Chris Hayashi Opens Her Desk Drawer

Director Chris Hayashi, as many of you know, has been accused of hoarding medallions in her desk drawer. I guess this is her answer to those critics.

Before I started my shift Saturday night, Charles Rathbone alerted me to this little chart tucked away on the SFMTA Taxi website. I don't know much about it. But it appears that Director Hayashi will be giving out medallions after all ... "for free."

SFMTA Taxi Services

Notice: Offer Letters

Per SFMTA Transportation Code, Division II, Section 1121(b), the following shall serve as notice for the individuals who have been sent an offer letter for a regular/ramp medallion taxi permit.

Regular Taxi Permit Offer

Sent June 11, 2010

List #	Name	Type of Medallion
6-960	Osama Haddad	Ramp
7-010	Vadim Sheynkman	Ramp
6-926	Mikhail Shubov	Ramp
6-518	Guillermo Tovar	Regular
6-740	Tito E. Dziensuwski	Regular
6-741	Adnan Atshan	Regular
6-742	Zalhdee A. Corpuz	Regular
6-743	Hsnein Al-Ghazzawi	Regular
6-744	Dmitry Vaynshteyn	Regular
0-000	Azzam Ennazzer	Regular
6-745	Brandon H. Wong	Regular
6-746	Kevin Tou	Regular
6-747	Mekonnen T. Zere	Regular
6-748	Nadeem A. Piracha	Regular
6-749	Benjamin F. Usog	Regular
6-750	Negusse H. Zeleke	Regular
6-751	Mohammed H. Khan	Regular
6-752	Hong Che	Regular
6-753	Francoise Spiegelman	Regular
6-754	Kirill Sobolev	Regular
6-755	Manuel Nunez	Regular

This comes as a surprise to me since the director recently said that she wouldn't start giving out regular medallions until after July 1st.

If nothing else, it's a good political move and should silence those of her detractors (for a few minutes anyway) who claimed that the SFMTA would never give out a "free" medallion again.

Seller & Buyers Meeting: Buyers

Rebecca Lytle of the San Francisco Federal Credit Union with help from Chris Hayashi led the buyers portion of the June 7, 2010 Town Hall Meeting with sellers and buyers.

Because I've already posted on this subject a couple of times recently and because the subject is very complex, I'll make this article short and sweet. To research this further contact Ms. Lytle at 415.359.2926 or check out the Taxi Medallion Financing website.

A Few Points

The list on the left gives the interest rates and monthly payments for various different situations.

For someone who takes part in the Down Payment Assistance Program, however, the interest rates and payments would be higher. For instance the figures for a buyer who only puts down $12,500 would read:

• 3/25 Balloon 8.25% Interest $1,873 Monthly Payment.
• 3/15 Balloon 8.00% Interest $2,270 Monthly Payment.
• Some examples.

So of course the larger the down payment, the smaller the monthly payment.

The most interesting (and unusual) feature of this package are the options of paying off the loans over 3-year, 5-year, 7-year or 12-years periods. The payments on the 12-year loan could pretty much be covered by the monthly check given out by some of the companies.

And, of course, the sooner you pay off the loan, the less money you pay for the medallion thus making it more valuable.

Q & A

Q: Do I lose my place on The List if I'm turned down for a loan or finally choose not to buy?
A: No. You are removed from The List only if you do buy or fail to follow the rules.

Q: Do I lose my medallion if I finally choose not to sell?
A: Once you execute the sellers agreement, you are committed to sell. Otherwise the medallion stays with the current medallion holder - as long as he or she follows the rules

Q: If I have bad credit or no credit will I be turned down for a loan?
A: Not necessarily. It depends upon your overall financial picture.

Rebecca Lytle once again emphasized at the meeting that she thinks that "most applicants will be accepted."

Criticism

A few drivers criticized Chris Hayashi for only having a single loan group available. One guy even stood up, screamed that the interest rate should be 4.5%, and left - without bothering to tell us where such terms might be available.

Driver Tariq Mahood, who is not on The List and therefore is not eligible to buy, attacked Hayashi for not opening the process up to more lenders, an attack he continued the following morning with an e-mail sent to seemingly everyone in the taxicab business.

Response

Hayashi said that any lender qualified by Taxi Services could participate as long as they have no early payment penalties or other fees. She wants the loan companies to be qualified so that medallion holders aren't preyed on by loan sharks or controlled by taxi companies.

She said that she took a call this morning from Medallion Financial in New York (possibly motivated by Tariq) and told them to send her a letter to start the qualification process - just like she'd do for any other financial company that called her up.

At least she thinks so - this is the first finance company ever to cold call her.

A Defense

The criticism of Hayashi implies that she is either incompetent or dishonest. It also assumes that there are thousands of banks, credit unions and other financial institutions just eager and ready, jumping at the chance to lend to money to taxicab drivers.

The truth is this:

Last winter, Director Hayashi sent out letters to all 34 San Francisco credit unions (from a list provided by me) inviting them to partake in a Town Hall meeting about loaning money to cab drivers for the purpose of purchasing a medallion.

Three credit unions (3) sent representatives to the meeting joining a banker from The Bank of the West who had been invited by their client, Cindy Ward of Desoto Cab. All three reps disappeared within 45 minutes. The banker stayed out of deference to Cindy but his knuckles turned white from clutching his chair and he stared at me with a fixed, nervous smile while I tried to convince him that I would have made a good bet on a loan despite the fact that I'd paid for everything in cash for 20 years and had a 0 credit rating.

None of these four financial representatives ever contacted Hayahsi again.

The fact that a loan package exists at all is little short of miraculous.

I don't know where or how Hayashi found the lenders. I have no idea how she matched the San Francisco Federal Credit Union's local understanding with the Montauk Credit Union's expertise and brought in the other two companies to make the loans possible.

If I write a book about the creation of this Pilot Program (a thought becoming serious), I'll need to devote a chapter to this all by itself.

In addition, the loan package is better than anything else on the market.

• There are no early payment penalties like there commonly are in New York.
• This is the only type of loan from any credit union in the country than requires less than a 20% downpayment from the buyer.
• SFFCU and Montauk actually will loan money to people like myself who are responsible but have no credit history.

Putting this package together was one of those mysterious actions that only Chris Hayashi could have pulled off. It matches her other feats:

• A year ago, I would have put the odds against the Pilot Program existing at 100 to 1. I interviewed her at about that time and told her that coming up with a program that would satisfy the Mayor, the MTA, the Board of Supervisor and the various cab factions would take the wisdom of Solomon. I was trying to make her feel good. I didn't think Solomon could've done it.
• In the space of less than two weeks she turned the MTA Board from being 6 to 1 against her to 6 to 1 in her favor and Malcolm Heinicke still doesn't know what happened to him.
• She actually did get a consensus (minus Gruberg of course) from cab drivers about the Pilot Program. Think about this! When was the last time you heard two cab drivers agree on anything?
• And, since the plan passed, without Hayashi to hold their hands, many of these same consensus drivers have reverted to form and are savaging each other on e-mail lists.

Face it! The woman walks on water.

As for her critics? They know not of what they speak.

I guess this post wasn't short after all. But it was sort-a sweet.

Seller & Buyers Meeting: Sellers

Director Chris Hayashi of Taxi Services and Rebecca Lytle of the San Francisco Federal Credit Union led a by-invitation-only Town Hall Meeting for buyers and sellers yesterday. Over a hundred medallion holders and wannabes showed up.

Numbers

The final figures are that 202 medallion holders signed up to sell their medallions and 1,442 want to participate as buyers.

Chris Hayashi says that she sent out 123 offer letters to buyers. Why 123? I forgot to ask but she has previously said that she could process 100 medallion sales this year and she thinks that some potential buyers might not be qualified. She probably wants to be sure that she can hit the century mark.

Not all of the 202 medallion holders who sent in their participation forms actually will sell their medallions. Some will choose not to. Others won't be qualified.

So the final number of medallions that will be sold under the Pilot Program remains unknown. More than 100. Less than 202.

What Sellers Must Do

Before the potential sellers can transfer their medallions they must sign and execute two contracts. (The details for this will be included in a package sent out by Taxi Services.)

The credit unions need a specific medallion number in order to process a loan. Once the medallion holder has turned in his or her paperwork, he or she will be will be matched up with a specific buyer and the sale can take place.

Contrary to our ever-incompetent local press, there will be neither hearings nor auctions. The buyer will show up at Taxi Services with the $250,000 fixed price and be given a slip showing that she or he owns a medallion. Handing over the medallion would be a nice touch but I don't know if Chris intends to do that.

To repeat what I said in a previous post, the people who complete the paperwork first will be the first to be matched up for a sale. Hayashi would like to see at least 10 medallions sold by July 1st.

More on Sellers and Selling

Once the seller executes the contract, the proceeds from the medallion sale can be passed on to any heirs or partners in case of death. Therefore Hayashi encouraged all sellers to designate a power of attorney.

Hayashi said that, as much as possible, she will try to accommodate the individual situations of the sellers.

• If a driver is disabled, for instance, he or she could sell their cabs later on so that they can continue to keep their monthly payments from the cab companies for a long as possible.
• Older or sick drivers, on the other hand, might be able to sell their medallions first.
• All things being equal of course. It's a complicated matter of mixing and matching the buyers and sellers.

People with disabilities should contact Hayashi's assistant Michael Harris at 701-4400 for special help with their situations.

Other points

• The medallions will originally stay with the color schemes where they are being held. The purpose of this is to insure continuity. Neither the companies nor the shift drivers will be hurt by a sale.
• Once the medallion is sold, however, a holder can switch to another company provided he or she follows the rules set forth by the Taxi Services.
• Once a buyer purchases a medallion, he or she will be able to turn around and sell it through Taxi Services. "But," Hayashi added, "there wouldn't be much point in selling it in the next 6 months because there be little equity."
• A seller cannot specify a certain buyer. They will be matched up by the criteria mentioned above or at random.

Downpayment Assistance

Which brings us to the least popular part of the program for the sellers.

• It's random because most sellers would not want to participate.
• If a seller does have to help with the downpayment, it would be held in a CD earning approximately 4% interest until it is paid off.
• It would take about 9 years to pay off $37,500.
• The original seller would be paid off if the new medallion holder dies, re-sells the medallion or has the medallion revoked and re-sold by the MTA.

Q & A

Q: Can a seller stop working once he or she executes the contract?

A: Not necessarily. All the rules covering medallion holders continue to apply until the medallion is sold. This means that the seller must drive the required hour and still can't assault the customers.

Q: What happens to the downpayment if the buyer dies? Meaning, I think, do his or her relatives have to pay? If so, how much.

A: The regulation on this is being written and needs to be okayed by the MTA board but it will involve some sort of pro-rata payment.

Hayashi emphasize that "this is a pilot program" and that if some things don't work or can be done better "they can be changed."

Tomorrow: Buyers

Two Hearings and a Score: Taxis 2, Gruberg 0

The first Medallion Pilot Program Hearing took place on Friday, June 4, 2010. Contrary to the press and rumor, these hearing were NOT for the purpose of selling medallions but only to discover if the applicants were qualified to buy medallions.

Hearing Officer Henry Epstein (photo), with the help of Investigator Michael Harris and Attorney Jarvis Murray of Taxi Services, found applicants Muwaffaq Mustafa (photo), Raymond Chiu, Johnny Huynh and Ahmad Sidaoui to be qualified to buy a medallion - if and when a sale takes place.

The fireworks, however, occurred prior the hearing when Mark Gruberg made two attempts to stop the proceedings.

Attempt Numero Uno

took place on the morning of June 4th when Gruberg filed a "PETITION FOR TEMPORARY RESTRAINING ORDER ..." in Superior Court on behalf of William D. Pallas and five other drivers on the waiting list.

Using a throw-enough-stuff-at-a-wall-and-some-of-it-might-stick strategy, Gruberg's complaint rambled far and wide. However, there were three main points of attack.

1. The Pilot Program imposed "a special tax" that hadn't been approved by two/thirds of the voters.
2. The Pilot Program denied "due process of law" and continuing with the hearing would do "irreparable harm" to the plaintiff's chances of getting a medallion for "free."
3. The Pilot Program was an "abuse of power."

I didn't know about the proceedings until they were already over so I interviewed Director Christiane Hayashi on the subject yesterday.

She dismissed the arguments about a special tax and abuse of power as "ridiculous."

Hayashi went on to say that she and her attorneys argued:

• The positions on The List of the plaintiffs would actually be improved by the Pilot Program.
• The six plaintiffs would advance from 20 to 200 positions if the all the medallions scheduled for sale were sold.
• At the rate of selling 35 medallions per year, this could shave as many as 6 years off the wait.
• Because the plaintiffs would actually benefit from the Pilot Program, at this point it would be impossible to prove irreparable harm.
• In any case, the hearing in question is only to see whether or not an applicant is qualified for a sale. Therefore, it would not have an adverse effect on the plaintiffs at all.

Director Hayashi also said that the Pilot Program had been discussed for 175 hours at Town Hall Meetings and also had been written about so that what the program contained was public knowledge.

Attempt Numero Dos

took place at the hearing when Gruberg tried to delay the proceeding by claiming:

1. A proper notice of 30 days was not given before the hearing.
2. A proper notice of 72 hours was not given under a different rule
3. It wasn't properly specified as to what the hearings were about.

Hearing Officer Epstein answered thusly:

1. The 30 day notice was for the applicants not the general public.
2. More then 72 hours had passed since the hearing was posted so the public had been adequately informed.
3. The notice for the hearing could have been more clearly written but it was clear enough.

Hayashi added that any public comment was allowed at the discretion of the hearing officer meaning that Gruberg's whole line of argument was lame.

Of course the more interesting hearings will be the ones where they actually sell the medallions. And, to tell the truth, I don't have the foggiest notion of when this might occur.

I'll try to find out. So, no doubt, will Gruberg.

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You'll have noticed, gentle reader, that I haven't stopped posting. My threat to do so was due to a temporary burn-out. Sorry.

Many thanks to the many people who either complimented me in person or wrote me that I shouldn't quit. It's nice to know that people appreciate what you do. I'll stick it out to the end.

Ed

Help in Qualifying for a Loan

I'm turning this post over to Rebecca Lytle of the San Francisco Federal Credit Union.

To all those considering a medallion purchase:

The feedback I’m getting from many potential medallion purchasers is that they either feel overwhelmed by the process or have decided erroneously that they don’t qualify for a loan. I would like to get the word out to all applicants who meet the SFMTA driving qualifications to call the credit union for an orientation and free confidential evaluation. Please don’t jump to a premature conclusion that you won’t qualify for a loan.

We have had the opportunity already to talk with many about his or her specific questions and concerns. We’ve been able to provide the information others have needed to make a well informed decisions about their medallion purchases. There are lots of questions and misinformation floating around right now. You need accurate information to help you make the decision that is best for you. Let us assist you.

Please keep in mind the credit union wants to help you qualify for the loan; and, even if you don’t qualify today there are steps you may be able to take which will make it possible for you to qualify at a later date. We will help you understand exactly what it is that you may need to do to qualify for a loan. Don’t feel like you have to sort thru the loan application packet on your own. We are available to help you.

All of those who recently received a letter from the SFMTA informing you of your eligibility to purchase a medallion are invited to a Town Hall Meeting next Monday, June 7th, from 4 – 7 PM at One South Van Ness, 2^ndFloor Atrium, San Francisco. SFMTA should have sent you an invitation to this meeting last Friday. If not, come anyway.

The intention of this meeting is to provide a forum to answer questions regarding the purchase of medallions, the loan application process and the medallion application process. I encourage all of you to attend this meeting.

I also invite all of you to call or come in and talk with us at the Credit Union. We are here to help you achieve your medallion purchase.

Please call Kenny, Tony or me at 415-359-2977 or email us at

Kenny Yip Kenny_Yip@sanfranciscofcu.com
Tony Wong, Tony_Wong@sanfranciscofcu.com
Rebecca Reynolds Lytle Rebecca_Lytle@sanfranciscofcu.com

Respectfully, Rebecca

Rebecca Reynolds Lytle
Vice President of Lending

San Francisco Federal Credit Union

Hearings for Medallion Sales to Begin on June 4, 2010

Medallion sales could begin as early as June, 4, 2010. The first five potential buyers will be given a chance to present their cases for qualification at 1 pm on that day. If they are qualified, they will do the paperwork and presumably hold the medallion soon aferwards.

Contrary to rumors, Mark Gruberg's suit has not stopped the process.

You can keep updated on the progress of the sales at the Taxi website.

That's all I know.

More later I guess.

On the other hand, I've done what I set out to do and maybe it's time to put this blog to rest.