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MINUTES

Room 201

City Hall,1 Dr. Carlton B. Goodlett Place

March 6, 2007

10:30 AM

Working Group on Taxi Driver Health Care Subcommittee Meeting

 

Present:  Paul Gillespie; Tom Oneto; Ruach Graffis; Brian Browne, Dennis Korkos

MEETING CALLED TO ORDER AT 10:35 AM.

STAFF IN ATTENDENCE:  Executive Director Heidi Machen, Deputy Director Jordanna Thigpen

NON-VOTING MEMBERS IN ATTENDANCE: Ilene Levinson, Carrie Winsten, Jim Soos

1.       CALL TO ORDER/ROLL CALL – Roll Call showed a quorum was present.

2.       GENERAL PUBLIC COMMENT:

·         Mark Gruberg: I have a document entitled “Healthcare by the Numbers” which I would like to hand out. UTW is proposing drivers pay $40 as a monthly premium for insurance. That represents 12% of the premium costs. The driver contribution rate assumed in the SFHP/DPH Report was 15-20%. The annual A-card increase for all drivers has to be $228.60. 84.34% of drivers without insurance said the reason they do not have it, is lack of affordability. 38.12% of drivers without insurance said they could afford to pay more than $50/month.

·         CharlesRathbone: Dennis will distribute another plan with zero premium to drivers. This is a  healthcare plan available at fractional cost to the industry.

·         Carl MacMurdo: On p. 30 of the SFHP/DPH Report, it states that the City Attorney has reviewed charging medallion holders and has determined that any charge to medallion hodlers will need to go the ballot. Please send a plan forward like the one described in the handout that Charles is referencing.

·         Jim Gillespie: It amazes me that this Committee is trying to fund a $16 million plan. There aren’t two pots. Also CCSF is pushing a health plan and Ammiano has proposed an amendment which would cover drivers working in CCSF. I think we can find a way to supplement the Health Access Plan. I wish people would focus on reality.

·         Michael Spain: With respect to the Chair, this is just stacked with driver representatives. Mark Gruberg established the income from peak time medallions to be $52,500 per year. There has been a big shift in the amount the drivers can make.  To put this on the industry without looking at driver income seems false.

3.       CONSIDERATION OF THE MINUTES FROM THE JANUARY 30, 2007 MEETING. [DISCUSSION AND POSSIBLE ACTION ITEM]

·         Brian Browne: I believe that we should pay for a transcriber because what I said isn’t being accurately reflected. I want to come in and listen to the tapes.

·         Paul Gillespie: I move to adopt the minutes.

·         Ruach Graffis: Second.

Paul Gillespie, Tom Oneto, Ruach Graffis, Dennis Korkos: yes                       The motion carries 4-1.

Brian Browne: no.

4.       CONSIDERATION OF THE MINUTES FROM THE FEBRUARY 6, 2007 MEETING [DISCUSSION AND POSSIBLE ACTION ITEM]

·         Brian Browne: I have the same objection.

·         Paul Gillespie: I move to adopt the minutes.

·         Ruach Graffis: Second.

Paul Gillespie, Tom Oneto, Ruach Graffis, Dennis Korkos: yes                       The motion carries 4-1.

Brian Browne: no.

5.        CONSIDERATION OF THE MINUTES FROM THE FEBRUARY 20, 2007 MEETING [DISCUSSION AND POSSIBLE ACTION ITEM]

·         Brian Browne: I have the same objection.

·         Dennis Korkos: on page 4 of the minutes, I was saying that the money should come from the General Fund.

·         Paul Gillespie: I move to adopt the minutes with Dennis’s amendments.

·         Ruach Graffis: Second.

Paul Gillespie, Tom Oneto, Ruach Graffis, Dennis Korkos: yes                       The motion carries 4-1.

Brian Browne: no.

6.       GETTING VALUE FOR OUR MONEY: WHICH PLANS WILL PROVIDE THE BEST VALUE AND WHO WILL ADMINISTER THEM? [DISCUSSION AND POSSIBLE ACTION ITEM]

·         Heidi Machen: Staff has prepared a memorandum on what the different plans we have heard about would look like, by the percentages as this Committee has approved them. Also, staff prepared a memorandum of February 19, 2007 describing some of the issues around administration and collection of funds. [Memorandums are part of record]

                PUBLIC COMMENT:

·   Charles Rathbone: I would like to refer to the Medallion Holders Association document which was distributed earlier. In this plan, there is no minimum hours requirement, no processing of an A-card needed. 100% of the funding would come from a .25 increase in drop. End up with $3.6m per year which is the approximate cost of the plan. We encourage the city to contribute but we would like to see this stay at home. We’d like to see access to clinics.

·   Mark Gruberg: It should be crystal clear that there are a group of participants here only to protect their own pocket books. To select one of these low-level plans is the equivalent to sending someone out to sea in a rickety boat and hoping they reach the other shore. They are invested in a low-level plan, and then they get cut off. Please look at the Dublin Services Plan and in particular the Kaiser component as the way to go.

·   Michael Spain: I am with the VA. Sometimes I sit there 1.5 hours before I get service. For us to believe drivers cannot sit in a clinic, is ridiculous. Charles outlined a plan which has our support, and DPH estimated $1m that it could contribute. We have anticipated setting up a plan which supports reimbursing the city.

·   Carl MacMurdo: If this Committee recommends a caviar and champagne plan, it won’t fly. A lot of drivers are reluctant to wait hours, but we can structure something where they make appointments.

·   Ilene Levinson: From the beginning, we’ve addressed affordability, accessibility, and choice. We have the ability to put a $75/month plan forward as well. We feel the benefits are unconscionable, so we haven’t. A driver could be blindsided by the additional costs. The two elements we have that are not in the Aarbis plan, are CCHP and Kaiser. BY offering only one choice, you’re not giving drivers the option.

DISCUSSION:

·   Tom Oneto: When I see free and $3.6m, I wonder, who’s going to pay for this? Brian Browne has repeatedly pointed out, elasticity of demand. Your plan is all about making the drivers and the public pay.

·   Dennis Korkos: This plan does not have to go to the ballot – it has no administrative fees.

·   Paul Gillespie: It’s also not much in the way of health insurance. It’s very little more than going to free clinics.

·   Dennis Korkos: The difference is that this is reasonable.

·   Ruach Graffis: The big problem here is the fees will certainly go up. And then, the meter will have to go up. Where is the cost of living for that? You’ve got to cover the cost of health care. I don’t have a problem with the driver paying some money. I’d like to see the meter increase go towards the driver contribution. The problem with this plan, it’s so minimal, and you use it up.

·   Brian Browne: The Controller reviewed 6 different elasticities. All were done in the 1990s – we’re now post-9/11. Then the Controller gave us a matrix. This is the holy grail of how we respond to fares. You can go up to $23m. If you increase the fare, after a short time, people take another mode of transportation. Any charge increase, increase the marginal cost of doing business. I want to ask Jim Soos – we’re trying to insure every person in San Francisco. What benefits would we get by having people go over to HAP? I want to find out. We’re trying to do the best we can but everyone’s trying to get these people here. What can you give to our 4000 drivers? These elasticities don’t provide any meaningful numbers. That’s my economics for the day.

·   Jordanna Thigpen: HAP is not insurance, and it is not portable. Additionally, the amendment regarding those who only work in SF and don’t actually live here hasn’t passed the Board yet, so all the drivers who stated they are not San Francisco residents, would not be covered. Additionally, color schemes are not contributing to HAP, because drivers are considered independent contractors, and this Committee has voted that color schemes should contribute. Only businesses with employees pay.

·   BrianBrowne: Well I just want to say that looking at what the Controller submitted, it’s an impossible dream.

·   Ruach Graffis: What I am hearing is that because of the HAP plan, color schemes don’t pay. Other small businesses pay but color schemes do not.

·   Brian Browne: I went through a hard phase where I had to come up with $7,000 a year for health care for my family. We have to come up with something that is reasonable for the Budget Committee.

·   Paul Gillespie: It’s interesting when you say there’s no pot of money. There is if you consider the following proposal. We should mandate the use of high-efficiency vehicles – CNG/hybrid. The driver   saves $15-$20 per night. $5 of that will go to the COLA increase, $5 goes to the color schemes to subsidize the purchase of the vehicles, and $5 goes towards the contribution for health care. We get a brand new, clean, and green taxi fleet. Drivers save more on gas. Then we raise the gates $15. As far as what we offer, I think we offer the Dublin Plan, and people can upgrade to a higher plan. The only way we’re going to make this better, is to enhance the viability.

·   Tom Oneto: Unfortunately, your plan is not on the agenda. It could go on the Commission agenda however. Additionally, it was mandated by the Board that we offer many proposals.

·   Ruach Graffis: When we go forward with our recommendation, I would expect them to be recommendations – not, “You can have this garbage.”

·   Dennis Korkos: I am confused because I thought we voted to have one plan.

·   Carrie Winsten: For ERISA purposes, it is OK to have on base amount with other options and then people pay the difference on their own. If you’re talking about a dollar amount, and it’s middle of the road. Then people are trying to upgrade to the higher option.

·   Ruach Graffis: That being said, I am leaning towards CCHP and Kaiser.

·   Ilene Levinson: Under the menu, then if you decide Select Benefits for funding, you can upgrade.

·   Ruach Graffis: I propose we fund at CCHP.

·   Carrie Winsten: You want to keep Select Benefits?

·   Ruach Graffis: I move that we contemplate CCHP and Kaiser only.

There was no second.

·   Paul Gillespie: Can we recommend Dublin?

·   Carrie Winsten: Dublin was able to obtain the best rates.

·   Brian Browne: Dennis Korkos presented a great, low-cost plan. I don’t think the higher cost plans are realistic.

·   Dennis Korkos: Even you Tom have said that it’s all coming from the meter. Why complain about a measly 25 cent increase? My plan is just one more option.

·   Brian Browne: Then if you’re going through $11m, $14m. You have to go back and look at the contributing elasticities. Everything will come off the meter eventually. Todd didn’t put in much higher ones.

·   Tom Oneto: That is exactly why all of this should go back to the full Commission. Then we can discuss options like Paul had. This is our last meeting.

·   Paul Gillespie: We don’t have a chart here in our memorandum from staff showing the higher amount for CCHP and for Kaiser. I would like to see that.

·   Ruach Graffis: I want to get rid of Select Benefits.

·   Tom Oneto: It cannot be all or nothing, Ruach. There has to be realistic financing.

·   Ruach Graffis: If we can find the money for $11.5m for Select Benefits, then we can find it for the higher plan. Let’s not compare apples and oranges with garbage.

·   Paul Gillespie: Kaiser and CCHP are the same price.

·   Tom Oneto: I move to forward all plans offered by Dublin, with a recommendation for Select Benefits.

·   Ruach Graffis: I am not willing to have Select Benefits as the base.

·   Paul Gillespie: I second.

Ruach Graffis, Tom Oneto, Paul Gillespie: yes                                The motion carries 3-2.

Dennis Korkos, Brian Browne: no

·   Heidi Machen: Now the Committee needs to decide who the administrator will be, for purposes of the employer of record. The question is, who would administer the plan?

·   Paul Gillespie: I move that we recommend a Taft-Hartley Trust with a Memorandum of Understanding or some entity as employer of record.

·   Tom Oneto: I second.

·   Brian Browne: Who would be the administrator?

·   Dennis Korkos: Would an administrator cost money?

·   Brian Browne: I don’t have enough information to vote on this. I would probably vote for it, if I knew more about it.

·   Carrie Winsten: The industry standard is 3-4% for administration. We are charging 1.67%.

·   Ruach Graffis: I would like to introduce an amendment to the motion that any Taft-Hartley Trust be required to comply with the recommendations on pp. 3 and 4 of the staff memorandum of February 19, 2007.

·   Paul Gillespie: I accept your amendment.

Ruach Graffis, Paul Gillespie, Tom Oneto: yes                                The motion carries 3-2.

Dennis Korkos, Brian Browne: no

7.       STAKEHOLDER PARTICIPATION IN FINANCING [DISCUSSION AND POSSIBLE ACTION ITEM]

PUBLIC COMMENT:

·         Charles Rathbone: It’s an elementary understanding of business that all costs end up going through to the customer. If you’re talking about a $14m-$17m plan, that will be passed on to the customer. Trying to fund through the fare box is wrong. We should consider the consequences.

·         Mark Gruberg: I don’t agree with that. We’re not asking for a COLA. The .25 cents from last year didn’t even come close. Drivers and companies are swallowing the cost at this point – we are all swallowing something. We recommended a modest meter increase. We are asking drivers to pay a small portion. The .25 cent increase that already occurred is for gas and should be considered a done deal.

·         Dennis Korkos: Didn’t UTW oppose the last meter increase?

·         Mark Gruberg: Yes, because we wanted it tied into the healthcare discussion.

·         Michael Spain: The last gate/meter increase was in 2002. I agree it has to come from the fare box/ What I see out there, is that there are too many riders. Even low-income workers, people who take the bus, are standing at the bus stops flagging cabs. I see a tremendous amount of ridership. If you make it cheap for everyone, you’ll have excess demand. The public can pay another $1.50-$2.00 per fare. Without a meter increase, this is not feasible.

DISCUSSION:

·         Ruach Graffis: I have some suggestions. I hear the companies’ pain. This might be the time to discuss a medallion lease fee cap.

·         Dennis Korkos: We are talking about meter and gate increases. Your proposal is not on the agenda.

·         Ruach Graffis: There is a $1.50 that the companies have been collecting for paratransit, which should have been earmarked for this.

·         Paul Gillespie: I want to have my proposal for the $15 gate increase before the Commission. We are still due for a meter increase, but I don’t want to recommend it for health care.

·         Brian Browne: We’re creating an entitlement program. We need to get rid of the regulatory lag.

·         Tom Oneto: I agree with you. This will increase yearly. CCSF has to be aware of it, because they go through their budget yearly. They will have to properly regulate. We should insist on a preamble. Does everyone agree that the contribution from the riding public should defray costs to certain stakeholders?

·         Ruach Graffis: No. I don’t agree. Drivers deserve the lion’s share of any meter increase since they’re paying 30%.

·         Paul Gillespie: Last year we talked about a $1 increase. What we’ve put on color schemes right now, it’s not sustainable. There is money in medallion holders, but in color schemes, there’s no money.

·         Ruach Graffis: I would like to see the health care plan go forward.

·         Brian Browne: My general commitment to regulatory reform covers all of these points. Today, nothing will be achieved. Let’s commit to regulatory reform that will address the issues of defraying costs, capping the amount of the meter increase, the .25 cent increase, and whether there will be a gate increase.

·         Paul Gillespie: The Board has already committed to looking at the gate and meter every two years.

·         Brian Browne: Well we should have more public hearings. We should have a system. Aaron Peskin has stated “I hate this taxi business.” We should have public hearings on the meter and gate.

·         Paul Gillespie: 50 cent flag drop increase, $10 gate increase is what I am advocating at this point.

·         Ruach Graffis: How about a .50 cent flag drop increase and a $5 increase in the gates.

·         Dennis Korkos: With the types of plans you are proposing, the burden on the riding public is just too much.

·         Paul Gillespie: $5 gate increase and .50 cent flag drop is too much?

·         DennisKorkos: You have to increase the fares for COLA, and the gates as well. It will spiral to an unworkable amount. I am looking at what the industry can sustain.

·         Paul Gillespie: I move for a 50 cent drop with at least a $5 increase. $10 is more realistic.

·         Ruach Graffis: I will go with $5 only. I second.

·         Paul Gillespie: Brian, I want to make clear to you, that this does not in any way deal with an inflationary aspect. This should more than cover the color scheme portion.

Paul Gillespie, Ruach Graffis, Tom Oneto, Brian Browne: yes                 The motion carries 4-1.

Dennis Korkos: no

8.       ALLOWABLE OPT-OUTS FROM THE PLAN – WHO CAN BE EXEMPTED?

PUBLIC COMMENT:

·         Charles Rathbone: Obviously a single owner-operator should be excluded. He has no drivers and there is a burden on him to provide healthcare. Why would we want them to opt out – it’s to get out of an unreasonable tax, that’s why.

·         Jim Gillespie: 39% of drivers aren’t interested in contributing, and we have to push this forward. Other people should be able to opt out too though, specifically, those with insurance.

·         Michael Spain: I don’t understand this item. In single owner operators, I would also include long-term leases. It should be anyone who can verify they’re in a plan.

·         Mark Gruberg: I think when you start allowing exemptions, you have enforcement problems. For owner operators, does that mean the color scheme doesn’t have to pay their part, or the medallion holders wouldn’t pay their part, or both? The 50 cent increase will go a long way to cover the color scheme portion. It will make it easier for them to pay. Those with proven insurance should be allowed not to participate. It’s a whole different question talking about color scheme vs. medallion contributions.

·         Frank Dunne: Will single owner/operators be able to keep the rate increase? Since they are opted out?

DISCUSSION:

The Committee agreed by consensus not to vote on this issue.

9.       ADJOURNMENT

The meeting was adjourned at 12:40 PM.

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