shall we do the next one?

Sure.

All right. Nicole, thanks for joining us today again. Your perspectives and insights have been invaluable throughout the community funding working group process and in our conversations, you know, even in recent weeks about the scenario planning. Can you talk a little bit about what the potential cuts both in service and personnel would mean to the people you represent, like your permits and citations colleagues, parking control officers and others? you know, share a little bit about any other perspective that you want the board to be aware of and us as we move forward.

Okay. That is a loaded question. I'm listening to everyone speak about how important Muni is as far as the public facing side of it and how communities at risk, low income, elder communities rely on Muni and SFMTA as a whole. And it's tough. IT'S REALLY HARD BECAUSE ON THE ONE SIDE, I HAVE MYSELF AND MY COWORKERS, ALL 6,000 OF US. AND THEN ON THE OTHER SIDE, I HAVE THE COMMUNITY THAT WE ARE VERY PROUD TO SERVE, TO ASSIST, AND TO UPLIFT EVERY DAY. THE HARD PART IS WHEN I SEE THOSE NUMBERS THAT IF THE PARCEL TAX OR IF THE REGIONAL MEASURE DO NOT PASS, THAT'S A THIRD OF OUR WORKFLOOR. there's only 6,000 of us. And we're spread across so many different departments. As an agency, we have some of the most progressive and amazing discounts for low and no income families. We have free muni for youth, free muni for seniors, free muni for the disabled, and free muni for homeless, those experiencing homelessness. We also have discounted rides, Clipper Start, LIFELINE THAT PAY A FRACTION OF WHAT THE REGULAR UNIFARE IS. AND IN PAST YEARS, THE AGENCY HAS BEEN SUBSIDIZED BY REALLY REPREHENSIBLE PEOPLE, LIKE, YOU KNOW, THE BIG CEOs THAT WERE PULLING IN MONEY HAND OVER FIST WHILE ABSOLUTELY NOT PUTTING ANY MONEY INTO THE INFRASTRUCTURE. AND THE AGENCY STOPPED DOING THAT, AND NOW WE SUBSIDIZE IT OURSELF. which is great. On the flip side of that, we're not bringing in that revenue. The agency cannot afford not to offer that service. They also cannot afford to sustain it the way it is right now. Having 2,000 people lose their jobs, that's 2,000 families. we cannot afford to look at them as individuals. In a lot of these cases, they are the sole breadwinner or they make enough to sustain the home with help from their partner, their children, however it works out in their family. That is 2,000 families that will have to decide between rent and food. THAT WILL HAVE TO DECIDE BETWEEN FOOD AND GAS, FOOD AND COMMUTING, RENT AND PAYING ALL THE REST OF THEIR BILLS, CLOTHES FOR THEIR KIDS, MEDICAL CARE. IT'S NOT JUST A MATTER OF IF THE PARCEL TAX AND IF THE REGIONAL MEASURE DON'T PASS. I'M LOOKING AHEAD BECAUSE I SAW THE NUMBERS, AND THE NUMBERS ARE DEVASTATING. AND ON THE OUTSIDE, FROM THE COMMUNITY PERSPECTIVE, THERE IS A LOT OF MISTRUST BECAUSE OF MUNY'S HISTORY IN THE CITY AND PREVIOUS LEADERSHIP, NOT CURRENT LEADERSHIP, PREVIOUS LEADERSHIP WHO MAY NOT HAVE BEEN AS HONEST AS THEY SHOULD HAVE BEEN AND WHO MAY NOT HAVE BEEN AS FISCALLY RESPONSIBLE AS THEY SHOULD HAVE BEEN, BUT WE CAN NO LONGER BLAME THEM BECAUSE GOING FORWARD, WE HAVE TO MAKE A PATH THAT SUPPORTS THE COMMUNITY, BUT ALSO KEEPS THOSE 2,100 JOBS IN HOUSE. WE HAVE, SEIU SPECIFICALLY HAS SOME OF THE LOWEST PAID IN THE CITY, BUT YET THEY BRING IN SOME OF THE HIGHEST REVENUE. AND BEING AN ENTERPRISE AGENCY, WE SHOULD BE DOING SO MUCH BETTER THAN WE ARE. BUT BECAUSE OF ALL OF THE PROGRAMS THAT WE HAVE BEEN ABLE TO offer to the community at large we now need help we need the the public to understand that we are subsidizing all of these programs on our own our one-time federal funding it's gone this is the last year we have no more we need them to support us now EVEN WITH ALL OF THE BAD BLOOD, EVEN WITH ALL OF THE HISTORY OF CUTTING LINES IN UNDERSERVED AREAS, WHICH JULIE HAS SWORN THAT SHE WILL PRIORITIZE THOSE LOW INCOME AND AGING POPULATION AREAS BECAUSE WE HELD HER ACCOUNTABLE AND SHE'S HELD US ACCOUNTABLE TO ASSIST HER IN DOING SO SO THAT LABOR IS ON THE GROUND IN LOCKSTEP WITH THE AGENCY. but I don't know the perfect plan ahead. I just know what we need, what we have at our disposal and what the agency can do as far as more outreach, targeted outreach, DIFFERENCE OF OUTREACH. I KNOW THAT BECAUSE IT'S POLITICAL, THE AGENCY IS LIMITED IN WHAT THEY CAN SAY AND DO, BUT THERE'S ALWAYS OTHER AVENUES THAT CAN BE APPROACHED. THERE'S OTHER OPPORTUNITIES FOR OUTREACH AND FOR CONVERSATION SO THAT EVERYONE IN EVERY DISTRICT Because the truth of the matter is quite a few city employees do not live in the city and county. But we rely on the city and county just like the residents do. And we need to reach out to our families. We need to have that positive message telling everyone, you need to support Muni one more time.

Thank you for that, Victoria. Thanks, Nicole. All right, Jaime, you're up next. You represent over 500 transit riders and we're very proud to carry pretty much half a million folks on Muni every single day. So I'd love to hear from you, our board would love to hear from you what your membership thinks and what you would want to share with us given our very serious budgetary constraints coming up.

Yeah, thanks for having me here again. You know, since I started, you know, with transit advocacy from restoring a service, I've seen it from the start that there is an operational deficit that has existed to pre-pandemic. And, you know, whenever we haven't, as a membership, we haven't really had a robust discussion on the budget cuts. As I mentioned earlier, we're stubborn. We've been focused on trying to find revenue for it. We've always been opposed to cuts because, We want this city to embody what a transit-first city is. We want transit as, you know, the main preferred method of travel in San Francisco. So, you know, we've been pushing a lot in terms of getting revenue measures there. You know, I'm glad there's two coming this year. I wish it started earlier. You know, we're also just been thinking about after these two ballot measures are passed, it's still not enough, right? We want expansion. So we're also looking at it in a longer-term review. But the common things that we've heard whenever we try to discuss budget cuts is always don't put it on the backs of riders. We're always opposed to higher fares. We caution the agency if we rely too much on fares. um that would really cause more problems later on because it's really expensive to run transit there's only so much you can charge before people start using other modes of transportation um now we have competition with like robo cars and whatnot um and also you know the the good thing about you know transit is Now, everybody says, you know, they love Muni. We've seen it in the working groups that everybody is all are are all in alignment in terms of like funding transit. It came from, you know, the housing organizing world, and that's been pretty polarized. So with the discussions on transit and transit funding, I feel hopeful that's like one of those issues that we are finding kind of common ground. But, of course, you know, the most divisive thing we've kind of heard is whenever parking is being discussed. Our members are always, again, we don't want it to be in the backs of trans riders. We should also look at increasing revenues from parking. I mean, earlier with the fines, our membership would prefer to see that, you know, much higher rather than decrease. And then also our members are always interested in improving transit. You know, we have kind of projects that are member-led from determining, you know, how can we make our bus shelters better? So we're always looking at it on how to make things better. I might think we're in denial about the funding issue, but I heard it last week during the hearing for expansion of Central Subway, is you know you don't really start projects by talking about the cost first right you know we want to have a vision and we figure out how to fund it we know we're a wealthy wealthy city we're a wealthy region the political will is there we can we can find it so yeah that's pretty much it

you jaime for that um i was at the agency when the central subway was kind of getting going so it's uh it's been amazing to see that conversation continue um i want to ask emily the the last question to one of the panelists so both with the emergency relief funding for transit during the pandemic and with the more recent efforts including the regional measure at the state level there have been significant they've been consistent calls for greater accountability and efficiency from lawmakers, from business community. And we at MTA do welcome these conversations because we do want to hold ourselves accountable. We are committed to continuous improvement, and we're always looking for opportunities to deliver better outcomes and service. But I did want to ask you, as you and your colleagues in the business community consider our fiscal situation, how do you think about those kinds of themes around accountability and efficiency and what you're hoping to see? What would success look like to the Bay Area Council and other colleagues of yours on those topics.

Thanks, Justin. So just by way of background, the Bay Area Council represents over 350 major employers across the nine-county Bay Area, and I'm proud to say that we have been working to improve our public transit system since our founding 80 years ago. So the founders of our organization came together to advocate for the creation of the BART system to help get employees to work in a post-industrial economy, and that leadership has continued over the many decades to lead funding measures to support the improvement of our public transit system around the Bay Area. And that's no exception today. Right now we are working on leading the campaign to pass the regional transit measure along with many partners including SEIU 1021. This is because the business community recognizes that our regional economy depends on our ability to move people around the region and get people to and from work. And so it's not just the major employers with dense urban areas that are well served by transit for whom their employees can easily take transit to and from work. It's also the major employers in less in areas that are less well served by transit, but recognize that without these transit services, hundreds of thousands of additional cars would be on the roads and it just would be a traffic nightmare. So really proud of the recognition of that among our members and their leadership in helping to fund and run these campaigns. So because of the necessity of transit for our regional economy, we have been laser focused on what it will take to pass both of these measures, both the regional measure and the local measure to ensure that Muni doesn't have to undergo these really severe budget cuts. And so throughout the process, especially beginning last year as we were developing the framework for the regional measure, You know, we look to polling that clearly indicated that we are in a very high tax sensitive environment, much higher than we were when we passed other measures. And certainly when we passed the last regional measure in 2018, pre-pandemic and the economy was booming, et cetera. So we did a lot of work to focus on what the polling showed. And it shows that the primary reasons that voters would oppose the measures are beyond a general concern for a high rising cost of living as everyone is feeling right now are threefold. One, a distrust in how our public agencies would use the funds, a belief that there are existing funds available that are just not being used as efficiently as possible, and a general skepticism about that additional funding would lead to improvements. And so fortunately, we see a path to overcoming those concerns. And that was the work that we did for the regional measure, ensure that there were very strong accountability and financial efficiency improvements baked into the measure in order to sell it to voters. I just wanted to clarify that. It wasn't just what the business community that I represent wanted to see. It is what the polling clearly indicates that the voters need to see in order to approve these measures and avert these service cuts. So as was talked about earlier, the regional measure has these accountability provisions, go beyond just a general oversight of the expenditure of funds to include this financial efficiency review, which is a third party coming in to identify opportunities to cut costs without compromising service. So not just flashing budgets. And I hesitate to use the word efficiency in this year of Doge. It's not like cutting, slashing budgets and service. It's just identifying as we have seen some other regions do previously to identify ways to cut costs while maintaining that service and improving it for riders. And then as we were developing that framework, then Julie and team went ahead and started doing it herself and really applaud the work of the agency to start to implement that culture of efficiency and really gain incredible trust with the public and that it has clearly paid off. I mean, it's clear that the budget deficit would be much larger had those changes not been put into effect, but really, as I said, regaining or proving that public trust with the voting base to show that going forward, all taxpayer funds will be used as efficiently as possible to continue to improve on service, even though we have to adapt to this longer term, lower revenue environment. So success, that was a great metric of success. This review will be done once the, hopefully, the measure is approved and just to identify any other potential opportunities to operate as efficiently as possible. But that kind of work is, I think, critical to restoring support for passing what will be two measures in this county.

I will remember one of these times. Thank you for that answer, Emily. Before I ask a question of all the panelists, Mason, was there anything you wanted to go back and add from your answer earlier?

Yes. Regarding back to the youth perspective, there was one note that I wanted to make very important is that sometimes I've encountered with folks even in YTAB but also, of course, in like other agencies like San Francisco Youth Commission and also folks at schools where, There is like a feeling of like being ignored in SFMCA sort of decision making. Unfortunately, even considering agencies such as YTAB and then also our coordination with San Francisco Youth Commission, youth council, several other youth councils about cities and other nonprofits. There is a barrier entry for like meeting spaces such as this. Right now, of course, it is school hour. So while I'm representing YTAB, I am technically a college student. YTAB is mainly a program aimed towards high school youth. None of them were able to attend today's meeting. We also had concerns about how we kind of lacked resources. But regarding being able to outreach to youth, we are roughly a 15 to 18 youth body. And that's the point. that's pointed by application. And while I will applaud Lawrence Feston, our coordinator for running our program, we are concerned that we don't have that many tools in order to conduct our outreach. A lot of our work relies on word of mouth and limited sort of use of our connections by email with folks at the SFUSD public library and of course, San Francisco Youth Commission the rest of the city government. We don't really have much connections with the public, especially youth in high schools and stuff. And one other thing I wanted to point out in the survey that was mentioned earlier today's meeting, which I'm lovely to hear that there are like 5,000 responses to it. I'm a little concerned that there were only 2% of the responses came from youth under 18. Even if I count include 24 and under, that's still only 4% of the respondents. And I'm concerned because that is also like similar sort of numbers in terms of like based on that percentage out of the 5,000, that would be about 1 to 200 people. That is roughly also the same number of people that went YTAB and Youth Commission conducted. well, maybe not Youth Commission, I can't say for them, but for YTAB, that's roughly the number of people we got for like our surveys as well too, I believe. So I believe there should be more work involved and effort in getting youth voice heard. Perhaps it could involve more resources into sending like other SFMTA staff beyond like folks at YTAB to schools, but there will have to be a lot more discussion regarding that in future.

Thank you very much for that Mason and I will definitely follow up on that and make sure we're partnering fully to get the word out on something like the survey or other outreach we do. So that's a really appreciated point. And it kind of is a nice segue into the next question, which is for all the panelists and feel free to just speak up and give everybody a chance to answer. We've asked, as we do outreach in general, throughout the budget process and the discussion of our fiscal cliff, what do you need from Muni? And that's my question for you all. What do you need from uni? What advice do you have to the agency this year in terms of how we can show up and do our best to continue to meet the needs of the community and maybe do better on meeting the needs of the communities that you represent? So I think that's kind of a real set of action items for us. And feel free again to just jump in. Who wants to go?

I'll go first from the employee perspective. So it's weird because people who drive every day think transit fares should be higher, and people who ride transit think parking fares should be higher. Don't do that. Don't do that. So we have some of the highest parking citation fares in the Bay Area. Like if you just go 20 minutes away, the rates decrease by more than half in some cases. And we have our parking control officers who do an incredible job of trying to recover as much and create as much revenue as possible. But it's reality that when parking fines increase, so do assaults on our parking control officers. When transit fares increase, altercations with bus drivers and operators happen. So the board has to really take that into account. We already have some of the highest fees and fines out there. I know this is not a popular idea, but increasing those creates problems across the board. It's not going to solve our issue. It's not gonna solve our deficit. please don't make my job and my coworkers jobs much harder by increasing already exorbitant fines. I know that's very unpopular. Hey, I'm the nine line, I'm unpopular. But one thing I would like for the agency to do when you're doing your outreach and you're working, I'm hoping very closely with the board of supervisors to make sure that every aspect, whether it be youth, or low-income, senior, whoever it is in their district knows why they're voting for this. Because let's be honest, nobody wants to pay a tax. Nobody wants increased taxes. Nobody wants more of a fiscal burden. We all get that. But the truth of the matter is you have to pay to ride muni. in some form or fashion, whether it be on the back end or at the fare box. We need that support. So I would really like the agency to not only reach out to the employees that live here, but also reach out to the board of supervisors, make sure that they are having robust outreach in their own districts. Trust and believe that SEIU is talking to them as well about having these robust town halls and outreach. and I know that the agency has to be very, very careful in its political outreach, but at the same time, we have buses, trains, we have cable cars, we have bus shelters. There's got to be like a QR code where, hey, click on this and just get more information. We're not saying vote for it. We're not saying here you must have this, but, and I think Mason may back me up on this, People love to click on a QR code, and they will click, and they will get information, and they can make their own decision. But we are making it readily available. We are making it easy for them to access, and we're not overstepping our political. But we have to do something. We have already learned that when labor, community, and the agency are not in lockstep, we fail. We fail altogether. In this particular case, we cannot fail. We need it to pass.

I know it's not a shy group. Others?

Sure. Thanks. So general request is to continue to focus on the rider experience, making the rider experience as, you know, build on the improvements that the agency has made certainly over the past year, safety, cleanliness, overall comfort, seamless integration with the other systems in the region. fair payments like the Tap to Pay launching, things that really excite riders about making the system as attractive and comfortable and enjoyable as possible. And then on behalf of the employers in downtown San Francisco, I just wanted to thank you for thinking through innovative ways to restore express bus services that serve downtown. You know, we know that employers are increasingly requiring their employees to be in office more and more days a week and has even increased over the past year. And they rely, their employees rely on, you know, those commuter services. So despite a very difficult, you know, budget situation, really grateful for the work of the agency to identify ways to you know, still serve those communities, get people back downtown, which also helps drive the general fund, which then feeds back into the budget. So hopefully it's a virtuous cycle and more that those types of changes we hear from our members that the employees are just thrilled and wild about it. So more of that positive messaging as we go into November is great.

Yeah, so for us, San Francisco trans writers, I believe we've been having a pretty decent relationship with MTA. You know, the agency's been pretty transparent, been open to, been responsive to a lot of our requests about information. And the information is also pretty consistent. And so we want that to continue. But I would also advise MTA to also continue San Franciscans' successes. the agency has had. I know a lot of the focus are always on the negative, some of it deservedly so, but we should also look at the positive. And I think I've seen it on social media and the post that y'all are talking about how important transit is. And then also kind of hearing from the folks in the panel, try to figure out how you get to those communities that are tough to outreach to. You know, that's my job is to do outreach. It's really difficult. So, you know, I understand, you know, from the Chinese community, you know, you have to build relationships. It's like a different way to engage the youth. You know, they are our future, but they're also the most gung-ho about transit. And yeah, utilize advocates as much as you can. I think, you know, we bring a lot of positivity and especially in a polarized kind of situation that we're in. And, you know, transit, as I always mention, it's like a good metaphor of how we can connect as a community. I mean, just like hearing all the folks on this panel who might be in other issues, might be on different sides, but we're all in alignment with transit because we all know how important that is.

On the line of outreach, I also like to suggest regarding youth outreach too. I've actually found out the existence, at least from other former YTAB alumni, of actually transit clubs and stuff existing in a lot of several SFUSD schools. And I think trying to not just communicate with school administration themselves, but then also with students directly, either through class presentations. I know Lawrence our staff running YTAB is currently, well, was currently at, previously at Lincoln earlier today, presenting to a class there, or like tabling outside regarding like any sort of service changes, which I know is a thing that happened before. But there's a lot of outreach opportunities and stuff that could be done, I feel like, at SFUSD and also private schools too. I know YTAB also represents several private schools, YTAB folks are on from like those types of schools too. And also like, I feel like social media presence is like super important. Unfortunately for YTAB, we were recently told we're not allowed to have a social media account of our own. However, if like we're able to be able to post on like say the SFMTA's Instagram or like on XR, like any sort of media like that as like our like like from our voice, I think that could resonate a lot more with youth in the city who honestly a fair amount of them do look at Instagram.

Thank you. Yeah, I would just flag that I think it's hard to overstate how vulnerable the current ecosystem is for small business owners in San Francisco. a lot of what has happened since the pandemic is that small business owners have had to navigate kind of a host of complex challenges that were not resolved kind of post-pandemic in 2021 or 2022. And small business owners today are really on the cusp of trying to figure out, is it even viable to be an operator in the city? And in the face of that, cuts like what's being proposed to address the shortfall really are existential in scale. And so I would just flag that. In our work with small businesses, a challenge that often arises is that For many business owners, the scale of their universe is the business. And it's really challenging for operators to show up at town halls or meetings or out and about in the neighborhood because they're running their storefront every day. They're engaged with their customers and their community. And our team is often going one-on-one with business owners to speak to them in their native language in tools that they know how to access to really get the information that we need to do our work. And so I would encourage SMT to do that as well to really meet business owners where they're at, but also to understand that the challenges small business owners face are really shared across the city around affordability, around late night and early morning access, around dependability, around safety. These are core challenges that small business owners and workers face every day that they rely upon to operate their storefronts and that really kind of build the foundation for the cultural and economic health of the city as a whole.

I think for me, obviously one of the main things for a lot of the community and for the Tarantown community in particular is like, you know, just maintaining the service and safety of Muni is very important for them. But I think even more importantly, I can't believe I'm going to say this. Sometimes less is more. And sometimes when you want to do more for a community, they don't want it. It makes it worse. And I'm saying that just because I think, I appreciate that folks want to repair the relationship with the community, but sometimes the community may want a break from everything that's going on. Maybe they need a break from just like constantly being bombarded by everything that's happening and seeing that you're constantly trying to reach out sometimes can also feel very, very hard to take in when they're like, I already have a lot on my plate and now you're telling me you want to meet about this. and you're telling me that we got to meet in two days, like I don't got time for this, right? Sometimes that's how they feel because they feel like there's just so much that folks are trying to focus on. And that I think that's not to say that you guys should do less work, but I think it's just a matter of like, there's this fine balance that we've constantly been saying, right? There's this balance of like, how do you balance the workers who work at MTA and the communities who need this and all the other folks who like require muni? And so there's always this fine balance. And so I think finding that balance is gonna be hard. I don't think anyone has an answer to what that balance will look like. But I do think doing the necessary outreach and trying to understand what community needs are directly from community is going to be very important and key as to how you can get folks to regain their trust in the community. Because I think a lot of folks, when I hear in the community, when I talk to them, a lot of times they're constantly telling me, where is all these new projects popping up? Like, we never knew this was happening. Why is this happening? Who asked for this? And I'm like, I don't know either. Like, I don't know where this comes from and we have to go back to MTA and ask them, right? And so I think for them, it's a lot of like, they want to know what's happening, but they want it to be in a way where it's actually a conversation with the community and less so of you sending out an email or just like, hey we're doing this it's like where's the conversation happening, where you can actually build the Community. into the projects you're working on or whatever topics that you want to talk about for the Community like how are they starting to be part of it in the very beginning, and I think that's going to be very important. Moving forward long term in like rebuilding trust with Community.

Thank you all for the incredible specificity of those answers we're going to. transition to have the board, see if the board wants to ask any questions or if Chair Tarliff wants to move to public comment, but I thought I'd summarize a few things I heard. One was, one thing that keeps coming to me and maybe it's because you spoke at the end, Rosa, but outreach is not just about talking to people, it's about relationships and it's about having those, the dialogue when there isn't something on the table and making sure that people know, you know, who to talk to about what, that there's open lines of communication and that we do even more to build deep relationships across the city. That was really, that came through. I did hear that we're doing some things all right, but we can do better. And that's helpful because I do think it's important this year for us to tell stories about where we are succeeding, often in collaboration with community and with the labor business, small business, communities and others. So I think that's something I heard from the group. And then I just think so many, just the creativity that each of you had in your answers about how we reach different communities is really, really helpful. I will definitely take you up, Mason, on the social media collaboration. Parisa, I saw her nodding during that as well. So we will follow up on that, absolutely. And I just wanted to thank all of you, you know, from me and my group who helped plan today. Victoria, thank you for helping ask the questions. And I wanted to turn it back over to Janet. I'm not sure if you're doing public comment or if you're going to start asking questions of the panel, but there we go.

Yes, thank you, Judson. Yes, I think I will move to public comment. Oh, wait, no, let's. While it's all fresh in our minds, let's have board questions and comments, discussions with the panel. Thank you so much, panel, for being here. Directors. Yes, please.

Thank you so much for joining us today. I'm not sure if all of you heard the breadth of all the different issues that we're tackling in this meeting, but it's a lot, and it's so... I don't know, it's affirming to hear that you also see that it's a lot. It's also quite... humbling to know that we're doing this all together. What I did hear across the board from everyone on this panel is that there is a real effort from each representative on this table to help with the lift. And in a moment where, you know, it's seven of us that are hearing this information meeting after meeting, it is definitely something where It is wonderful to hear how community is coming out to support with this lift. So just deep appreciation and thank you to each one of you for being someone who's helping with that load that we're all carrying right now on our shoulders and staff as well. I did hear, you know, when it comes to our outreach strategy that we want to make sure that we're surgical about it and trying to figure out a way to not contribute to outreach fatigue. in this moment. And so I'd love to hear from you all, like if there is something that you have seen has worked as you have been communicating to community members about some of the very serious issues that we're facing, some of the things that, you know, we could be doing better on that front QR codes, you know, later use QR codes, whether it's social media with youth. But things that we should be tailoring because it is a moment where, as we're all trying to figure out how to stabilize this agency, it's really important for folks to understand this message. And in communities where there are a lot of issues around trust, that could definitely be a barrier to just start the conversation. And so I'm just curious to understand from your vantage points, How do you get beyond those initial barriers of I don't trust you and there was a past harm here and how do we get to a point where we start having the constructive conversation about how do we get out of this situation?

I'll start because while working on ViTub right now and also last year when I was actually a member, For the past year and also coming up this month, we are running a youth roundtable. And with this event, we've been trying to get as many youth leader voices as we can to the same table, almost like sort of the service situation. And it's a much better way of having a more positive dialogue of what sort of issues youth face with public transit that hopefully is more understandable for a more useful sort of information for the board. I feel like through the roundtable measure, we are also going to be able to find even more sort of youth voices, at least from my context of like representing youth through the roundtable measure, which this month will be on 21st for us. We're trying our best to reach out to as many youth organizations throughout the city as possible through collaboration between YTAB and also the San Francisco Youth Commission and the District Youth Council. We're trying to get as many other youth councils as possible. And we're also in the middle of trying to do outreach through flyers and, again, QR codes as much as possible. And we'll try to get that out as soon as we can for this upcoming roundtable. Stuff like that I think could totally help out for like different communities having like a specialized event cater to certain community could help perhaps.

Like focus conversations and yeah.

Yeah. I would also flag our team has done a lot of outreach and partnership with OWD and planning and DBI and fire. For a lot of small business owners, a city employee showing up triggers a compliance concern really quickly. I think the nuance of this SFMTA challenge doesn't totally exist when a business owner is navigating a lot of different city agencies at any given point in time. So I think partnering with CBOs that have trusted relationships, a lot of our outreach strategy with small businesses is to partner with a small business to then invite their community to come to an info session in their network. And I think acknowledging that many small businesses that you're trying to approach might also have challenges with their shared space that they're confronting. And having that conversation is going to trigger a bunch of other challenges is often what we're working with one-on-one. And so I think certainly our team has worked closely with a lot of enthusiastic city employees who are doing that outreach. And also we know that small businesses very quickly are nervous about the implications beyond what the outreach represents.

That's a fair point.

I think something that I'm going to suggest that's actually not really doable is from what I said earlier of like building relationship. That's very important. I think one of the reasons why I have loved working with some of the communication staff at MTA, like I adore working with like Lulu and Jesse and other folks that I've worked through many different projects. And it's because we've had that relationship working together in a very small group. Sometimes having just large meetings to tell people things aren't going to give that connection that people need to feel like they can trust you. And sometimes it's how you, the way you build those relationships is through tinier, smaller meetings and like making them feel like you're actually trying to build a relationship with them one-on-one. And the reason why I'm saying it's not really doable is because I think these staff, who are amazing staff, who are working very hard, has a lot on their plate. They're trying to cover as much ground as possible on many, many projects, so to ask who are doing communication to build that relationship with every single person in the community who are very vocal, that's really hard. I know that's not doable. Like they don't necessarily have that time to do that, but something as simple as that is what makes a difference for some of the folks in the community to feel like they have someone in MTA they can talk to. So it might not have to be that one singular staff, but knowing that you have someone to go to, that you can feel like they will listen to you, and actually hear you makes the tiniest difference that can have a huge like ripple effect throughout the community right because if you can get to that one person who's super vocal in the community who who might be super negative but they you can get a staff person to change their mind they can change the tone of a lot of other people right because what you're trying to get to is the influencers in the community um to change that throughout right and so i don't know how to do that necessarily because um with the current like state of things, but I think that's how I feel I have trust in MTA even through this entire process is because I've built those relationships throughout the years of working with them individually and continuing to feel like I can reach out to them for any questions I need, even if they're not on the project, just to check in.

Thank you so much for that. My last question to the team is, You know, we heard from Director Hemminger in particular that, you know, this issue is not just a muni issue, but rather it's a regional issue as well. And so I wonder, as different leaders in your respective communities, has there been any effort to, you know, check in with folks regionally and see if there are folks from, you know, the business community in the peninsula or somewhere else or members of SEIU who, like, might take, like, BART, for instance, to get to their jobs if there is an effort to, you know, I'm very grateful for the support you're giving us, but also to figure out how the regional impact of the situation is being communicated to folks in your respective communities.

Yes. So certainly As I mentioned, we represent employers around the whole Bay Area and through our leadership in the regional measure, the Connect Bay Area measure, we are certainly engaging stakeholders around the five-county region where they'll see the regional measure and messaging about how interdependent these systems are and our whole, as I mentioned, regional economy is on on the passage of both measures.

Yes, did I answer your question? No, you answered it.

At the Barrick Council, we always think always regionally and how the impacts of what happens in one county and how so many of the employees who work or take muni within San Francisco are commuting from other counties too. And so it's all interconnected. Right. Yeah. Thank you.

For SFDR, we partner with other transit advocacy groups in the Bay. We're waiting for the local measure signature gathering to start happening so we can start talking about both at the same time, especially San Franciscans. And we're also, I mean, me personally, we're also looking more on a state level, just because there's much more money on the state level that can go down to like, you know, transit-dependent communities and also looking at, you know, how do we build more of like an influence in Sacramento, for example? You know, California is a very car-centric state because, you know, that's where the infrastructure got built in, but how do we also, you know, figure out how we can improve transit across the board you know because you know other rural communities might still need transit even even out here in the bay area i remember going out somewhere in the east bay and taking bart to go to a meeting space and the infrastructure from bart to that meeting space is terrible like they even have any bus signs and You know, in the back of my head, maybe they should put more money in these other communities. But, again, muni also is very important, so we also need a lot of that. So, yeah, we're doing our part to kind of talk about those because we do recognize that we need to pass both measures. And also, you know, we're a Bay Area, so we need to have more Bay Area pride there.

Thank you, Vice Chair Kahina. Any other directors have questions for the panel? Dominica.

Just one quick question. I heard, Jaime, you mentioned that you spend a lot of time thinking about revenue generation. And so I'm just curious if you got some non-proprietary, you know, good ideas that you want to throw out.

I mean, just because of my values, obviously taxes. I mean, on the regional level, right, I always kind of use this thing, you know, it's a very wealthy region. You know, maybe a 1%, 2% wealth tax would be great. But of course, you know, you do need that political will. It's really difficult to do that. And again, taxes is, you know, like was mentioned earlier, It can be difficult to pass because of, you know, costs, you know. I mean, just looking at the city budget outlook earlier was, you know, frankly depressing, right? There's a lot of money being put into these corporations, but it's not kind of spreading throughout everywhere. So then if that bubble bursts, what happens, you know? So I think we should, like, think more about how do you, GENERATE REVENUE ON, LIKE, A LARGER SCALE VERSUS JUST THE CITY. THIS WAY, YOU KNOW, WHAT'S EXCITING ABOUT THE REGIONAL MEASURE IS WE'RE LOOKING AT IT REGIONALLY. UNFORTUNATELY, NOT ALL COUNTIES ARE INVOLVED. IT WOULD BE GREAT IF ALL COUNTIES WERE INVOLVED. AND I ALSO LIKE, YOU KNOW, FOCUSING ALSO ON BUSINESSES. BECAUSE USUALLY WHEN THERE'S SOME TRANSIT INFRASTRUCTURE, AGAIN, PARKING LOSS, BUSINESSES ARE GOING TO BE speaking out against it. So again, developing those relationships would be great so that there's like a better understanding of why it is better. Or if it's not better, then it's good for MTA to understand that. And same thing with transit advocates so that we're not just all in our transit bubble.

Great. Well, I thank you so much, panelists. FOR BEING HERE TODAY, FOR TAKING TIME OUT OF YOUR DAY. AND I DON'T WANT TO EXTEND YOUR TIME ANY LONGER THAN NECESSARY, BUT I AM REALLY STRUCK BY A LOT OF THE ISSUES THAT YOU'VE ALL RAISED. In particular, Rosa and Jacob, I think that the communities that you represent have been through it in a very particular way, maybe for different reasons, but, you know, the small business community, what those business owners have endured since the pandemic is really a remarkable shift, both during and in the aftermath. And then Rosa, for the community in Chinatown, so dependent on transit and so vulnerable to what happens when well-meaning efforts are made to improve it, but the short-term challenges that that creates are incredibly impactful. And so just to both of you, I wonder just in the, in the spirit of finding positive ways to take what we've learned from these really challenging past few years into the next months as we see what will happen. in terms of funding for this agency and potentially further impacts that would have a very significant negative consequence, I think I can say, to your communities. What do you feel are the most important positive messages to send to your communities, whoever wants to go first. Or if you don't understand my question, feel free to ask for clarification.

Yeah, thank you for the question. I think many city departments, including SFMTA, have had to navigate over the past few years kind of this gap between perception and reality around the challenges that the city is confronting. And I think certainly there have been a number of examples like projects on Valencia and TerraRel, which have really highlighted this tension that emerges, particularly among small business owners, where kind of the goodwill of the department and the intention of the project kind of becomes lost to the story that is understood by small businesses and the reality that they confront. And so I think as SFMTA navigates this moment, really doing a lot to create kind of a lockstep between the perception and the story of the projects and the reality of what they confront is really critical to build trust with small business owners and to understand kind of the realities that they are facing. I'd say in the positive framing, we have a lot of examples of how small business owners can organize when things get really challenging. And I think I would just frame that as an opportunity for SFMTA to see small businesses as possible champions for this work when they are bought in and believe in what's possible here. And I think in moments like this that are really challenging around kind of a lack of service, it's really hard to have an abundance mindset about what is possible for transit and what is possible in San Francisco. But I'd really maintain that small business owners inherently are really optimistic about what's going to happen in the city because there's no other reason that you would open a small business in San Francisco because the odds are stacked against you. I think for the small business owners that we work with, it is most obvious on day one that it's not a get rich quick. It's like lose money slowly and it will be very challenging. And so when they were doing it, they're not looking... for a handout. They're not looking for like a, here's the free pass to make it all work. They're looking for partnership and support. And so I think going to small businesses and saying, we're in a tough moment, like certainly every small business owner is familiar with being in a tough moment. Like this is not going to be a radical out of left field moment for them, but really understanding core and central what success would look like for them and bringing them along for the process, I think is really critical. And I think In our programs, I know it comes up not only for SFMTA, but for many departments, it can feel like you've done a bunch of outreach and then you talk to the business owner and the business owner says like, this is the first time I've heard of it. And it's like, we've been flyering for two years, right? It's really challenging to do that. I think Rosa highlighted this in her previous remarks, like business owners are so much more successful at talking to other business owners than your team will ever be. Like they're really good at having networks and communities. And I would really index in that methodology and approach. I would not suggest that you need to talk to every single business on a corridor to say we've done outreach. You need to build trust with business owners who have that network. And it takes time and resources and support to figure out who those people are. SF New Deal, a lot of our peer organizations, some up here know who those people are. We were happy to try to be that bridge and to try to be that connection. But I think certainly trying to understand what are those existing networks of care? How can you leverage those networks and really use kind of the trust and partnership to make small businesses a champion of this moment and make small businesses and their networks and communities kind of partners in navigating this moment.

Very helpful. Thank you.

Yeah, I think similarly, I think for my community in particular, I think when you want to talk about the positives of Muni and what they've done for the community, it's really hard, I think, in like a work training, someone said, you remember all the negative things that someone has said to you and you will only remember one positive thing. Like you'll remember all seven negative things and you'll only remember one positive thing, even if there's more positive things that's been said because the negative things stick with you more. But I think one thing that worked a lot when I do work in the community and was an organizer and had to organize for Central Subway because I did the Central Subway outreach with the MTA outreach team was, I ALWAYS EMPHASIZE TO A LOT OF THE FOLKS THAT WE WERE WORKING WITH THAT WERE VERY UPSET. I ALWAYS TOLD THEM THAT THIS IS A JOINT EFFORT. WE HAVE TO WORK TOGETHER AND WE CAN'T DO IT WITHOUT YOU. AND THAT THEY RECOGNIZE THAT THEY UNDERSTAND THAT THEIR VOICE IS JUST AS IMPORTANT TO BE HEARD. AND I THINK THAT'S KIND OF WHAT YOU HAVE TO DO MOVING FORWARD, RIGHT? AND LIKE FOR EVERYTHING WE WORK WITH THEM IS THAT WE HAVE TO REMEMBER AND CONSTANTLY REMIND FOLKS THAT LIKE THEIR VOICE IS IMPORTANT. and that we want to hear those voices and that we can't do it without them and that we all have to be doing this together and that it's not that we're just trying here to get money for MTA and that's it. It's like we're here together to get to the bigger goal, right? It's like, you know, you have all these complaints about Muni. You have all these complaints about what we're not doing. Let's work together to get there. And the only way we can get there is with you helping us. And you've done that in the past. You know, you worked with us through all these other projects that we were on opposite ends on, you know, we've come together and we've got the final results, right, that we wanted together. And so I think that's going to be the main thing that we need to do with a lot of the community folks who are not happy, like is reminding them that they are important and that they are the positives as to why we keep doing the work we do. Why do we have all these meetings if we're just going to constantly be yelled at by them? Why are we doing all this? It's because we value them and we value the importance of like what they bring to the table. And so I think that's going to be very important and highlighting.

Thank you so much. Colleagues, any other questions for the panel? I think it might be. time to let them go or you're welcome to stay as long as you'd like. We reserve time for public comment for this item. So I'd like to open public comment for two minutes each.

Can I suggest we give the panel a round of applause?

All right, with that, members of the public wishing to provide comment will have two minutes each. I will warn you at 30 seconds, and also when time is up, please queue up on the right-hand side of the room. Thank you.

Thank you, panelists, and all of you for the discussion of a lot of great points, and thank you for sharing your perspectives. I actually wanted to talk about the thing that MTA refuses to talk about. We've heard in this session a lot of really cataclysmic proposals for what will happen to transit service, right? Like looking at just these horrible scenarios of huge cuts to transit. We have heard proposals to take the pittance that you poured forward for walking and cycling safety and pushing that into the operating budget for revenue. The thing we haven't heard you talk about once is getting more revenue from parking. Uh, that is, uh, and what's weird about this few things that are weird about this one is this board of directors in 2016 said, we want to charge parking. We want to enforce parking meters on Sundays and evenings that has never been enforced. Your revenue panel has been invoked a few times. They said, get more revenue from parking. They said it is fair. It is consistent with your equity values. It is consistent with your environmental values. But you never discuss it. And I've watched a zillion muni budget presentations. So, you know, I come to MTA meetings and, you know, I'm a sustainable transportation advocate. I'm for walking. I'm for cycling. I'm for transit. I feel like those modes are always on the chopping block here. Always. There's always some proposal out there that's going to hurt those modes more, the people who use those modes. We are constantly being traumatized by the MTA on this. People who drive and park, well, we don't want to offend you, right? We can't offend your delicate sensibilities by even discussing the prospect of doing things like charging for parking meters on Sundays. So we'll cut transit service regionally on Sundays, but we won't charge at parking meters on Sundays. We won't charge in evening. So please, please, please put those options on the table. They need to be on the table. You need to discuss them. You need to discuss them alongside these other options. It can't always be taking away from people who walk and cycle and take transit in the city. It's not fair. It's not just.

Thank you. Next speaker.

Howard Wong with Save Muni. San Franciscans and voters are pretty even-keeled and even-minded. We've passed a lot of bond measures with two-thirds votes. I'LL BE AT THE, YOU KNOW, WE ARE MORE, HAVE MORE RENTERS THAN PROPERTY OWNERS, AND THAT PERHAPS CREATES AN ANTI-TAX COMPONENT OF OUR POPULATION WHO OWN PROPERTY, BUT EVEN THEY AND MYSELF HAVE, I PROBABLY VOTED FOR BONDS 99%, 95% OF THE TIME. THERE ARE, YOU KNOW, A HISTORY OF TAXES. VOTERS DID OVERWHELMINGLY REJECT A MUNI SALES TAX A COUPLE YEARS AGO. IT DID REJECT THE MUNI CAPITAL BOND A COUPLE YEARS AGO. BUT IT'S ALSO PASSED A LOT OF GOOD MEASURES. AND AS MANY OF YOU HAVE STATED, IT IS ABOUT CONFIDENCE IN HOW MONEY IS SPENT. OVER THE DECADES, YOU KNOW, MY GROUP HAS BEEN OPPOSED TO MANY CAPITAL PROJECTS WHICH HAVE SPENT BILLIONS OF DOLLARS with low ridership projections and even worse ridership when completed. Voters want to see what they see all over the world. They want to see transit systems that are robust, that have high ridership. San Francisco's transit mode share has been around 24, 25%. AND IT WAS EVEN DROPPING BEFORE THE PANDEMIC. SO WHAT THE VOTERS AND CITIZENS WANT TO SEE IS THAT THE AGENCIES, TRANSPORTATION ADDORITY, SFMTA, MTC, COORDINATE TO CREATE PROJECTS THAT INCREASE TRANSIT MODEL SHARED DRAMATICALLY SO THAT WE START MATCHING SOME OF THE GLOBAL BEST WORLD-CLASS TRANSIT SYSTEMS IN THE WORLD. AND, YOU KNOW, REMEMBER THAT SAN FRANCISCO IS CONSIDERED ONE OF THE BEST IN THE COUNTRY, IF NOT THE WORLD. BUT IT COULD BE SO MUCH BETTER. WHY 25% WHEN WE SEE 40%, 50% TRANSIT MODEL SHARE IN OTHER CITIES? AND THAT'S WHAT CITIZENS WANT TO SEE. THANK YOU.

THANK YOU. NEXT SPEAKER.

Hi, good afternoon, Director. Zach Lipton. Really appreciate the thoughtful discussion from the panel and from everyone all day today. I'm part of the team running the signature collection effort for the regional measure, and it's been really incredible to see just this huge coalition coming together for the fight for the funding this agency needs. The volunteer enthusiasm is incredible. But with my streets for all San Francisco hat on today, I want to stick up a little bit for the streets budget here. I was really struck by the slide that you saw at the very start of today that only 3% of the budget is going to street safety and functionality. Certainly no one wants to pit streets and transit against each other. Both are obviously essential and we all recognize the moment that we're in. I just want to ask the board to reflect on whether that 3% really represents the agency's commitment to Vision Zero. We know that these projects are some of the most cost-effective things the agency can do. I think we often hear 70, 80% of the cost of some of these projects are going to outreach right now in an environment where the agency has to do more with less. That's an expenditure that isn't working. We hear a lot about building and rebuilding trust. And so often that's framed as we need to move slower. We need to do more outreach. But I submit that when there's projects like Arguello or Ocean Avenue that are promised and they're quietly delayed for year after year, that's wildly corrosive to trust too and has a real impact. There's such an incredible team in Livable Streets that's doing really transformative work for our city that, frankly, I want to make sure these people stay with the agency and have the resources they need to get things done. I'm particularly concerned about some of the proposals to direct more of the street, the Prop B funding to maintain existing assets.

30 seconds.

That law requires funding go to projects that, quote, improve street safety for all users. And I want to make sure it goes to projects that really improve safety and doesn't just maintain it. While both are important, it's the improvement that everyone's looking to see. So thank you all for your work today. I appreciate it.

Thank you. Any other speakers for this item? I'm seeing none in the room and no accommodation requests.

Thank you. I will close public comment. We are going to move shortly to closing remarks. I believe Director Kirschbaum, you may have something you wanted to address that I wasn't sure what it was.

Thank you for that opportunity. I just want to clarify that when I shared the distribution of agency spending, that that was specifically related to the operating budget. And the 3% on street safety is a broad set of functions, everything from maintaining our traffic signals, to repainting crosswalks, to our crossing guard program. We also spend tens of millions of dollars to build new infrastructure and to upgrade infrastructure to deliver on our street safety goals. And we will, when we start talking in more detail about the capital budget, make sure that we bring that level of detail to the board. thing that I have been using that slide for is in part to explain that there isn't a scenario where we can stop doing everything else but transit and still balance our budget because that is not how our spending is allocated but to also when I'm out talking to community groups you know to really clarify that we are delivering an ambitious street safety program that I'm very proud of, but it is for the most part coming from grants and other very specific funding sources, not our ongoing operating budget.

Thank you for that clarification. Vice Chair Kahina, did you have any remarks you wanted to share?

yeah sorry I didn't get my moment here with word with the panel so apologies for taking a second dip into into board discussion, but I did just want to elevate something that that jumped out at me when we're looking at the survey results. And part of the reason why I just want to bring it up now as we're trying to think of. the different scenario planning that we have and the type of outreach and engagement that we need to do, because it seems like it's gonna be heavily focused on transit, I would challenge the team to really try to consider matching as much as possible the demographic breakdown of our transit riders as we're trying to understand, did we get the folks that we need, input from the folks that we got? In particular, I noticed that the survey results, there are 8% of the respondents were of Hispanic and Latinx descent. When in other surveys, our 2025 onboard survey, the makeup of the onboard survey was 28% Hispanic, Latinx. And so as we're trying to, and that's a huge discrepancy there. So I just wanna make sure that the team has that in mind as they are approaching and we also had heard from the youth panelist saying that also really focusing on youth and the impact on youth is also something that we need to consider. I just want to make sure that the team has that on their radar, and this is something that is going to be considered as we scope out the next outreach strategies as we move forward with our process.

Thank you, Vice Chair Kahina. Any other of my colleagues want to make any, just share any final thoughts you have about how the day went? What, if there's anything that you feel you want to highlight or something that you missed talking about? Very good. Well, Secretary Silva, PLEASE CALL THE NEXT ITEM.

DIRECTORS, THAT PLACES YOU ON YOUR LAST ITEM, ITEM NUMBER 8, CLOSING REMARKS.

I really appreciate everybody's time today and thoughtful feedback. It's really helping to achieve my goal, which is to have the policy decisions and feedback early enough in the process so that Bree's team can be very detail-oriented in the actual complexity of loading the budget. So we're not there yet. We still need to see what these building blocks look like with the final revenue and expenditure forecasts. We also have some follow-up items based on what we heard today, but in my mind, we've made very meaningful progress towards a very complex budget. I also, you know, really appreciate the community panel and the opportunity to hear from stakeholders. What I thought was a lot of complex feedback you know that were in some cases pointing in the right direction but you know transit as all you know government work comes with a long history and a long set of relationships and we're going to continue trying to be open to and hear that feedback and continue to iterate and improve And to that end, I also wanted to give a thank you to our labor partners who listened to the first, they were the first audience for the worst case scenario presentation that I gave and, you know, really have been, throughout our budget process, providing a lot of input on what these difficult discussions mean for our staff. It takes a lot of work to put together a workshop like this one, and I'd like to thank the staff who made today's workshop possible. Christine, first and foremost. along with Carolyn Celaya and Kika Robinson-Lukman, who support her, Ann Fritzler, Angelina Tong, Kamini Lal, Pierce, Andrea Buffa, Kate McCarthy, Shana Dynes, Jessica Garcia, Sandra Padilla, Bonnie Jean Von Crowe, Nathan Stalmacher, Caroline Cabral, Amanda Eakin, Katie Ngadi, Alejandro Quintaro, Simon Hochberg, and Parisa Safarzadeh. And I also want to just take a moment to acknowledge the executive team who had a lot of input on the content, but have also been here with me today to make sure that we're, as a team, really understanding and processing your feedback. And that includes our fearless budget champion, Brima Horder, Judson True, Victoria Wise, Brent Jones, Virginia Harmon, and Oliver Guida. Thank you all.

Thank you, Julie. I guess it's up to me to kind of wrap this up. I would like to highlight for the record and for our own kind of understanding of what happened today. The themes and consensus points that were brought up during the discussion regarding the budget, that's the meat of what we were here to do today. If I have missed anything, please don't hesitate to let the staff know. I think would be the best way to do that. There was a great deal of consensus within the board that we would like to avoid the use of capital fund flexing. It's something we didn't feel VERY COMFORTABLE WITH. WE DID HAVE A GOOD AMOUNT OF CONSENSUS. I DON'T KNOW IF IT WAS UNANIMOUS, BUT THAT THIS COULD BE THE TIME TO USE OUR RESERVES We were generally supportive to use those as a one-time measure to help close the gap. Some of the figures that were put out there as ideas were 50% of the $100 million that we're missing could possibly come from our our reserve or even two-thirds. We did generally understand that we need to have a great deal more conversation and understanding about how if we were to tap the reserve, how would the repayment be structured, Our current policy as a reminder is that it needs to be replenished in the next budget cycle. And there was a general understanding that given our debt repayment, that would be a tremendous challenge. conversation for another day. We also generally supported using the fund balance. Those are previous savings from cost controls to help close the gap. We were open to modest increases in the Cable car pass fee that's been proposed by staff. The $15 all day muni pass that would be offered in place of a single ride. There was some discussion of making that 17 or possibly even $18 as a cost recovery for the agency. THERE WAS GENERAL AGREEMENT WITH STAFF RECOMMENDATIONS ON EFFICIENCIES AND REVENUE OPTIONS, AND THE SPECIFIC CONCERNS OR THOUGHTS THAT WERE RAISED WERE MOSTLY RESERVED FOR PARKING FINE RATES, SPECIFICS AROUND THAT. SO THAT, JUST TO FURTHER HIGHLIGHT THAT THE INFRANCE WOULD BE THAT WE WERE generally all right with the parking revenue recommendations from the staff and then the elimination of the clipper card discount and implementation of indexing in the second year of the budget and the fare capping proposal. So I don't want to If it wasn't discussed just by, and just because we were focused on other things, I don't want it to stand that, I just want to say that this is the takeaway for the staff since we did not raise concerns. there was a lot of acknowledgement that we are faced with very dynamic situations. And there's a great deal of uncertainty, especially as it relates to revenues from the state. And we are, you know, taking these licks as they are delivered. And the staff is I think doing a good job of keeping us informed. as we go along here, but we are, as a body, very anxious to get into those discussions as soon as we have more concrete information. One of the things that I said in my comments is that none of these are easy choices. We need to balance this budget and the afternoon Oh, it turned off. Having a budget that assumes no additional revenue that has been ACKNOWLEDGED THROUGH THAT PRESENTATION AND SPEAKING FOR MYSELF, I FEEL COMFORTABLE THAT A YEAR'S RUNWAY WOULD BE A CHALLENGE BUT THE FACT THAT THERE IS A PLAN IN PLACE IS IMPORTANT. Finally, the board expressed a desire to better understand the consequences of the decisions that we're being asked to make. Because today's meeting, we didn't get into the weeds on many of the topics that are of great interest to the public. or of great consequence to the solvency of the agency going forward. So I would really appreciate the opportunity for more detailed briefings on those types of topics. as we come closer to finalizing the different parts of the budget and the complete budget. And so those are the takeaways that I have from today's meeting. I'D LIKE TO JUST SHIFT TO EXPRESSING GRATITUDE TO THE STAFF ON BEHALF OF THE BOARD. IT IS, AS JULIE ACKNOWLEDGED, A TREMENDOUS AMOUNT OF WORK TO PREPARE ALL OF THIS MATERIAL FOR US SO THAT WE CAN MAKE INFORMED AND WISE DECISIONS. I have the general sense that the board is comfortable going forward with the budget process, having had today's meeting. And we are prepared for both success and a future where the agency is properly funded and for, you know, difficult outcomes as well. THE PANEL HAS ALL I THINK PRETTY MUCH LEFT, BUT I JUST WOULD LIKE TO ACKNOWLEDGE HOW VERY HELPFUL I FOUND THAT. I THINK THAT THE HEARING FROM DIRECTLY FROM PEOPLE WHO ARE WORKING WITH COMMUNITIES THAT WE serve and sometimes make their lives more difficult is tremendously important and those partnerships are critical to how we move forward here. I think that's pretty much all I wanted to say. I just want to thank you all again for taking a whole day to go through this very important work. And there's more work yet to be done. Thank you so much, everybody. Oh, I would like to open public comment on this item for two minutes each.

Members of the public wishing to provide comment on the closing remarks, we'll have two minutes each. I will warn you at 30 seconds and when the time is up. Any speakers can come up to the mic at this time for this item. I'm seeing none in the room and no accommodation requests.

Very good. We'll close public comment. Thank you, colleagues, staff, and members of the public. We are now adjourned. Our next meeting will be February 17th and March 3rd. Thank you.