Them and if they dont, were given a company that doesnt qualify a 20 Million Contract to date. Im encouraging our body to not disrupt or process at all, coming up with a transition between contract a and b. None of the product is pr pro py tore. We by it and own it and get to use it. Ill just tell you where im at. I was here in 2017 and i owned it then and i will own it now. Once you sign off on something, you dont walk back. We had a discussion in 2017 and this would all come up and laid out. And i supported it then and i support it now. I appreciate what youre saying. Whatever, but we signed off on this as a commission. And everyone commission there, i was here, president brandon, commission kunalokis and commission katz, we had this discussion and it was tough. I cant see this putting this out to bid i mean, we have to own this. We signed off on it. Im going to vote in favour because i agreed to do that. But to stop everything and then you want it back out to bid, i cant support that. We have to live with that and i hope weve learned something from this process. But i tell you where im at and if youre worried its no good, you cant stand up to show who you are, if you support something, you need to show it then and i support it now. I agree with you, maybe the ordinance, skirting around this, so i will be voting support this. Thank you, any other comments . Im just curious, wont happen if we just to have more fumtime for discussion, wont happen if we dont vote today were not doing anything illegal here, not about awarding a contract, so it is conforming. If it is illegal, i would not be voting for or in support of this. I think this is not necessarily deliberately si sir circumventi. It was not like that. Its people, not laws. Its how people interact. So i understand what the commissioner is saying and we need to stand by the decision we made and i think thats where we agree with the values of San Francisco and i cant change the whole state of texas. Its going to happen one by one, person to person. Thank you. So regardless the though Million Dollar 40 millionstays o the lb support services and lbe along with other businesses, but only approximately 25 of this amendment will be going to ch2 . So im ok with supporting that, but i do want to say that i hope that within this amendment, we have everything we need because going forward, we do need to look at how were going to structure the new contracts once this phase a completed. I dont think youre going to have a lot of success coming back with more amendments the way the contract is set up now. So i support this effort now but i know there are a lot of unknowns. I know we have a lot of work to do, but i think we ahead to start now figuring out how well do it. If i can Say Something because we are thinking about that and one of the amendment pieces is the Workforce Development and the contract structure and so, were bringing in the best experts in the city to think that through. Its junior we need keep pace with the army corps and these are major changes to respond to but any major change, i think well see far enough ahead in the mirror to make plans to go out and bid work, to do things in ways that everyone on the commission can feel comfortable withs the majority o. We can change states. That we have the power of how we contract to have San Francisco values upheld and i as a commissioner will not be in favour of any contract moving undergraduate in the bid process, even if the midst of when they apply, before it comes to finalization at this commission, if theyre on the covered state list. Particularly if that is expanded to reproductive rights for women, i cant have us use or funds that way and the staff and fellow commissioner, i will not be comfortable voting on contract awards. Any other comments, statements . All in favour . And any opposed . I oppose. Four for and one against. 11944 has been approved. The pier 14 and agricultural building. Im sorry, we were moving this to . Good afternoon. I dont have a 20 Million Contract amendment for you or probably some of the controversy that very interesting discussion went through and i thank you for that and i i i thank you for hou influence the port staff poin. I have a temporary art installation and i will support that and i will talk to you about how the port selects art in the processes we go through and ask your advice for how we might do that as we go forward in the future. Gateway tower is a reenter takes of that. That. We have a draft goal statement how the art hopes to education and inspire discussions, delight citizens and add to the water recognizable place. We also do a number of pieces of public art with the city. With the San Francisco Arts Commission. They have three programs in place they use to bring public art into the city. The 2 on public projects and weve been part of those when we get public money threw general obligation 2 of the Construction Cost goes for public arts and when we get one of those, that money, the Arts Commission becomes the project manager on that. They do a selection panel. An rfq and rfp. They do contracts, management fabrication, management even set up a Maintenance Fund as part of that. Their fee for doing that is 20 of the art cost so on a 200,000 thats 40,000 and out of 300 thats 60,000. The substantial service we provide and we have used that on projects. You will see that on the public art proposed for criminal. You saw it on the art that went in on third and cargo way last year and also port youth on the bay view rise sculpture from the silos. Services of the Arts Commission. We have a couple other tools that they use through the downtown plan thats not one that we get involved in necessarily. They also have a Public Art Program that puts up the policies and procedures for how artists acquire how to place, manage and how it becomes part of the citys art program. The port tries not to own art. Were not set up to manage it and maintain it. The port is home to remarkable pieces of public art. Oddly enough, this is not, this is a piece that did not go through the standard process that the Arts Commission was the one that organized it and the artist was selected by the gap building who is agreed to fund it and bring it in but its a very notable piece. Another one that is didnt go to the whole Selection Process. When there are certain opportunities that come forward, such as this louise spider at pier 14. An amazing bronze piece. You are not supposed to climb on but its a great photo. [laughter] how can you not climb on that. There are opportunities that come forward and the Art Commission brings those to us. And its not a financial contribution by the port. So those are other examples of how art comes to us and some very good ones. Right now, when art does come forward, the port does not have a budget for public art. We dont put money forward towards that. We look at where the artists are from. We have always selected San Francisco or bay area artists as i mentioned before. Its getting harder for the only San Francisco artist, because of the cost of living, and theyre not requirements necessary. We go to our Citizens Advisory Committee and it comes to the commission. The commission in its leasing policy adopted on july 9th of this year and adopted every year or two years has a policy and says ok for major site the executive director is authorized to wave the license fee for art that were not already using it or leasing it for another purpose that furthers our public purpose of attracting people to the waterfront so its a benefit to the port in that manner and that there are no other uses planned for this space and this time. Its about six spaces. The pier 14 is one of those and its not the successful one of them. Artists come and finance are here because it and identified these top space force this. We look at qualities of our art is well and this is something we see as we go forward with a set of hard guidelines and mater time. That was the bulk of it. We employed the Arts Commission with their fee to manage this process and set up a selection panel. I believe we received 200 initial proposals and a nation wide search and it was narrowed down and it was accepted. Its truly an amazing piece. Sometimes they come from other sources too. From the Governors Office for the Global Climate summit. The polar bear came forward. It was a fantastic piece made up finished with car hoods. It spoke to the political statement about the Climate Change and who might be effected on that. There are pieces that come to us as such as problem the favorites of all time the rocket ship. On the team that designed and brought that to us. As we go forward. Again, that one did not go through a formal Selection Process to support did it make a financial contribution but allowed location to be our contribution. If you call this art, its related to the seawall interpretive and it shows how far Sea Level Rise is going to impact the port that that the facility is going in the future. This is a ramped area of pier 14 that goes up and ties these lines to different things. So im here to talk that concludes my presentation about proposed piece of public art and a little bit about how we do Selection Process and ill sit down now but im also here to answer questions about how we do Selection Process and how we might go forward in the future. And then look forward another time to come back to you with that. Thank you. Thank you. Is there any Public Comment on this item . Seeing none. Commissioner. Ill move the item. Only information . Great presentation. I just have one question. So, if your grant is to transfer for a project, say its a Million Dollars, 25 of it goes to the Arts Commission for maintenance. If the, for instance, if its port received city money for a project, ill just relate this port property. 2 of the Construction Costs of that project is for public art. Of that 2 , call it 100,000, the Arts Commission, managing the project would go to the Arts Commission for this city money project and they take 20 of that. They would take 20,000 of that 100,000. Do they maintain it or they just . They just manage it. It does not include maintenance. Does the maintenance go back to the original artist . How does that sort of get managed . If its added to the citys collection, then the city becomes responsible for it and the Arts Commission often tries to set up a Maintenance Agreement of some sort or some type of endowment and i believe theres a provision where we can take another 5 of the budget and put that towards a longterm maintenance. Great. Thank you very much. Great presentation. Very interesting presentation and i kind of like the idea of having a reinterpretation of court towers so thats very innovative. With the victoria yan sort of doors of San Francisco, which is very much our icon here. I just wonder, how long will this installation be . Im not sure i saw that. The temporary art, temporary artist, quite a well accepted thing. If you dont like it it goes away. People are accepting. The Community Welcomes temporary art. Permanent art, people become more opinionated about it. [laughter] this is a proposal for 12 months to a license for 12 months and the artist said theyll probably stay nine months of that and that wore offering the opportunity for 12. In the past, what happened to some of these pieces after they were taken off our property . The artist have taken and moved them to another location. The polar bear has a trip planned to various states to put it on because it was speaking to such a social issue. I believe some of them have been sold. I believe that the rocket ship got sold. The rocket ship is installed in denver, colorado. The location with the bay bridge back drop with San Francisco provides exposure to artists and again, one of these installations cost an artist 60,000 to install and installed as a general round number so its no small undertaking after they fabricate to bring it in and do all this go through the license process and encroachment permit process which is similar to a building permit. It hasnt enhanced our waterfront so im supportive for the project so thank you very much for the presentation. Commissioner gillman. Thank you so much for the presentation. It seems like an incredibly schoocoolwon zest what will we e port to make sure we advertise when we do a Ribbon Cutting or some sort of ceremony to bring in the fact this is coming. Since it is two iconic things, the doors, its also speaking to the Affordable Housing crisis. I think there are so many ways we can help elevate is san franciscans know its here and if we fell in love of it, we would have an option to keep it . Those are my two questions. The first question, please look forward to a opening Ribbon Cutting of which you will be invited to attend and the date is trying to be arranged right now. Which we hope to have the mayor at as well and Port Commission for this. And i believe were looking at somewhere in the end of october early november. And thats about as much as i know. I was given authorization of doing public art without checking with them for up to two years. We would have to talk to the artist to see what their plans are for the piece. They own it. The port doesnt own these pieces. And providing insurance, of course. We have an Excellent Communication Team and one of the finest of any City Department and i hope we push it out and elevate it because its such a timely issue this is so neat. I always appreciate when we have this about waterfront and we really ought to as much as we can promote it and we want school kids and anybody to come out and see that. Theres no waterfront like ours. I just want to say thank you and im a big supporter. Thank you. Thank you. Dan, thank you so much for this presentation. Im really looking forward to this art installation and i think its going to be great. Im looking forward to the Ribbon Cutting and seeing the tower go up. Regarding the art, i guess im a little confused about what are port wide art program is. What locations are available. Does a person have to go through the Art Commission to go to a location . When someone submits a proposal for an art project is it automatically accepted or how does that work . I mean, it seems like we have had really good luck with pier 14 and the installations there and barrie plaza. We have seven and a half miles of waterfront that can use art throughout so im just wondering, what type of program do we have and how do we encourage people to participate. We have a very partial program in place right now. [laughter] we have one resolution with pier 27 plaza and the space in front of the ferry building, pier 14, brandon street war of, crane co park, and i cant remember if theres one more or not. I do have any notes here. It would be the last one thank you. The commission has acted in that way and it supports large scale art and automatically it provides the executive director of the opportunity to wave the license fee. We have that and thats the one piece we have in place. Another is when our projects, our construction projects, public projects involve city money were part of the 2 for art programs. And weve seen that through the sculpture down at the corner of third and cargo way. I believe some of the money went into bay view rise and theres something planned for the park and also you can see it at cruise terminal plaza. We have that. No, we do not have a set of art guidelines yet but it is in our work program and we are looking at it. Looking at how art may contribute to the public realm in a larger way. We hope to bring that to you. Certainly within the next year hopefully sooner than that. As part of that, we would expand upon the Selection Process. Part of it, one of the issues now is we dont have a budget for bringing in public art. So, we are unless we have such a budget and im not suggesting we establish one, because its not my place. But to require a Selection Process when we dont have that i think would be something that this commission would want to talk about in the future. Well, if were accepting public or not necessarily having to pay for it it should still be a process. And i do think that the Art Commission approves lots of projects and if they knew we were looking for new projects along the waterfront, they may direct more projects our way. Im really looking forward to some kind of concrete understanding of our port by our temporary art, permanent art. Its a good idea. We will develop such and return to you with that. Thank you. New business. Thank you, dan. Thank you very much. Thank you. Item 9a. A proposed issuance supported of San Francisco series 1b refunding Revenue Bonds and not to exceed 22 million to refund the Outstanding Balance on the Port Commissions 2010 revenue funds interest costs savings to 2014 the remaining life of the port Revenue Bonds. Before you proceed, i have a disclosure to make and i will recuse myself from the presentation and voting on this in the proposal, u. S. Bank core is the trustee from the bonds and i am an independent director of u. S. Bank core so to inflict conflict of interest i will recuse myself. Thank you. Good afternoon, commissioners, sorry im just experiencing some technical difficulties with my slides. Here we go. Good evening, commissioners. Im katie and im the ports chief Financial Officer and i am here this evening with an informational item regarding a proposed refunding of the ports 2010 Revenue Bonds. Im joined here this evening by a variety of members of our finance Team Including bob gamble and Christine Choi from pfm, pete are wong from back strum ma carlie and prince lynch our bond council associated with jones hall and disclosure council russ trice and one of our under writers with default and i believe that russ is going to speak to you when i am done about the commissions duties to disclose in as full and accurate away as possible. Before we issue this new gap. So, staff is proposing to refinance nearly 30 million in outstanding Revenue Bonds. We are requesting that the commission give authority to issue these refunding bonds in an amount not to exceed 27 million but staff expects to issue 23 and a half Million Dollars of bonds. We estimate that this refunding will create 13 million in savings over the life of the debt with a net present value of almost 8 million and the majority dates of this debt that will remain the same. The goal is stability by creating savings that may be applied to Capital Projects or other strategic needs of the organization and also by reducing the ports annual debt service which improves our over all financial stability. In Revenue Bonds to support construction of the cruise ship terminal and to perform Capital Improvements on several piers. The 2010 bonds included two different series a taxable and a tax exempt reflecting the mix of public and private capital improvemented by the bonds. The taxable series matures in 2030 and the tax exempt series matures in 2040. When the bonds were issued, there was an option to be redeed redeemed at the Port Commission sole discretion as of march the first, 2020. Currently, the port is paying 2. 8 million annually in debt service on the 2010 bonds which will then drop to 1. 9 million annually in 2031. The ports current outstanding debt is 87. 9 million. This is a combination of Revenue Bonds, certificates of participation that were issued by the city on the ports behalf and for which we are responsible to pay the debt service. And two loans from the California Division of boating and waterways. One, for improvements to height street harbor and then loans that the Redevelopment Agency incurred to Fund Construction of South Beach Harbor in the 1980s which occurred this past april. The Port Commission approved a debt policy in 2016 with the goal of ensuring prude Debt Management that will achieve the highest possible debt ratings with the lowest cost and the lowest possible risk. This policy establishes guidelines for refunding of existing debt including that the refinancing results in at least 3 of net present value savings and that the ports Financial Advisers believe it will not see greater savings by deferring the funding. Port staff and rfas currently project this refunding will achieve npv savings of 26 of the principle amount of the 2010 bond so significantly higher than the 3 and our Financial Advisors advice that waiting to refinance will not achieve significant higher savings. 460,000 annually until the bonds are repaid. This dip in debt service occurs when the taxable bonds have been repaid. And as i mentioned, we believe that over the remaining life of the debt, we will save 13 million as a result of the refinancing. Just to give you the general bar am ter of the wore asking the commissioam ter. We only need to issue 23 and a half Million Dollars. We expect that the final Interest Rate will not exceed 6 and should in fact be much lower. The Maturity Date or the debt will remain the same. We will not proceed with the sale if we cannot achieve at least 10 savings. We have been advised that the market is not going to require us to fund a Debt Service Reserve so were not planning to do something. Port staff estimates that we will generate 23 and a half Million Dollars in bond proceeds which we will combine the cost issuance. To be conservative, the port and our faas have created two potential scenarios both of which will result in substantial inter savings. The first scenario assumes that the port will issue bonds in the amount of 23 and a half Million Dollars at a coupon rate of 4. 27 . This would result in a minimum debt coverage ratio of 7. 72 for the revenue bond and and the loans from cal boating. The second scenario assumes that bonds would be sold at an Interest Rate 75 basis points higher than the current market and that the port will in fact be required to fund a Debt Service Reserve. When we return to the commission for approval, we will be asking you to approve several documents including a resolution authorizing the sale, the third supplement to then denture of trust, a bond purchase agreement, the preliminary official statement, the continuing disclosure certificate as well as he is croas well as escroagreements. We have steps before we can pay the 2010 bond. In october of on october 22nd, we expect to return to the Port Commission for approval of the refunding. We hope to introduce the bond documents and appropriation ordinance to the board of supervisors before the end of october. We will meet with Rating Agency and receive a rating for the credit in december. Then, we will receive board of supervisors approval in december and in january we will price the debt pricing on the bonds with the sale of the bonds and closing in february of 2020 with repayment of all of the outstanding 2010 bonds by march 1st, 2020. That concludes my presentation. I will invite russ to talk about my disclosure. Good evening, members of the commission, i will skip the whity joke given the hour. Proceed to my topic. They asked to speak just a little bit about the disclosure responsibilities in connection with the public financing. So, these are securities, bonds are securities. The Municipal Market is very deep, its multi trillion dollar market. What you are doing is consistent with many other agencies across the state. Issuing public debt. In each case of the public offering, theres a disclose your document. Its a big thick one that will appear before you before final approval in october. In preparing that document, your staff has been mindful of a few basic Securities Law requirements which you will want to keep in mind as well. The first and most important is and at the federal rule theres a touch stone for disclosure that there be month material misstatement and after the Orange County bankruptcy made clear the boards commission, city council, are responsible for the offering document. While you have competent, knowledgeable and trained staff and while they have hired outside professionals to assist at the end of the day, security and Exchange Commission will look to you if theres a problem with the documents. Let me tell but the protection that exist for the port and the city of San Francisco as a large issuer and these are good. You have a knowledgeable staff and a good process. Theres been multiple meetings to review the disclosure and its been scrubbed by your staff. Theyre mindful of the Securities Law and theyre mindful of the material risks. They have procedures. They have centralized responsibilities. Also, theyve hired disclosure council, thats us. To introduce myself my name is russ tries and we regularly work to the city with closure and and they have a track record and for investors on each of your outstanding issues. The Security Exchange commission considering those things carefully in an enforcement action and those are all very helpful facts . Disclosure speaks as of its date. You will approve it and sell your refunding bonds and thats the date of your disclosure. Generally speaking, you dont have a duty to update it as developments come along. There are a few exceptions. You have annual disclosure to the investing Community Knows what is going on at the port. Sometimes there may be voluntary disclosure for very material issues that arrived and certainly if there was a major, there are routine Investor Relations opportunities for this closure of conference and other things but generally speaking, your disclosure for each official statement speaks as of its date. And so you dont need to lose sleep a year or two from now or 10 years on a 30year bond issue that the official statement may create risk. There are penalties for inaccurate or insufficient disclosure. I would be remised by not mentioning them and highly unlikely event that you are investigated. There are fines for municipalities and for individuals and the fcc can issue a cease and desist orders. There can be criminal prosecution and investor lawsuits. Why bring this to your attention now . Maybe you havent experienced this on other bond issues over the years. Since 2010, when you did the bond issue that you are refunding, there were a number of Enforcement Actions and the first time really in the municipal area so in the corporate area, enforcement is not surprising corporations can go bankrupt and and they have enjoyed a run of not heavy enforcement and it has shifted. In 2013, there was the first sanction against municipal entity not in the state for in accuracies in disclose your and financial penalty. In 2014, there was individual liability for in sufficient disclosure again in another state. The fines were relatively small. 20,000 in the case of the municipal entity and 10,000 in the case of the individuals. Since that time, the scc has issued orders and continued to issue fines and most recently in montabello and Southern California and for a School District and we can expect them to continue to roll out enforcement through cease an ced desist orders and penalties. They do not regulate you directly. At the regulate under writers so theyre very careful. They can, in certain circumstances, particularly for fraud, regulate municipalities correctly and they can do that without showing any financial harm unlike an investors suit. I want to emphasize the good process aspect of staff review and higherin hiring a confidentd your review ex and your document that you are most familiar with. Budget revenues and expenses. And those kinds of things. Any risks that document may not contain that you are aware of. We think weve covered all the material risk but if theres Something Else to be included in we want to make sure your disclosure is sufficient and with that i will be happy to take any questions. Thank you. Is there any Public Comment on this item . Seeing none. Public comment is closed. I support the item. Any refinance is good. The parameters of what staff is recommending is theres not an n ex documents should reflect a figure that would have more if its a typo its a typo. If its intentional, why would we refinance and give parameters for something more than what were paying. We absolutely do not expect to pay 6 . We just wanted to give ourselves an outside parameter that would allow for Market Conditions to change. If i may suggest, in market condition changes take it to six we should put a cap of 10 less than our 5. 7 and then were going to end an even point of not losing money. If we got in a game and it reached six, theres no advantage for us to take that risk. We have to add some clarifications. Im with psf. In terms of your question, not too exceed 6 Interest Rate is a coupon rate on the actual court borrowing rate we expect to be closer to 3 and the actual, i believe the resolution that has a little bit more information has that not to exceed rate at 4 . So the 6 Interest Rate is the coupon rate on the bond. They may be sold at a premium to investors but the actual yield that the court wont be paying is lower than that. Great. Thank you. Sure. Commissioner gillman. Thank you for this. I have no questions. Vice president adam. Great presentation. No questions. Thank you so much. This was great and it will be great to recoup 13 million. [laughter] yeah. For art. [laughter] thank you. Thank you. Item 11 no business. I have several items. One will be back to with some recommendations on a portwide arts program for your review and feedback. We also will be working with president brandon to make sure that the lbe and Workforce Development reporting for mission rock is clear, concise, timely and transparent. So we will be getting that report back in a clear ask concise way and we will be scheduling an item to come back to the commission to talk about the findings from the pilot on the lightweight concrete cellular material, the lcc after that pilot occurs from mission rock. You can hear what the puc has found and how theyre moving forward or not moving forward on the permit. Thank you. Any other new business . Were going to get an update on what is going on with pier 32 and id like to know about this building on the Renice Priebus thapier thats beensitting ther. When you say pier 20 and 32 on the rfp coming out. On the rfp . Do we have an update on that. That is scheduled. Its coming for you november 12th. Well be here on pier 30, 32 and seawall at 3 at 30 to at 3 30 tp to go out and were working on the community on what kinds of things they like to see and working on our trust values for that rsp and on the restaurant sitting vacant lots come forward. To know which one you are referring to. Thank you. I have two things. I would like to have if possible an open session update of what is happening with our lease negotiations with the Photography Museum or the photo nonprofit. Also, im just hoping you can get schedule before the end of year. Commissioner made her request to bring our rules of order forward, she also made a request which i was a little unclear of the content but having the city town come back and talk about ethics and the value of the ports and im hoping we can do that. Hopefully we can have an update on pier 70 and how its going and the brockville take over has effected anything if it has and its the status on the pier 70 project. [please stand by] i dont have the right to reject the older leases. So its a variety. I could write a memo to clarify. So ill do that. One more thing, an update on the butterfly space. I think we approved that lease a while ago. I walk by all the time and not seeing activity. Weve been trying to get them to you, trying to get them in front of you in october, but absolutely, an update. Any other news business. Motion to adjourn . Second. All in favor, adjourn
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