Transcripts For SFGTV SFMTA Board Of Directors 20240712

Chair borden no, not on just that item, temporary versus permanent changes in ceqa. Yes, there is also an exemption for a Pilot Program and then there is the statutory exemption for emergency projects. Chair borden great. Thank you for clarifying that. Directors, are there other questions for the directors report, or comments . Great. With that, we can move on to the next item. I can say im personally excited about the extension of the 30 bus line. Madame chair, there was a request by a member of the public for the board to rescind the minutes based on the comments made and reapprove it and i would assume that i dont know if you want to consider that. Chair borden yes. Lets reconsider the minutes. Madame chair, you would have to ask for a motion to rescind the vote on the minutes and then to reapprove. Chair borden great. Wonderful. So that means just fort publics knowledge, were going back to item number 2, potentially. Is there a motion among the board to rescind the approval of the minutes . Motion to rescind. Chair borden a second . Director heminger second. Chair borden great. Roll call of the vote, please, secretary boomer. Chair borden aye. Director brinkman aye. Vice chair eaken aye. Director heminger aye. Director lai aye. The motion to rescind the minutes is has been approved. Madame chair . Chair borden with that, i guess we need a motion to amend the minutes to reflect additional context to director hemingers comments and i dont know if you have a recollection of those comments and want to add any sort of color or meat to that . Director heminger madame chair, i really dont feel compelled to alter the minutes on my account. And i thought the purpose of rescinding and reapproving the minutes was because there was a comment pending that we werent aware of when we approved them the first time. So i would move that we approve the minutes again now that the comment has been received. Chair borden okay. Is there a second to keep the minutes as they were originally written . Yes, second the motion to keep the minutes. Chair borden okay, secretary boomer, should we take Public Comment on this item . Madame chair, you have taken Public Comment on the minutes, so you do not need to retake Public Comment on the minutes. Chair borden wonderful. So with that, with a motion and second, please call the roll. Chair borden aye. Director brinkman aye. Vice chair eaken aye. Director heminger aye. Director lai aye. Madame chair, the minutes are reapproved and just for the record, the materials as requested by director heminger were posted on the meeting page right after the meeting. And so so the suggestion was heard and acted upon. Chair borden great. Next item. Item 8, this is Citizens Advisory Council report. There is no report today. Item 9, Public Comment. This is an opportunity for members of the public to address the board op matters within the jurisdiction of the sfmta board of directors that are not on todays agenda. We would ask members of the public that wish to address the board on matters within the jurisdiction not on the agenda, to please dial 1 now if youre on the phone line already. If youre not on the phone line already, please dial 888 8086929. The access code is 9961164. Please be advised this information about how to make Public Comment is featured on our web page and also on our agenda, so it is readily accessible and available to the public who want to know how to contact the board. Chair borden great. Can you confirm that sfgovtv is showing the crawl of the number . Is there any way you can make sure that is happening . Madame chair, i cannot at this time at this time i dont have access to that sfgovtv. I can follow up with them and relay the concerns expressed after this meeting. They are also on the line and listening to us as we speak. I can confirm its there. I just checked earlier. Chair borden wonderful. With that, well open up Public Comment. Moderator, please open the line. You have four questions remaining. Chair borden i hear a speaker on the line. Please start. Its again. First, i wanted to encourage you guys to look into opening kirkland and the divisions which have been closed on the weekend for a while now. Especially with all the buses going into the yards between each shift on the weekends when theyre closed. It leads to lower headways from late pullouts, especially on the seven line. And the n bus is not able to run the 60foot buses on the weekend because there is not enough buses because the creek is closed. On the topic of the 30 line, it doesnt pose a problem, because a 60foot bus is just as wide as a 40foot bus. In terms of demand, the presidio actually imnat actually eliminated the chrissy field route which was along the corridor. So it is appropriate. Because theyre not running that segment of the route and even when they do, they do not run a Comparable Service to the one provided by the 30 extension. Chair borden thank you. Next speaker, please. You have five questions remaining. Chair borden and members, mr. Dupri for the record. On general matters, i did read about a Scooter Company called revel that is now operating in San Francisco. This is going to help lots of people. So i am appreciative of this agency in approving the appropriate permit so we can add more vehicles for this most important service. Twowheeled vehicles are very helpful in promoting the distancing between riders. These are street vehicles so theyll be ridden in the street in the direction of traffic in accordance with appropriate vehicle and travel loss. Helmets are provided just as with the scoots. Helmets are essential in the riding of these vehicles. We want to keep people safe. And so thank you for helping to advance that conversation. I think its very important we continue to preserve some kind of access for people with disabilities to be able to get reduced fare clipper cards. I have not kept up with that closely because mine is still good for a few more years. Just because we close facilities doesnt mean we should curtail service. And i have to research this more closely, but i say to you that reduced fare must never mean reduced service. Besides, we want to get more people on clipper anyway and move away from selling scratchoff tickets. 30 seconds. Scratchoff tickets, thats the lotterys business. Thats a whole different animal there. So lets have a safe muni. Im looking forward to talking about the restart. And i do see the Public Comment crawl. It was not on at the beginning, but i got it off the agenda, so i have a couple of different ways. Thank you. Thank you. Next speaker, please. You have four questions remaining. Hi there. I also wanted to call in about the Company Named revel could you give us your name . What is your name . Ive been reading in the s. F. Examiner article, there are safety protocols, but they dont alleviate the concern there is irresponsible operator. The company has a history of accidents and death and the m. T. A. Needs to do a better job of looking at this [inaudible]. Thank you, next speaker, please. You have three questions remaining. Yes, hi, this is barry toronto again. First want to welcome the new director, sharon lai. I want to let you know that i work with the taxi drivers, im an activist taxi driver and i hope you will download the flywell app and also learn more about the programs that the m. T. A. Has helped to keep the taxi industry alive, barely on life support at least. Also would like to give a shoutout to phillip crana. Done yeomans work. I hope you will familiarize with them. He deserves an award from the board for all the yeomans work hes doing even though he became a far. Its not an even though, its in addition to the fact hes become a new father. I want to thank jeffrey tumlin. A lot of people are using them and ive taken them a couple of rides a weekend when i work. But, the thing is, it would be great to make sure this is extended for a while because its helped a lot of people that need to get around, especially later on at night. I do want to say there is a problem with 30 seconds. Im having a problem keeping the captains clear. Ive taken a number of passengers from the castro stand particularly by walgreens and they put up a sign saying its a cab stand. In the ground. I appreciate that. If you look into enforcement, particularly during peak time hours. Its very difficult to keep it clear. By the time a p. C. O. Shows up, theyve already gone and ive already left. So i want to let you know. Time. [bell ringing]. Thank you, mr. Toronto. Next speaker, please. You have two questions remaining. Next speaker, please. Can you hear me now . Yes. David again. Yes, i think we agree that the crawl across the screen is happening and thanks to sfgovtv for all of their work. Regarding director hemingers inquiry. The ceqa appeal today at the board of supervisors is about slow streets phase one and it is not my appeal. I was not aware of an appeal regarding fell street, but that is also not my appeal. I have two ceqa appeals, one about emergency transit lanes filed july 30, 2020 and one related to an emergency temporary street changes program filed august 20, 2020. The second one may be the secret program that director heminger referenced. And i may be filing additional appeals as well, so stay tuned. Thanks. Chair borden thank you. You have one question remaining. Good afternoon, board of directors. My name is ron ca tow. I wanted to say about the online consultation for the valencia street fulsome street sorry im not awake today the fulsome street bike lane that had an open house over the past couple of weeks. I wanted to compliment the staff that worked on it. I am a professional developer myself and i was really impressed with the presentation and the materials on the website. It was a super modern website and honestly, not something that i expected from any level of government in 2020, but it was super modern, super aggressive and whoever made that deserves several awards and pay raise. Chair borden [laughter] thank you for that feedback. Next speaker, please. You have zero questions maining. Chair borden that closes Public Comment and well move on to the next item. Thank you, madame chair. The next item is the consent calendar. All matters are considered to be routine by the board and will be acted upon by a single vote unless there is a member of the public or a member of the board who wishes to discuss an item separately. Ill read those items and then, madame chair, its the practice of the board to then open for Public Comment any and all of those items. So item 10. 1, approves various traffic modifications along fulton street. 10. 2, approvingle amendment number 3 to sfmta rail Vehicle Projects with raul v. Bravo associates to extend the term of the agreement for six months to march 5, 2021 with no increase to the amount of the contract. Madame chair, that concludes your consent calendar. Chair borden with that, well open for Public Comment or any item on the consent calendar. Moderator . You have one question remaining. Chair borden speaker . Hello . Hi, its stephen miller. I wanted to call in support of the traffic modifications. I believe thats 10. 1. Just for the fulton Street Safety project. Fulton is a very dangerous corridor as you all know. Im looking forward to seeing those implemented and hopefully it can speed up the 5 and the 5r as well. Chair borden wonderful. Any other additional Public Commenters on the line . You have zero questions remaining. Chair borden with that, Public Comment is closed. Directors, this matter is before you. Motion to approve. Second. Chair borden director excuse me, secretary boomer, can you please call the roll. Yes. Chair borden aye. Director brinkman aye. Vice chair eaken aye. Director heminger aye. Director lai aye. 50, the consent calendar stands approved. Moving on to the regular calendar, madame chair, directors, presentation discussion regarding the fiscal year 2019 state of good repair report and update on capital revenue projections and associated impacts due to covid19 Public Health emergency. Chair borden wonderful, i understand that there will be a presentation. Welcome. Good afternoon, chair borden and directors. Im jared winer, the manager of the s. F. Management unit. And today im going to give the first of series of fiscal and management updates. A couple of board meetings back it was requested that the finance division give updates on the fiscal picture. And outlook fort agencies. This is the first of those updates. So today were going to be talking about the f. Q. State of good f. Y. State of good repair and well be talking about the covid impact to revenue. The 2019 state of good repair report which is available on sfmta. Com is an annual report that the unit puts together. What it does, it tells the state and the condition of the agencys infrastructure. It also talks about our trends as far as state of good repair, investments. And it also projects out future infrastructure needs for the agency. So sfmta is responsible for nearly 15 billion worth of physical assets. And so we use asset replacement value as way to understand the magnitude and scale of the stuff that were responsible for. As you can see here, we break down the assets into different categories based on function. And this gives us a sense of where our physical assets are. One thing to point out, this is a snapshot, a point in time. Its all our assets as of f. Y. 19. We do update this every year. And so this doesnt include things like central subway which will significantly increase this total amount. It doesnt include new red lanes going in or fleet expansion. So one way that we kind of are able to look across the entire portfolio of assets, we use an agebased score. Just like us, assets age and they have a expected life. We use a 15 scale developed bit federal Transit Administration. 5 being brand new asset. 1 being one that is at the end of its useful life. 2. 5 and higher is considered in state of good repair. As you can see, overall, the agencys assets have slowly gotten older and based on their age have declined. You can see in certain asset classes, or infrastructure classes, the store going up. The score going up. Thats due to either fleet rehabilitation or replacement, or significant system upgrades. So in areas where we want to focus, we can raise the score. Again, this is agebased, so it doesnt take into account the actual, like, operating environment. For us, its a good way to look at the entire agencys portfolio of assets and find out where we need to focus our attention, maybe get more information, maybe rightsize it with condition assessments or field assessments, things like that. But its a good way to find out where our priorities lie. So just kind of understanding our approach overall. The Asset Management unit maintains our Capital Asset registry. This is a database of almost 5,000 records. Everything from fleet facilities to streets, parking. All those assets. So that database, we update every year. And we have some really basic information about our assets. We know inservice date. We have an estimated useful life. And we have a replacement value. With that basic information, were able to project out and see upcoming needs when things will have to be replaced or rehabbed based on the assets themselves. So, it kind of helps us make decisions as an agency, whether we decide to maintain our regular replacement cycles. Whether we defer them or make them sooner. Since we have a general idea of when the things need to be replaced, we can look at future needs and cash flows. Again, it also highlights areas where we need more information or need to conduct additional condition assessments to rightsize what we know of our infrastructure. So the Asset Management unit, we do an assessment and we project out 20 years worth of need. In this graph here, you can see 20 years in the future. Its broken up into two different categories. We have Transit Service critical. T. S. C. So Transit Service critical are things like our fleet, rail, overhead lines, other s. T. R. Are facilities, parking and traffic. Still important assets, but we basically created these two categories because we understand that the need outpaces what we have as far as resources, so this is one way to prioritize. I guess the other thing is that you can see based on the graph, there is areas where the need is much higher. Because we have this basic information about the assets, none of these things should come as a surprise. Areas where its striking, it could be due to if we procure an entire fleet in one or two years and they have a 12year useful life, we know that spike will show up 12 years before we can procure it. Facilities that have a long useful life, its easy to lose track of these things, but this projection helps us kind of look on the horizon for any red flags or things we need to start planning or preparing for. The agency has a 3. 2 billion asset replacement backlog. What that means, that means that is the total value of assets beyond their useful life. So, for example, like your car. If you have to replace the tires every six years and the tires are 400 and that sixyear mark happens and you decide to go seven or eight years, in the seven and eight years, you have a 400 backlog. Thats what the 3. 2 represents. For the entire 20 years, to eliminate the backlog and meet all of our Capital Asset replacement cycles, were looking at something of 632 million a year just to meet that state of good repair need. And so this is the different investment level. So if we had all the resources in the world, 632, wed eliminate the backlog, wed meet all of the scheduled asset replacements. At the bare minimum, 304 million annually for 20 years, we would address the needs of the Transit Service critical infrastructure. We wouldnt address the backlog. And then we would have all those nonTransit Service critical assets continuing to age and going into our backlog. The 250 million number here, this was our annual state of good repair commitment to the federal Transit Administration as part of our full Funding Agreement for the central subway. So how have we done . So this graph basically shows our investment trend. The green line is a running average of our state of good repair investment. The blue line is based on analysis of the different Capital Programs or Capital Improvement programs that weve adopted and actually spent. So like the Capital Program contains expansion projects. It includes renewal projects. So we look at each project and figure out how much of that project is going to and date of repair. Fiscal year 2015 2016 to 19, that real big jump in state of good repair investment is in replacing the feet. That help fleet. That helped our average a lot. As we know, the c. I. P. Is less than previous years as far as capital spending. Youll hear in joels presentation that due to covid, that total available resources is further at risk, which means it will be just harder for us to continue to make those investments and state of good repair because the total amount of resources is lower. So overall conclusions from the report. Basically, we know that the current level of investment is insufficient to meet even our minimum replacement needs. As joel is going to point out, future capital revenue is at risk, which makes it even harder and a challenge. So as much as we can in the decisions we make, we need to focus on making a higher proportion of our capital allocations really address projects that maintain state of good repair. Another thing, too, as were planning for a capital expansion, really understanding that as we expand the system and add new stuff to our streets, add new stuff to the Transit System, that all comes with an additional future cost. So really understanding the impact of that is important to our decisionmaking. And also as projects come up, asking the state of good repair questions. How does this project address an existing need . How does it improve infrastructure conditions . How does it improve the performance of infrastructure . How does the designer or the choices were making as far as scope reduce operating costs . And then also just how does the project help progress the agency toward our strategic goal of providing Transportation Services to the public . So, with that, ill open it up to any questions. Chair borden thank you. Directors, do you have any questions before we move on to the next presentation . Seeing none, well have the second presentation. Director brinkman sort of a comment or a concern. I know that im sorry, can you hear me . Chair borden i can hear you. Director brinkman okay, good. More of a concern. I know that these numbers are such a moving target these days. And i think the presentation is great capturing it at this moment. Im just always so nervous and concerned when i see any budget numbers when i see any budget numbers im sorry, i think my connection is having a problem. Im concerned when i have budget numbers about how much theyre going to continue to change. Okay, good, i keep getting a message on my screen maybe its not me, maybe its the presenter. Just concerned that the budget numbers are changing so quickly. I know weve talked about this before in terms of our operating budget and Capital Budget and state of good repair. And how often do we expect to be updated on these budgets . I think that director heminger requested we receive the operating budget update was it monthly or quarterly that director heminger asked . And it seems since were at september 1st, should we beee seeing the july be seeing the july budget actual report as well . Hi, good afternoon, director brinkman. To just answer some of your questions very quickly. The information that jared just shared with you on our Asset Management and state of good repair, that is longitudinal data. So those numbers are very stable and year after year we produce this report, the data only gets better and more stable for us to do those Predictive Analytics that jared just discussed. Specifically on the operating budget, you are correct, we just finalized our july financials are complete. We have a good sense. The last thing we it need to do is allocate cost to projects. Which is something we do we just went through our yearend close fort prior fiscal year. So the Accounting Group has been trying to close fiscal year 1 and close up and clean up all the books for fiscal year 20. I think at the last meeting director tumlin presented our baseline on how we want to present that data to the board as part of his directors report and next month we can give you a good sense of where we stand. But the numbers that jared just provided are stable and sound and what we use to do a lot of our Capital Planning and reflect the infrastructure needs of the system. Which he just showed you is well over 600 million a year to keep our Current System as it is in a state of good repair. Joel will follow shortly after the presentation with where we are with the capital revenues specifically. Weve been so focused on operating budget, were just starting to get a sense of where we are with the Capital Budget sources that fund our projects. Those are fluctuating wildly. And joel will cover that. And you are correct with that. Thank you. Is that have you had all your questions answered, director brinkman . Director brinkman yes, that was fine, thank you. Chair borden thank you, direct director lai. Director lai apologies to anyone who already knows the answers to these questions. Can staff share the method in which you come up with this amount of, irguess, the i guess, the total of repairs costs over the 20year horizon and how potential future technology is factored into the replacement costs or the decisionmaking between repair, replacing existing systems, versus investing in a new system that may have other efficiencies . Yeah, so right. We use our Capital Assets inventory as kind of our basis. And so every year we look at new assets that are going into the system, but we also kind of reevaluate some of our assumptions around useful life. We do this by talking to the different Capital Programs. We talk to their engineers. And adjust useful life, adjust replacement values, based on the current procurements or what theyre actually seeing as far as performance in the field. So thats how were constantly kind of revising our model to run this analysis. But i do think, yeah, changes in technology, changes in even the service that the m. T. A. Provides will influence things like such as the backlog. You look at some of the items in the backlog. You have things like parking garages. So as we decide how we want to move forward with parking garages, that could change. And, yeah, it all all of this feeds into the model and hopefully helps us make the decisions of whether we do maintain replacement cycles or perhaps we only we program in maybe one or two replacement cycles with the knowledge that a specific asset will be replaced by something completely different in the future. Director lai so to director brinkmans good point about how this is an evaluation in a current place in time, it sounds like there is a process where staff continually evaluates the decision between replacing versus investing in new. Which sounds great. Then maybe just some clarifications. I believe all the values were seeing now are in present value. Can you talk about whether or not the costs that youre reflecting is estimated all in costs, including financing costs, or is it just in the cost of procuring . It is in it is in dollars and it is just it is just the replacement cost. It doesnt include soft costs or planning or design costs. Director lai great. I think obviously, 632 million a year for 20 years is a huge sum of money and the fact that were already 3. 2 billion behind is also something we need to keep in mind. And you may be covering this in the revenue side of the presentation, but there is this, i think, interest in exploring or at least for myself, how we can more efficiently structure adjusting paying for these repairs, necessary repairs. Whether there is soft from staff or at a concept level, the decision between paying more of a lump sum up front versus spreading out carrying the repair costs over the 20year horizon, because obviously, you know, paying for things now will be cheaper in economic theory than paying it in the future. Also factoring in anticipated inflation rates increase. So maybe staff can just address that at a concept level what that may mean for us in terms of comparing paying outofpocket more versus less. Sure. Director lai, just to address that question. The m. T. A. Regularly does financing and we have an i dont go revenue bond program. As an example, our first revenue bond in 2012 and 2013 was for our parking enterprise. Where we took a revenue bond against our parking revenues to reinvest in our garages and reinvest in the parking infrastructure. So we are constantly evaluating the cost benefits of various investments. In fact, now were reviewing the Interest Rates and what were paying on our current financing and bond program. So we look at state of good repairs need. Looking at the reduced costs of maintenance and operations, that struck by investing in the stru didnt buy a complete replica of the car, we looked at new technologies and more efficient ways to deliver that same vehicle in service. And those enhancements were integrated into the vehicle. Because if we dont have 200 components in a door, it reduces the amount of maintenance. If we have a more reliable vehicle, that means were not paying as much in overtime, revenue hours, so we always look to enhance the infrastructure. And sometimes, to your point, that little bit of enhancement on top of that base infrastructure, has a lot of operating and maintenance savings with it. So we definitely do take a look at that. Part of todays presentation was to sort of lay down the foundation that 600 Million Dollars is a lot of money to keep our Current System in a state of good repair. Were lucky in any fiscal year to set aside 200 to 270 million a year. So the asset conditions are continuing to decline. Our backlogs are continuing to increase. This is why we have the general Obligation Bond program through the city, why we do our revenue bond program, why we need the proposition k sales taxes. This system needs investment and we constantly have to advocate for that and this data is an important part of us doing that. Chair borden thank you. Director, have you had your questions answered . Director lai yes, thank you. Chair borden other additional questions before we move on to mr. Goldbergs presentation . Great, with that, mr. Goldberg, please. Just to the public, well take comment at the end of the presentation. Thank you, chair. Good afternoon. Im the manager of programming and grants in the budget Financial Planning and analysis. Budget process keenly aware of covid impacts. Today we represent the other side of the fiscal coin, analysis engaging impact to date on the capital revenue. I want to acknowledge and thank the programming and grants team whose work is the basis for much of this presentation. As youre aware, covid19 has created unprecedented impact on funding for the sfmtas twoyear Capital Project and fiveyear improvement program. Projects across the breadth of the Agency Business lines are likely to be impacted. The scale of the impact depends on the depth and length of the covid impact to the economy as a whole. Six months into the pandemic, determining the risk factor is still more of an art than a science. One early but clear conclusion, all anticipated revenues are in decline, except for federal funds which we anticipate to be flat. More on this in a moment. For the twoyear Capital Budget, 1. 1 billion, were anticipating revenue losses because thinks the peak of the pandemic, or the trough of the pandemic, of up to 295 million. For the remaining three years of the Capital Improvement program, we will we could experience between 418 additional revenue losses of another 260 million. Looking across our fiveyear Capital Improvement program as the board saw back in april, we could have potential revenue losses mounting up to 55 million. 555 million. The impact of covid19 on capital revenue is not as immediate as it is with operating funds. Last spring when parking collections were suspended, the impact was immediate. Capital funds, funds created before covid, are considered safe even if they have yet to hit our books as awarded grants. Future funds are much more volatile. Each with their own down turns and rebounds. For the federal funds we pegged them at fiscal year 2020 levels, though they could change based on election. After election, congress will take on the renewal of the current fiveyear transportation bill which is set to expire at the end of the month. And while there may be a post election stimulus bill, regardless of who wins or loses, our forecastses are not relying on one. Ill take you on a brief tour of the capital revenues as they decline and then recover. For all the funds shown, along with april 2020 board reviewed baseline which is the current column, our forecast include pessimistic, medium and optimistic snares scenarios. While we could issue revenue bonds, were only looking at general Obligation Bonds at this point. We dont really consider much in the way of pessimistic or optimistic, just perhaps the decline of up to 4 . And that is based on the citys strong credit worthiness. The next funds are california cap and trade funds. Theyre generated by the sale of pollution credits. The sale of credits was off 96 from the sale just before it, at 25 million. However, august sales of capandtrade funds came in at 774 million which is considerably higher, still below normal, but the fact there is 474 million could be indicator there is return to economic normalcy. For the sfmta, these funds are associated with transportation investments linked to affordable housing, transit expansion and fair subsidies. Moving on to developer fees. These are likely to be lower, both because the National Economy and the downturn and the softening Real Estate Market in the city. Were actually more conservative with developer fees in years three to five of the c. I. P. Which will be on the next slide because of the turnaround were anticipating from other Revenue Sources. Fema and federal Highway Administration are small players in our overall funding programs. The fema grants are used to pay for increased Police Presence on transit and emergency training. We dont understand f. H. W. A. As a granter, because their funds come through other programs. The federal Transit Administration is a major player for us and most of the funds received are state of good repair funds that are programmed by the metropolitan transportation commission. Notably, most of these repair funds go to fleet and guyedways, but guideways, but not necessarily facilities and other state of good repair investments. For those, we have to turn to the operating fund and general fund, which are funds that could be used for transit, operating purposes and some are set aside for capital purposes as well. The other category is competitive grants and unique sources, which is oneoffs or the active Transportation Program or other funds that are just a little bit harder to categorize, but in general, pretty volatile as well. One source that deserves a little more explanation is the Sales Tax Program. For us, thats the transportation sales tax managed by our partners at the San Francisco Transportation Authority. The t. A. S we call them. Theyve released projections of 93 million for f. Y. 21. That 93 million is only a little bit below what the Sales Tax Program generated in fiscal year, 15, 16, 17, and 18. F. Y. 20 revenues took a big hit because of the pandemic and are a far cry away from achieving the 160 million that came to us or came to the city in fiscal year 19. Anecdotally, were starting to com pile evidence of sales tax generation across the state. Another agency im familiar with in the Central Valley is seeing sales tax receipts not taking a deep dive, which is a bit of a surprise to everybody. The s. B. 1 funds are mostly for state of good repair. As jonathan mentioned, state Funding Sources are erratic and all over the map at this time. Hopefully, well get better information over the next few months for these and almost all of the other Funding Sources. The t. And c fees are fees collected on uber and lyft. These struggle with services across San Francisco early in the pandemic. We were 94 below revenue. But those funds are expected to rebound a little bit for the rest of the calendar year. The last Funding Source is the vehicle registration fees. Those are probably the most stable Funding Source we have that were identifying, because unless vehicle ownership applies, registration fees are going to be flat. Im not going to dive into all the Revenue Sources here, but i did want to point out in our fiveyear look ahead, across the Capital Improvement program, except for developer fees and operating funds, we really starting to get a rebound. The middle of road scenarios for reviefd Funding Sources, developer fees are likely to stay well, but sales tax proceeds will improve. Where were showing 90 decline and perhaps it might be higher at 11 , but at this point, its hard to determine. In short, all of our Funding Sources except for developer fees and operating funds are going to start to rebound. The model work weve created would allow us to determine how deep the declines will be for each Revenue Source individually and when theyll start to pivot out pivot up from bottom. This one is a little complicated. Let me walk you through a bottom line. Were look at three different scenarios on this slide. This is how the revenue declines are hitting every single major Capital Program within our c. I. P. The bar chart that id like you to take a look at is for each of the six charts which includes pest mistick, medium and optimistic scenarios, the black bar to the right of each shows our percentage decline in capital revenues. For the twoyear Capital Budget, our large decline on the pessimistic scenario is 26 . But if you shift to the right, its 22 . There is a lot of moving parts in this, but were just starting to assign to each of our Capital Programs and that leads me to what will our next steps be . We will refine revenue assumptions as the data becomes available and every six months for budgeting purposes throughout the recovery. Well be assessing the ability of our small capital reserves to offset capital revenue losses across the board. And then well also be assessing with the Budget Office and Capital Program manager, the liquidity of funding commitments to project. In other words, if a project is under way or under contract or even about to be bid out, its much harder to disentangle the Capital Funds from those projects and may not make business sense, however, projects that havent begun may need to be reprioritized if some of these scenarios play out the way were anticipating. Between now and november well be updating our Capital Improvement program with these adjusted programs. Within each Capital Program well be reprioritizing projects for any remaining funds. We may be forced to defer projects from 90 funding isnt available for any particular phase. If thats the case, then those partially funded phases would have to drop out of the c. I. P. For now. With that, im happy to answer questions. Thank you for your time. Thank you. Directors . Are there any questions for mr. Goldberg before we open it up to the public . Thank you so much for all the detail. Curious, stepping back a minute, why you chose to agendize this item now . And i dont see in the next steps here necessarily, sort of larger conversation about how to backfill some of the gaps, especially that ongoing state of good repair 600 million figure that i think now is in all of our minds. I was wondering if that is part of the conversation you wanted to spark today looking at potential Revenue Sources, or if simply the next steps here around sort of refining assumptions and not starting projects unless significant amount of revenue is secured, what was staffs hope in this discussion . Thank you for the question, director eaken. Roberta is going to hurt me if i dont introduce myself. Senior budget manager. So you actually read between the lines perfectly. So, one, in our discussions about revenues for the agency, we need to talk about the existing state of good repair and infrastructure and assets we own. And so that is an annual price tag. If we want to keep the system in state of good repair at 600 million per year. The second item with regard to revenues on Capital Projects, the board had gone through a significant amount of work to balance the operating budget. As you know, we brought back a revised budget on june 30 where you approved the but did reduce revenues and made adjustments to expenditures and programs within the agency for the next two years. We have not done so on the capital side. So the Capital Budget you approved on april 21 is still the same one. The five year cip is still the same. The reason for that, the impact to capital revenues often lag what we know about the operating resources for 68 months. Were still waiting to see what the federal government might do. But we do have to consider the agencys commitment to some of these large projects and programs. So we did want to give you headsup we do anticipate in the falling, once we get a sense of where the sales tax is going, which again is lag, were getting sense from the Transportation Authority where its going, what commitments we can follow through on. I will say that the agency has an extremely high level of projects right now in construction. So we have the l. R. V. 4 procurement. Thats a billion dollar project were committed through projects. Were paying for that. We have the taraval project. Were in active construction. 16th street, 22 fillmore, muni project, were heading toward the financial commitment. We need to follow through on those contracts and those commitments. And when we start seeing cash flow decline, were going to have to make choices. Well be transparent with the board about that, but we wanted to give you headsup, that the work you did on the operating budget from april to june, youre going to go through a similar exercise on the capital side in the september, october and november period. So we want to be transparent with the public about what the cost of state of good repair is. Keep the system as it is, nothing new, just as it is today, where we are with the enhancements and the expansion to the system as reflected in the Capital Program. And what we can and cannot afford. And i think weve made clear through the process what the operating structural deficit of the agency is. So what were trying to do and thank you to the board for asking the important questions you did but we need to clearly inform the public on what it costs to run the Transportation System both in operating the services that we have, in delivering a state of good repair and functional system for the public and fort additional things that people want. You know, those projects they want. The enhancements they want. The new subway tunnels they want. We need to be clear on what the needs are so we can start having a fulsome conversation about how to pay for them. I dont know go ahead. If i may as well. So the other thing that were going to be talking about regularly over the next 22 months, in terms of next steps, is how to fill these holes. Obviously, there is a relationship between the Capital Budget and the operating budget. And there is also the need for Strategic Thinking about how do we go to find new Revenue Sources both in the capital and the operating side knowing that our first chance to do that is 22 months from now in november in june of 2022 . So we need to make sure that our strategic approach for solving the capital problem relates strongly to the solving of the operation budget problem. This is a theme youll be hearing about probably every meeting for the next 22 months. I have a question. I didnt realize how significant we rely on developer fees. I know a few years back we had a fee deferral program. Has that been exhausted . Yeah, so part of the as you recall, we did have a certainly amount of development impact, a little more than were comfortable with, so the operating budget and the operating costs. There were two factors at hand. One it was there was a period of time during the last recession where there was a fee referral where people deferral where they paid the fee at occupancy, not at coming in for a permit. We had years building up that we committed to Capital Projects. The number that Joel Goldberg showed you, 100 million of that is for park mirr said. That was a large project and financial commitment to infrastructure. Thats a good 40 of the total. The rest is reflected in the sustainability fee. We get 1020 million in any fiscal year. That means that they must move forward for us to realize the fees . Which makes development, when you tie the need for infrastructure or even enhancement strictly on the development, and that development doesnt come to be, you know, we have consider, do you just move forward with the state of good repair or do you wait . This city has made choices about waiting in the past, hoping that some other source or development would help pay for it. Thank you for the clarification. Very important to realize. Directors, any other questions before i open it up to the public for Public Comment. Well open up to Public Comment now. Moderator, can you open the lines. You have zero questions remaining. Chair borden always interesting. The substantive stuff, nobody calls in about. [laughter] this is the most important thing about us delivering service and we dont have any callers . Moderator . You have one question remaining. Chair borden at least one person cares. Speaker . Youre on the line. Speaker on the line. Can you hear me now . Should have known that you would at least care. Well, im juggling a bunch of things, but in response to your concern that no one cares, i wanted to assure you i care and im paying attention to a lot of things, including state of good repair. I apologize ive not had a chance to review the report or presentation, but i shall. And i appreciate that staff is concerned about state of good repair and assessing the Capital Assets and the replacement life and determining how much we should invest and hopefully were developing projects and investing so were not deteriorating our asset value over time at the same time as were enhancing and expanding the system. So i very much support state of good repair and want to assure you of that, despite all the other things going on in the world. Thank you to staff. There you go. Somebody cares. Youre welcome. Chair borden thank you. Any additional callers . You have zero questions remaining. Chair borden i didnt mean to indicate there was any specific persons responsibility for caring about the issues, but these issues determine how were able to deliver service. If we dont have a state of good repair, then we have issues and break douns in our system which well be talking about in the next item. But for the public, i think, if you really want muni to be successful and operate this level of service that you want with the efficacy that you want, we really have to have a strong Funding Source so that we dont have a 3. 2 billion backlog with a 600 million need per year that we cannot fund, that we only do a third of. Anyway, thats what i will say on that item. Vice chair eaken i think director heminger was ahead of me. Director heminger well, you seem to be, madame chair, issuing a cry for help, so i felt obligated [laughter] to comment, at least a little bit. And i think you put your finger on an important truth. Were talking today about the thing that no one wants to talk about. And it seems to me in our profession we put all of our creative thinking into building the new stuff, right . We just built a shiny new Transit Center and we did so in part with hundreds and hundreds of millions of dollars of developer fee income. What if that money had been invested in state of good repair instead of being used to build that system and then build the shiny new train that will eventually some day come there . We all try to be grown up, have our cake and eat it, too, and we got to be able to do both of these tasks. But there is no question, when push comes to shove. Who gets shoved. So i think we need to devote a lot more attention to this subject, especially to the question i mean these guys have an Asset Management program to beat the band, so weve ghot down to the last decimal point, but i dont think weve got any strategy at all about how to start biting this off and narrowing it down. So i look forward to that conversation and i hope we ill devote we will devote as much as our brain power to taking care of what weve already built as we do to building the next shiny new object. Chair borden thank you for that, director heminger. Vice chair eaken thank you. This builds off of comments from director brinkman and lai prior. It may be an impossible question, but i have to raise it, which is sort of like, it feels even the last six months weve gone through some very fundamental changes to our system. Director tumlin has said repeatedly, we redesigned the entire Transit System overnight to focus on where the greatest need is. Im feeling the absence of certain lines. In my life, its impacting me directly. But im understanding why certain decisions were made. Some people leaving cities. There are all kinds of wildly complex implications of the current covid crisis. What i wonder as we have the state of good repair conversations, does any of that larger context feed into our estimation of what the state of good repair numbers look like . Is it five years, and we forecast that the next five years . Or might the rate at what were using certain vehicles increase or decrease depending on the whole redesign of the Transit System . And the disinclination from the staff presentation of certain people to ride transit in the future and shift to other modes . What do all of those things have to say about the these numbers . And the most recent presentation about the different scenarios, the revenues, different assumptions, im wondering if we could look as different cost scenarios with different assumptions to make sure were getting it right and were just processing this information. Chair borden i dont know if staff wants to comment. It sounds what shes asking, with some of redesigns and some of the lines going away, would that change the way we project these numbers . So i can take a stab that the and then staff can look at the details. Ive been trying to Pay Attention to the way the world is changing in terms of everything that were doing in our medium and Long Range Planning and how were spending our money. One of the things i realized is that to director hemingers comments about big shiny new objects. Some of the big Capital Projects were still finishing up. Decisions were made about those projects two decades ago. Whether its the subway or van ness, those decisions were made a long time ago. The projects were working on now are really all about using our capital money in order to save on the operating side. So, taraval, judith street, all of the muniforward projects are about getting the physical infrastructure in a state of good repair and then setting us up to manage that infrastructure in order to minimize delay to muni which then maximizes the efficiency and utilization of our operating budget. So i went and looked at our capital plan to say, all right, where is the fat in this capital plan that we can cut out . Where are the shiny objects that are pretty, but not terribly functional . I realized that my immediate predecessors, who were very conservative and outcomefocused and had put forward projects that were all about leveraging our generally better available Capital Resources in order to save on the generally more constrained operating budget, these are Good Investments that make us more efficient. I was hoping for fat and waste that we could cut out. But its not there. When we have to go slash our Capital Budget, were going to be slashing projects that benefit essential workers the most, that benefit transit riders the most and our most vulnerable populations and make our services more efficient. Its going to be grim cutting this Capital Budget when its time to do so. And that said, i think, you know, what youve been presented here today is basically, its a limited number of scenarios. At the same time, we know that everything that were going to be doing for the next three years is going to be all about Scenario Development and continual adjustment. Just as we are having to make month by month adjustments to the operating budget looking at our actual revenues and expenditures, were going to need to do the same thing on the capital side. I think the staff has done great job putting together some reasonable scenarios. Who knows what is coming next . Its one of the reasons im glad youre insisting upon monthly updates to where we stand with our finances, because were going to need all of you to help us make some very painful decisions in the coming 22 months about how to get through this period, both on the capital and operating side. Chair borden thank you. Director lai yes, thank you. I think just a followup request for future presentations as we go into the revenueside of the conversation and look at real cuts. And i think that the public understands this. The deferring maintenance or not, 630 million repair cost, is basically potentially exacerbating certain repairs until the future and potentially growing that amount. And, again, this is like a continuum of 20 years. This is not just a onetime fix, right . So i think for me and probably for the public in the future when we have to make those tough decisions around which projects to really address right now versus ones were deferring, it would be helpful to get a Financial Sense of, you know, which projects would actually grow the debt in the future, to defer that maintenance. Im probably not phrasing it very clearly, but i think what i want to know is what is the opportunity cost in deferring certain types of projects over others . Thank you. And that is included in the capital plan. As you all know, the federal stimulus money, the cares act fund runs out in december. Starting in january, were going to be partly paying our rent from our savings account as we start burning our reserves. On the capital side, the situation is even worse. Deferring maintenance in the presence significantly adds costs in the future with compounded interest. So deferring maintenance is like paying your rent on your credit cards. And were going to have to do both in order to get through the next two years without layoffs. And its my commitment to all of you to do a full accounting of that. So that we know exactly how much the bill is going to be coming due with interest once were actually able to adequately fund capital maintenance again. Okay. Any additional comments from directors . With that, i think well close this item. Thank you so much. We look forward to seeing a deeper dive on the issues and getting further projections as we have more clarity around the numbers. I think our next item will help us think a bit about how we want to spend our money. So with that, ill close the item. Youre muted, secretary boomer. Im not sure why. I can see that your microphone is muted. Not sure why. Still not unmuted. I can see that it is muted for some reason. Am i able to unmute her . I dont know. Who has control over this meeting that can unmute her . You do [laughter]. I know there is a delay. I know when you click something, it takes a minute. Youre still not audible. The city attorney, are we able to am i able to call in the item, or does it have to be called in by the secretary . Yes. You can certainly call the next item and well look to get secretary boomer back up soon. In the meantime, because it is a microsoft product, im quitting and relaunching the application sometimes works. Wonderful. So, secretary boomer, one more time see if you can speak before i call the item in. So she cant. All right. Item number 12, presentation and discussion regarding the Transit Service and rail system repair. There are no explanatory documents, but well have ms. Kirchbaum. Good afternoon. Thank you for having us and taking time on this important topic. Chair borden do you have a presentation . We do. I just shared my screen. Can you confirm that you can see it . Chair borden i can see it. Great. Excellent. Although we only operated for three days, we did learn a tremendous amount from the rail startup. That the biggest change that we were introducing to the system were transfer points at west portal and at church station. And while i was generally happy with how the transfers turned out, we will be making modifications, including trying to enhance the signage, particularly at decision points where someone has to decide, do i go to the lboarding area or the kboarding area. Having cantonese speaking ambassador was critical and something we addressed immediately within the first early a. M. Two hours of opening. As well as looking for opportunities to enhance the operation. The work we had done to prepare for the rail opening really paid off. The station sparkled and i was so honored to see hundreds of staff from across the agency, many of whom have been working exclusively from home, come out and work with our customers and help make the transition smoother. That being said, on monday night, we had to make the difficult but i strongly feel necessary decision to shift back to buses. Every time we make a decision of this scale, were considering the risk management. And in this case, both the known facts as well as some of the unknowns led to this change. For example, we didnt immediately know how many people we were going to have to quarantine at the Transportation Management center. We didnt know if fear would keep other staff at home in the subsequent days. Making the decision in advance when we still had those uncertainties, even as late as monday evening, allowed us to deliver Effective Service the next day. And while we had some small hiccups like the customer information, we were able to get people to their destinations throughout last week. And im incredibly grateful to the operation, the maintenance and the communications staff, all of whom really changed on a dime in order to make last week work for customers making essential connections. The issue happened because on the same day we experienced two interrelated problems. We experienced the second splice failure in two days in a threeday period and we had a staff member contract covid19 in our Transportation Management center that did subsequently require us to quarantine a high number of additional staff. Im going to cover a little bit about what we what we experienced at the Transportation Management center and the next steps were taking to fortify our work. And then im going to turn it over to the Deputy Director of maintenance who will take you through the overhead line issues. The Transportation Management center operates 24 hours day, 7 days a week. And they have continued to operate without interruption 247 since the beginning of the covid19 pandemic. And last week was no exception. The managing buses and rail require highly Skilled Staff and the t. M. C. , as you know, is the nerve center of our system. And among many complex functions, their highest and most important function is to ensure the safe implementation of our service. Within the t. M. C. , the rail controller position is the most specialized. And it is the most vulnerable to small changes in staffing levels. In part because we barely have enough staff on a daytoday basis to deliver the service that we need to. And although we have new staff that are queued up and ready to help support, their onthejob training hasnt been possible while the rail system is closed. Additionally, rail controllers do have a high washout rate. It is very antiquated and hard to use 1980 software. So in addition to all of the complexities of managing trains safely, you also need to be able to memorize and input hundreds of dosbased codes and sequences. So its just one more example of why this old train control system is making our service vulnerable. We are taking immediate steps to shore up the Transportation Management center. We are looking for opportunities to widen our spacing, even further and perhaps even looking into some of our control center work out of the old location. We made a very conscious decision not to dismantle the old control center so that we had this level of emergency redundancy. It doesnt have all the bells and whistles. It doesnt have the same amenities and technology that we have in the current location, but it is a viable second location. Were also really forcing ourselves to do more computerbased work, to communicate via messaging and from our consoles rather than getting up and checking in with people, which is the nature of how our Transportation Center has traditionally operated. [please stand by] we had the first of two incidents on friday near the castro station and then we had. Based on the brake pattern, it appears to be the same issue that we had initially in april of 2019. I know were all going to be splice experts at the end of this and i appreciate the board taking the time to really understand these issues and im going to hand it over to charles drane, our deputy of maintenance, the key details. Thank you, julie and good afternoon, board of directors. Just to start with the basics, what is a slice . A slice is how we connect two pieces of overhead wire together. The splices are customized to our specification and require a highly specialized manufacturing. There are not a lot of companies in the business of making this type of product. If you look at the slide and the picture, you see three bronze casts splicing, splicers that we use in the overhead and these are capable for use with lightrail, trolley bus and streetcar. These are phoenix mining splices. These are new splices that you see, but these are the slices that have been fracturing and breaking on us. I would like t walk through the timeline of the slices were aware of. April of 2019 was the first thank you. Were seeing a word document were not supposed to be seen. Effectively, the first known slice that we are aware of was in april of 2019 and the photo there shows the broken slice from that event and that was what remained in the overhead. The other half of this slice became entangled into a twocar and that train continued for another thousand feet into the civic center station in the outbreak direction. This resulted in a pretty catastrophic outage of service, takings 13 hours to recover and very difficult before referring the wire, replacing the splice. May 15th of this year was the second known slice to break in our subway. The last two in the subway, going back a week, nine days ago, 72 hours apart from the slice breaking in august o 21 ad 23, putting us in a situation where we closed our subway. We have other ones, two other slices breaks that were from the surface and wanted to share what we know about the broken slices. So just to be open about and trying to understand how this can occur. Next slide, please. What weve done, from the initial splicing failure in april, our team formed an overhead working group and we gathered individuals from engining, a real maintenance team, our overheadlines team and this group worked to go through specifications, to reach out to manufacturers, those who we havent used, those were currently using to try to determine what they understood, what we can do about the situation and the splice pieces that we recovered were sent into a metalurgy lab tor testing an d analysis and results have come back and the casting did not meet specifications. The splice is supposed to be stronger than the wire. When it experiences tension, it gives away to tension, not the splice. It did not meet specification and we sent two failed splices with the same results. We also had additional splicing, brand new that were sent a series of seven different splices. These were tested, unused, right out of the box from a variety of inventories and in our shop and they met with mixed results. Some failed our specification and some met them. So we have a lot of uncertainty around the quality of the splices that we are receiving from phoenix mining at this point. And we continue to work with phoenix mining. Weve also engaged arthur flurry, which is another manufacturer of overhead hardware which we use and we have worked with others. At this point, as we work through times, looking at, you know, resign specs, new options for splicing, we basically have arthur flurry and phoenix emerging as something we can work with. Last friday, we put in an emergency purchase order to buy 200 splices, which will be delivered on october 20th. And so, about eight weeks from receiving these parts. And next slide, please. Again, our metals lab has determined two initial splices submitted had failed due to low quality, low sil silicon levelsd seven random new splices by the same manufacturer came back with a vert of results, some good and some bad. And this did not fail due to a state of good repair and this is a bronze casting and these fractures and results from our metals lab, these are things, these fisseurs, cracks are not detectable from the outside. Were not quite certain how many splices have this quality. When we went them to the metal metalury lab, were getting mixed results and we dont know exactly when the first batch came to us. Next slide. And we have already mapped all of the locations of splices in our subway and we have 154 splices, the phoenix mining splices in the subway right now and as ive said, weve ordered last friday, the new splices from arthur flurry at a cost of 30,000. By the end of the year, we expect that we will have the opportunity once received to replace all of the splices. Were going to do a couple of things. Well replace splices directly, but we are also using our splice map and well be looking at the high concentration of splices and well be able to run longer lengths of wire and hopefully eliminating longer amounts as we go through. Just one thing to note, in the photo below is the new arthur flurry splice. We worked with him for six months to really have our engineers review this. The photo there is a tension test. We submitted samples of our own contact wire we use in a subway and they did several different tests. One of the potential tests actually pulled the wire apart while the splice remained intact. And that is a very different splice than we showed you on the earlier slide. One thing that needs to be known is that this slice is useful for panographs. We can only use it where were not running trolley Coach Service but Streetcar Service on the surface. So again, well have to go back and do work and research. Were working with arthur flurry on a prototype to come up with a narrower body splice that will also be workable and useable with trolley coach and streetcar use. We expect that prototype to be available for review and inspection and metal testing by the end of september. And construction support and some of the other work that red arlines teams will have to do will have to be reduced. We will have to maximize our time in the tunnel to replace the 154 splices. Again, these numbers would have been so much bigger and i really thank the board in this case, because we were given an opportunity in september of 2019 and again in february of 2020 with the, basically, the early maintenance shutdown. We were able to pull over five thousand feet of wire, remove 45 splices that were previously in our tunnel and so that was a part of getting extended hours of maintenance shutdown. That was approved by the board and thank you for that one. Again, we have a lot of work to do and we estimate, again, two to three hours and were working with our crews, you know, have been following all of the restrictions. Weve been through this learning to do this over the four and a half months. And again line work requires close proximity in confined space and we have to minimize our time. The line crews have been already working with our doc, with our department of Public Health, following osha guidelines on additional ppe that we will wear and then being cognizant of the time they spend less than six feet of distance from each other. But weve estimated two to three hours to splice and it will take us a bit of time to get through in. Next slide, please. Next steps for the team, and so, again, weve talked about replacing splices. When we touch the wire, you know, with each of these splices and in some cases, we will find concentration and pull longer extensions beyond the concentrations of splices and help or sales with wire and in other cases, it would be a direct replacement to the new precured splice and we will be inspecting the viewing, adjusting, renewing, if needed, all of the different hardware and alignment issues that are occurring on the feeder sections and the behavior hea the overhef wire and we have a couple of different areas to address we currently have first ghostlow zone related to overhead wire in our subway and well be focused specifically on those areas, to kind of take time and readdress the wiring and the hardware, renew components, if needed. The photo is actually showing one of our slow zones which were using and this is a section break between two feeder sections of overhead wires and this is an arthur flurry component and it works really well. But its had challenges with adjustment and its hard to see from the photo, but as we approach the station, we have a really, really fine adjustments that need to be made and the proximity to the ceiling tunnel makes that challenging. Were receiving insulated hardware, small turn buckles for microadjustments and really have some ability to make that just smooth and perfect for p ar panographs and well be addressing that well during this period of maintenance. I guess another piece to share is that we are concerned with phoenix mining or any part that would fracture on us and that our operating procedures, that our Maintenance Plans are not catching Something Like this. And we have been discussing and will be working through a plan to develop Quality Assurance plans and we have already been employing cameras that weve placed in specific areas. We do some testing. We do judgment adjustments and o recording and it gives us a birds cr eyeview. We have so much advantage when were on the surface, when we can kind of watch and see how things are performing and reacting to some of our changes, whether it be a new part or an adjustment of an existing part and so these cameras and taking this method is really helping us see whats going on in realtime or at least delayed version of realtime because we cant be in the tunnel when the trains are rippinrunning at design speed. Next slide, please. So what charles has said, that we intend to use this time much more ambitiously than just replacing splices. The overhead work will be approached from the angle of how do we address the underlying issues that produce the need to replace wire in the first place and well also be doing as much additional work as we can on the rail system. We immediately assembled a task force of staff from multiple disciplines to try to queue up as much work as we can, whether that be on our train signals, on our track, in addition to the overhead work, which will make our system more reliable for customers when we do return to rail. Were also working on what i hope is a fun project and that will be more customer facing, which is to try to put wifi in as much of our tunnel as possible. Were doing it with inhouse expertise. We did not have a big project queued up to do this work, but theyve been looking at it and like with so many other things, when we look for opportunities to be nimble and creative, we think we may have an opportunity with wifi to do something similar. And so, you will be seeing an additional focus on state of good repair investments. It builds on what weve been doing all summer and so, as charles indicated, a lot of the maintenance does require close contact and we did need to wait until this summer to start the work. This spring, based on the Public Health guidance that we had, most of our work was focused on caretaking of the system, one or two what we had typically done in much larger groups and doing no closecontact work. And starting this summer, we were able to kick into high gear and get a tremendous amount of work done in the subway. There was a crossover, which was a tremendous undertaking to get activated and we also replaced key sections of track that had deteriorated and needed to be replaced. In the middle top photo, you can see staff working on the m line at eucalyptus and in the top right corner, theyre working on one of our most critical locations which is the debos export balancedebosse portal re. It all needed to be brought back up to operating conditions and this required trimming trees, replacing prone switches an replacing broken switches because we did not have close contact and so i think the message that we want to deliver to this board and to our customers is that while we realize its tremendously inconvenient to not have the trains operating right now, we are using this tremendous opportunity to fortify the system and to get as much work done as possible. And so, in terms of next steps, that is what will guide us, solving the immediate overheadlines problem with the defective part, as well as getting as much other work done as possible. We will also, through our departments operation center, be shoring ourselves up and looking for areas where we have vulnerabilities and other small teams and we will be continuing to study the data and the Customer Feedback on our bus system to make sure that we are responding to change in customer trends, minimizing crowding, adding connectivity when we can. And with that, both charles and i are available for any questions that you have. Thank you for that presentation. Directors, do you have any questions . Director hemming er, you have a question or comment for staff . Yes, i have quite a few. So i do kno dont know if you o proceed with Public Comment. The reason i like our questions before Public Comment, sometimes we ask questions that the public might want to comment on and we can get clarifying thoughts and they have the best ability to comment on the overall thinking. So go ahead. Well, ill proceed, then. And let me start by saying, i do commiserate. I had problem with bolts on a bridge and i feel your pain. Let me start with the question of Quality Control and Quality Assurance. The slide you showed indicated that were going to put in place a Quality Assurance effort. Does that mean we dont do Quality Assurance when we receive these splices . We depend on our manufacturers to deliver, you know, as specified. And so, at our shop level, at a maintenance level, were not doing any additional sophisticated testing, like sending things out to a lab. Right. Well, look, i think youre probably acknowledging that that is a mistake and i would certainly concur. And its often the cheap part that kills you. This part is not all that expensive, but it basically brought all of our plans to not. Now what about the suppliers Quality Control . There was something missed there, as well. So do you have have you conducted any kind of investigation of what went wrong there . We do have an ongoing investigation. We are in communication with phoenix mining. One of the reasons we went and pursued others is because they werent responsive when we approached them in april of last year. And weve kept dialogue and we want to understand, were still trying to understand this problem ourselves and work with them. But arthur flurry has come back and has provided lots of engineering support, agreeing to take a lot of our equipment and do tests for us and they sent representatives out here and they use a completely different process and we feel very, very comfortable. Their warranty theyre offering is a fiveyear option versus the one year that we had from phoenix mining, which, really, this is not an expensive part or not about the warranty but the impact to the service and the catastrophe failure of the part really caused huge costs to the agency. We still feel comfortable with them. Again, well have to keep working with the phoenix mining. We have their splices in our system and using them over ten years. And some of their splices most of the splices are misunderstandinfunctioning propd to know whats happened with the quality of the castings. And so, we have to keep digging into this and we dont have answers. And so the metalurgical resulted you depicted, are those from the failure in 2019 or from the failures that just happened . So we do not have results from the failures that just happened. We are awaiting on results from the failures that did just happen and those are older failures we have results from. But the brake pattern matched almost exactly. Its right at that second bolt where were seeing what, again, should be the strongest piece of infrastructure break in half. Right, the crosssectional area where that bolt penetrates the splice, its the least amount of crosssectional area. All six of the splicing failures that we have recovered, they have all man teste manifested ie way. Yeah, but doesnt it puzzle you that how many of these splices do we have in the subway system . Right now weve counted them and there are 154. Wow and does it surprise you that i mean, yothat you had a catastc failure on a couple and not more . This is why were trying to understand exactly where we receive this batch of parts, fit is one batch, if it was a different foundry, because its a different source of metal. Were tracking maintenance records now to understand when we did the wire pools. And we believe most of the wire pooling we did in the subway, you know, we pooled over a mile of wire, 5500 feet or so. And that some of the splices used there are some of the splices in the most recent batch and this is what were trying to confirm because we would like to be able to go back during the maintenance records and really understand why these splices are and get rid of them. One of the things were doing, we reach out to a consultant to see if its possible to use some ultrasonic testing thats portable. Something like overhead components, its not so common. And we also have right now a gap where we dont have support for splicing on systems for trolley coach and streetcar. We have a gap in panograph systems for eight weeks. So were taking a small batch of the new mining and have them do nondestructive testing. Youve got 150 in the system and youve ordered two new one his. Yes. Is your plan to replace every one of them . Yes, so through a variety, weve mapped our subway and we know where we have concentrations of splices and we will try to if we have wire to go around eight, ten splices, well do that and in some cases, it may not be as easy to complete. We will replace the splices one for one. If we have 154 splices, perhaps we can replace 70, 80, 90 in whole and installing a mile, mile and a half of wire in doing so. Our wire is the fewer splices that we have because splices are put in when we have to fix small problems in the overhead wire, over a shorter period of time. And that is something that ultimately we would like to get to a program where we only have a splice in place for a short period of time. Lets say its three weeks, four weeks, six weeks and that were committed to using extended maintenance windows to run wire from feeder point to feeder point. Right now, were using the bandaid as the permanent fix and we started reversing that with the extended maintenance windows, pulling out already 45 splices to date and we will approach this same work, this work with that same lense. How can we eliminate rather than replace splices in many locations . Yeah, julie. You sort of answered my next question. That were sort of it sounds like were oversplicing and as you called it, thats the bandaid and not the solution. I cant speak to whether or not were oversplicing. I think thats one of the reasons on my last slide and i didnt emphasize it, that we are going to be reaching out both nationally and internationally, to make sure that charles has a peer that he can call up in leone or seattle and all over the world. The same is true with our track and signal system. We have a tremendous talent pool at this agency, but we are often relying on knowledge handed down from generation to generation of maintenance staff and we want to try to learn as much as we can from other systems so that we can answer just the same question you just posed. Is 154 splices a lot for is it eight miles of subway . Between ten and 11, yes. Thats an open question we need to determine. So the 200 we ordered, which did we order them from . Arthur flurry. So youre shifting suppliers . Yes, we are. And then what about the warranty question . I think you indicated the warranty we had from phoenix was much shorter. So are all of the breakages out of warranty . Yes, they are. Can i ask one question quickly related to splices . Sure. Have we isolated whether or not theres any commonality where the splices broke, like an angle which it turned, a speed . Because it also says to me that potentially, the reason were splicing certain areas could be other conditions, right . And so, not that the splicing isnt the problem, but my point is, there might be a larger problem about something environmental at those places that caused the original break and that lead to a splice which then also broke. Are we able to kind of look at that . Right. So we shared earlier the six known splicing failures and theyre not in the same location. We have some that on the surface, theyre trolley coaches, two of them. And were not seeing i mean, you know no angel angles or speeds. In the tunnel, its as high as we get. On the surface, were operating slower. And again, theres a panograph in some cases and in some cases, a trolley bus thats a trolley shoe and kind of wraps around. So its even contacting differently and traveling at a different speed and they are breaking, as julie mentioned earlier, at the same point we have minimal amount of Cross Section and thats right warrant thwherethe bulk in the middle oe splice, they all fracture at the same point. And if you remember, you know, when you splice the contact wire into the slice, thats a cast device. Its not forged. And so, it has to cool after seeing the alloys and mix. If its done improperly or the content is wrong, theres impurities inside or fisseurs, it may not be detectable on the outside. But, again, looking at the hardware. The square bolts, we also tighten them down and they actually put basically, theyre damaging the contact wire and the new splice is two halves. Its a clamp with equal pressure if you look julie, do you have a picture . Yes. And it puts equal pressure across the groove. It doesnt crush or pinch and it doesnt and its made of a forged material. So does that mean we maybe didnt get the right splice for our need . Not that necessarily the splice is faulty. Well, weve been using that splice successfully. That splice is in our system and it works fine. If we go back two years ago, we never had a problem like this and we had been using the splice for a long time for all of our needs and we simply looking at the metals report, basically, its sending a signal that the quality of the material that we have now is sub standard. Standard. Once you gets the splices, who installs them . We expect it will be the overheadlines employees. So our own folks . Our own folks, yes, sir. Have they been installing them up to now. They have been. And is there any indication that there might have been an improper installation, tighten the bolts too much . God knows what. That is something that weve gone over and its part of our research and with receiving the new arthur flurry splice, one of the things that helps us feel about the report. I showed a section break and i sent a team out to work with us on how to reset this section break on the different tools that theyre specialized for doing so and we have some of the tools and weve now acquired additional tools. So the training guidelines, the actual handson expertise and then we have asked for training and installing the new splice and all of the digit need diffes for putting this in. Well be addressing this training with the new splice. So in changin changing suppl, youre changin changing trainer. But steve, i do want to clarify that we always want to make sure that were providing as much training and oversight of our staff as possible, but the issue here is documented weakness and the metal content of the splice. Well, but, it seems to me that the evidence you have is that that may have occurred but that doesnt necessarily rule out other contributing factors. I mean, when something fails, theres more than one cause. And i think we want to be as exhaustive as we can to rule out any contributing causes. And the third area of my questions have to do with i guess ill call this service testing. Its the issue that we hadnt run service for several months and were getting ready to run new service and i know we had been doing testing and i believe this is just from press reports that im picking this up. But we didnt do what i would call a fully loaded test of running all of the system and i believe the reason we didnt do that is we had the buses still out there and the train cant be where the buses are. If ive got that wrong, let me pause on that. Is that the reason that we didnt do, like, a fully loaded fullon test of the system before we turned it back on . No. We did do some testing, but i think we should have done more, including what youre describing. And i think that if messaged properly, the public would understand that theyre seeing trains out there and cant get on them yet because were making sure when they do need to get on, they work the way that they should. And so i dont think that running bus service would preclude us from more robustly testing rail service. The feeder is essentially at point at which power comes from the substation to a particular part of the overhead wire. As charles said, weve already done about ten of the subway, charles . Yes. During the last two extended maintenance windows and we want to do more between now and the end of the year. And because transit ridership is so low in the evening, because even the stuff thats open isnt open much passed 8 00 or 9 00 p. M. , really use that to treat the next six plus months, 12 months as an extended subway maintenance window. But what i really appreciate about charles and his team is that theyre being thoughtful to make sure that were fixing underlying problems first. And so it would be easy for him to just run wire from one stretch to the other and in some cases, we have wire up thats been up since 2008 and we havent had to touch it at all. There are other sections were doing repairs every six months and so we want to study and understand the engineering around that and it seems to be in particular where we have very limited height in the subway, like what we showed you at have vanesse, and make sure we get the design right before we make that big investment of wire. We do think its time to do a reset. Last question may be difficult to answer because based upon your answers up to now, there are some things youre thinking about in terms of what strategy you want to pursue. But do you have any ballpark for us when we might see trains again . Our ballpark right now is the end of the year, but we do have to work through a lot of open questions between now and then, including whether or not there are some areas to consider surface trains, even while the work in the subway commences. Well, look, obviously, this is a significant failure and weve got some amends to make and i think with a lot the stakeholders. Weve heard from some of them. And i know youre going to apply yourselves diligently to the issues that we have in front of us and i appreciate the candor of your answers today and the fact you said i dont know a few times, which is always a good answer to hear about Something Like this. Thank you for responding to the questions. Thank you, madam chair. Director brinkman. Thank you for the presentation and i agree with director hemminger that youre doing a good job managing going forward, admitting what you know and dont know and working to address all of these issues. I do support holding off on restarting rail until the end of the year, if it takes it, so we can fix the splice issues. And just two questions, really. The bus bridges or the bus replacements that were running right now, are we running the l and k bus or is the bus replacement mimmicking what the l will look like running into the k . Thank you for that question. We started out in the kind of initial days of last week fully replicating the bus system, but what we realized was that we had a lot heavier demand on the tline than the mline and needed to be able to run more frequency and that having that really long bus route, especially going on surface market street, it was a bit bit unwieldy. Its going into downtown right now and the n is also going from ocean beach to caltrain through downtown and the m line is reverting back to the Community Shuttle that was operating going from balboa park to west portal and the j line is also it is nearing what it was doing from rail, going from balboa mark to church and market. Its a bit of a combination, based on ridership patterns. Also designed to minimize the amount of total buses. Right now, we have enough operators to run our system. Fact, we have enougin fact, we h operators to grill our system, but we are light on buses, in part, because were pulling everything in and out of our bus yards so that operators are always going out with a clean bus and thats something that has been really important for covid safety, both actual safety, as well as our operators perception and managing some of the fear associated with operatorring and service right now. So we are essentially cleaning our buses completely every eight or nine hours, which is a higher standard than what most systems are doing, but part of why we have so successfully managed the virus. Thank you. Director brinkman, any additional questions . Thank you, and that did answer my second question about operator availability because you mentioned in the presentation that you had to hold off on rail training since there was no rail to train on. So thank you, that answers my questions. Dr. Eakin. Thank you. And julie, charles, appreciate you taking us on this learning journey with you through these detailed aspects of how the system works. I think the presentation is very clear the way that youre troubleshooting and problem solving. It all seems exactly right. I feel like were following you every step of the way is appreciate the way youve laid this out and feel fortunate to have you on the job. And i did want to reinforce something i heard, which just during this period of the shutdown, this bizarre period of use of the rail system, please just get everything we possibly need to get done, done, strongly thumbs up on that. We did so much promotion arrived the opening and we were so excited about coming back and that leads me to believe that we had no idea, obviously, that this was going to happen. Otherwise, why would we have made such a big deal out of august 22nd and this exciting move for the system. My question there is how can we get ahead of these things in the future . You know, it just feels were in this learnaswego mode and troubleshooting as we go. But it feels with the Institutional Knowledge you were speaking of, julie, and that peerto peer network im conflicting because i think youre doing an excellent job troubleshooting. I hope we dont continue to find ourselves in this sort of learn and go is trouble shoot as we go mode when the impact of that approach seems to be really disruptive for the public. So i wonder as you reflect on your all doing your best, trying to handle what is kind of thrown at you, is there anything that youve been able to reflect that could allow us to get ahead, thinking that, yo you know, we d this challenge in april of 2019. Should that have been a warning sign . Should we check all splices and theres not just one . I would love continuous reflections on how to get ahead of this in the future. I think charles touched on it a little bit and i think technology here can really offer a tremendous opportunity. On our track system, within the last five years, weve started doing whats called ultrasonic testing, which allows us to find microcracks in the track and then wait thosthen rate those cn severity. One is something to be replaced immediately and six is something that can wait much longer. Charles, did i flip that, one is the worst and six is the best . One is the worst. And so, i think that kind of opportunity is less common, but could exist for overheadlines. Our buses called new flyer connect and allows us to see maintenance trends and patterns we couldnt have seen before. I dont mean to imply that technology is the only thing to save us here. We also need to react differently to warning signs and not wait until problems escalate. But i do think that investing in our staffs ability to use and understand technology does offer some potential to head some of this off at the pass. And if i may, director eakin, you used the words continuous improvement, and thats exactly what were striving for at the agency. Continuous improvement in the Agency Requires a very different approach to problem identification and solving and a cultural change at the agency. And this agency is better than most, but there still is lingering culture of fear of being blamed that gets in the way of continuous improvement. And so one of the things that i have been doing, even though i offer very little in terms of technical expertise, in terms of solving these problems. What i can do is to establish a cultural framework that emphasizes continual curiosity, early identification of problems, identification more importantly of risk. So as you all know, we have dramatically accelerated the pace of change at the sfmta and to a certain degree, that has involved accelerating risk. So in order to mitigate the increased risk, what were trying to do is identify problems immediately, continually assess risk and collaborate across different disciplines to figure out what the best solution is and implement the solutions quickly. Staff did not emphasize this as much as they should have, that we made the decision to shut down the train system at 6 00 p. M. On monday actually made all the difference. Like, i think, the agencys historic tendency would have been to fret and to delay that really, really hard decision, but if we had waited even just a couple of hours, we would not have been able to deliver what was a shockingly good level of bus service the following day, like far beyond what i thought the agency was capable of. And similarly, if all of the different disciplines hadnt come together and got down on their hands and knees and got dirty is talked to each other openly, about the nam about thee problem, we would have probablily misdiagnosed it. The Risk Assessment that was done, i think if either of the two problems, the splices or quarantine situation, like staffs intinge wa instinct wase on. If we had just one of the two problems, we could have mitigated and continued going. But we stopped and did the Risk Assessment of, all right, whats the worst Case Scenario here . And the worst Case Scenario was wire coming down in the subway with a full train, somewhere between forest hill and castro and having to evacuate that train while our Transportation Management center was weakened as a result of, you know, three people being out on covid quarantine. And not being able to manage that catastrophe. The fact those two came together made it easy to decide that we need to shut the train system down right now. And gave us practise, i think, in how to be able to do this sort of continual improvement and continual change management in a faster, more sophisticated way in the future. We were to able in six hours notice, send out an army of ambassadors to help our passengers figure out how to manage with a completely changed system. And so, definitely not perfect. Hopefully this wont happen the next time, but next time, Something Big gets thrown at us, i think staff will know what to do. Thank you. Any additional questions, director eakin. Dr. Lye. Thank you. Theres a lot of very nuanced technical detail here and so im doing my best to follow it. I think that what i am taking a way from this assessment, this tough decision, to shut down completely for the next couple of months until the end of the year is partly due to the fact that we still have outstanding open investigation as to what is causing the splices to fail. It sounds like were still waiting for some reports. And can i pause there and let staff answer that first . We want to make sure we check the two most recent parts that we broke. We are proceeding as if it is the same issue, given how exactly the break pattern is matching the previous incidence. There are a number of unknowns still, which is why we are shifting to a new manufacturer and to remove as many of the splices as possible. As we work through the issues. They want to potentially reopen the rail earlier because, like, the baseline solution here really is to we do have to, basically, go back to the system to replace all of the splices. Arthur flurry offers a warranty five times what the competitor was, but they have said they are useful up to 30 years of use, which is, you know, longer than a replacement cycle for the overhead in the subway. And yeah, some of the splices are been in use and their equipment has been in use longer than that and weve been using not in splicing, but in other hardware. I dont know what they claim for lifetime of their splice use. Again, if it meets specifications, it should be stronger than the wire. All of the hardware that is there should be stronger than the wire. I actually feel fortunate that staff started investigating this issue and started the resign process, i think, in january of this year, right . So we actually did have some time savings and, basically, having designed the new product before the critical failure happened in the rail. So thank you for pursuing that diligently. And also just echoing director