What is toe overlap? Toe overlap is when a rider's feet are at 3 o'clock and he turns his handlebars, and the back of the tire hits the front of his foot. This is more of a challenge with bikes that are shorter and more compact in length. Generally, on an upright city bike this is more of a problem because riders make more sharp turns, and so must turn their front tire more drastically. Yet, even on a road bike this can be a problem. This problem can also be exacerbated if you have fenders on the bike.
Unlike many issues on bikes, there is no adjusting things to get rid of this problem. This is simply something that must be dealt with (other than getting a different frame or removing your fenders). Instead, a rider must learn to cope with this and alter his technique. This means keeping the pedals in an up and down position when turning. This takes some getting used to, but it is also really the only way to cope with this problem.